Athletic Sponsorships Are Poised to Explode

Only a small portion of Lipscomb University’s athletic department budget comes from corporate sponsorships. But the expenses of joining Division I for this private Nashville, TN, institution were so much greater than its previous division, the NAIA, said director of corporate sponsorships Paul Nance, every avenue is worth exploring — and the amount is increasing every year.

Colleagues say this attitude is sound, as corporate sponsorships show promise of becoming the standard operating procedure in the near future. “I think it has replaced straight-up advertising in many ways,“ said Jeff Cieply, director of Sales at Indiana University (IU), where corporate sponsorships comprise five percent of the Athletic Department’s budget. “Television shows like American Idol aren’t just about buying spots — they’re marketing platforms for AT&T, Coca-Cola, and other corporate sponsors. Integrated marketing is what sponsors are looking for — the biggest return on investment they can find and a way to build and communicate their message to a specific audience on different levels.

“We’re just going to see more and more of it,” he added.

Indeed, while newbies like Lipscomb have attracted local businesses like Baptist Sports Medicine and Hampton Inn Brentwood, the University of Arizona in Tucson has graduated to partnerships with Pepsi, Wells Fargo, and Xerox.

“As a partner, the Athletics Department analyzes our objectives and works closely with us to develop integrated programs that meet our marketing and community outreach goals,” Larry Finuf, president of Wells Fargo’s Greater Arizona region, has said in his testimonials for the relationship.

Let’s Play

When advertising dollars are the stakes, it takes more than an open palm to make a deal. Nance brings Allen Arena to the table, a multipurpose venue that holds more than 5,000 spectators for basketball and volleyball in its seats. It is also adaptable as a banquet facility for up to 500, a concert hall, or a tradeshow floor. Corporate sponsors get their name in front of all these audiences. “Even our weekly assembly here provides sponsors exposure to students who don’t normally come to athletic events,” he noted.

“An attractive space means everything from the game experience standpoint, as well,” Nance added. His experience in packages inside Allen Arena range from putting a corporate name on a specific event — such as the NCAA’s Pack the House program for women’s basketball — or a banner, to getting the audience involved in interactive games with prizes at halftime. After all, athletic sponsorships aren’t synonymous with charity.

“You do it because it’s a completely natural, smart partnership. I spoke to an alumnus last week who just wants to help us out. I said, ‘I am thrilled to take your money this year, but my goal is that next year this is not a ‘heart’ decision but a ‘wallet’ one,’” Nance said. “I want him to say this was the smartest business decision he ever made, thanks to the exposure from this partnership.”

Indiana University is finding success when it adds multimedia to a sponsorship: Website links, Twitter announcements, YouTube videos, and texting programs. For instance, at one football game, a sponsor ran a texting program asking fans to vote on one of three songs the band could play at the next break. “It’s that immediate gratification, people having fun,” Cieply said, in pointing out the strengths.

The Structure

Indiana University works with a sports marketing agency, Learfield Sports, which currently handles the arranging of corporate sponsorship for more than 50 universities around the country, including six of the 11 schools in the Big Ten, as well as the Big Ten Conference association itself. This bulk means they can package and sell IU’s teams nationally and regionally — a surefire way to increase the dollar flow.
But the relationship between an individual athletic department and a third-party agency must be tight, said Cieply, lest smaller advertisers get lost between the cracks, steered to sports where their message is muted. “If you’re focusing on trying to have fun as opposed to just running advertising spots, there’s just enough distance between the advertiser and Athletic Department to cause a problem,” he explained. When the sponsorships are handled completely in house, the university retains 100 percent control of the message.

And that’s a very comfortable position for Nance, who said working with corporate partners brings out the individual talents on his staff. “I’ve met some really nice people, and that sounds so simplistic,” he said. But those friendships strengthen the benefits for both sides, as one of Lipscomb’s hotel partners is discovering. Sports was the front door through which to reach a traveling audience of parents and alumni, but their reps’ relationship with Nance have led to shared business with the Admissions Department as well, when prospective students make their campus visits.

The same dynamics are playing out at Indiana University’s Bloomington campus. Cieply makes sure the business owners and employees know he considers them part of the school’s sports family, and in turn these involved Hoosiers become a source of student enrollment and future alumni gifts.

The Risks

Corporate sponsorship has its risks, however. Obviously, schools can say no outright to inappropriate sponsorships from alcohol brands or pharmaceuticals, for instance. But any time a third party experiences a public relations crisis — think Luby’s Cafeteria when a serial killer drove through the window at a Texas location and began shooting diners — the university’s linked name could also take a hit.

“You weigh the risk and rewards. That would be an unusual circumstance, in my opinion,” Cieply said. Sponsors attached to political causes might calculate differently.

But for the most part, Nance sticks to pursuing enterprises that fit in with campus life, such as grocers, coffee shops, and furniture stores. “If I put someone’s sponsorship coupon on the back of my season tickets, the business can immediately see the results when the coupons roll in right away,” he noted.
And that’s a winning proposition no matter how the arena scoreboard turns out.