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Is sport really missing out on £14billion?

Updated: Feb 22

That Two Circles report certainly landed PR-wise, to the extent it made it on to Steve Wright in the Afternoon on Radio 2 as a factoid. HT Matt Cutler, the agency's head of comms for that one. (Have a listen to the new podcast here)

What happened

Global brand spend on sports sponsorship will grow four per cent this year to £35 billion (US$46 billion), according to a report by Two Circles. But the report made the controversial claim that sports properties are missing out on an extra £14 billion due to unsold inventory, unreported engagement and outdated rights packaging.

We ask the report’s author Phil Stephan, Director of Two Circles, where he got his numbers from and what he thinks rights holders can do to plug the gap. It’s a conversation that takes in many of the current dilemmas facing sports decision makers, from the challenges of digital marketing, the role of creative in sponsorship activation and whether content marketing is working for brands. The full report gives more detail on the breakdowns.

Sport Sponsorship Spend Graphs

Why do we care?

Below the headline number, the report is asking some searching questions of rights holders, and by extension the agencies and third party vendors which supply them. 

This snippet below feels under reported. When was the last time that sponsorship spend was lower than overall brand spend? The story of the last decade or more has been that sponsorship spend has outperformed other marketing. Other questions come from this, mainly why? Is it that the line between sponsorship and digital marketing is so thin that brands are wondering why they need to invest in rights when they can create their own thing around their own themes, and just buy in the IP. 

Sport Sponsorship

Where’s it going?

The solution to most agency research is to blame the rights holders for being ‘analogue in a digital age’, which is an easy hit that puts the pressure on governing bodies, teams and leagues to spend more money on agencies and tech vendors. There’s a bit of that in the Two Circles work too, but I suggest listening to the podcast for Phil Stephan’s response to that question, which is far more nuanced than can be put across in a report, the aim of which is to grab a headline or two.

Just saying rights holders must invest in digital is not particularly helpful. Particularly as it comes with a big bill, and a need to change from a B2B business to a D2C one. That’s not just about tech and attribution of money, it’s a cultural divide that most aren’t up to achieving anytime soon. As underlined below, the answer is rarely simple.

Sport media not creating value for brands

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