Tuesday, 3 July 2012

The Potential Pitfalls of Title Sponsorship

So in the week that Bob Diamond steps down as Chief Executive of Barclays Bank amidst talk of Parliamentary enquiries into Libor rate fixing, rumours abound that Barclays is to extend its title sponsorship of the FA Premier League. Busy week over in Canary Wharf but as Diamond quit to avoid "corporate contagion", what is the impact on the righstholder?

It's an interesting question and in the world of sponsorship, it is more usually applied the other way around: how is the sponsor protected in the event of undesirable behaviour on the part of the rights holder? Title sponsorship has become a regular feature of the sponsorship industry but are rights holders missing a trick in aligning themselves closely with a single corporate entity?

There are many reasons why a rights holder might want to consider structuring its commercial programme to accommodate a title sponsor. It's clean, it's easier to manage and in many cases trying to find one big sponsor can take as much time and cost less than trying to find three or four smaller ones. 

However it can be a double-edged sword. Agreeing to sign over the title rights to your product might not be the best long-term solution. The sponsorship can become bigger than your product, you risk ceding control over how your product is presented and ultimately you can lose equity in your own brand. You might also become overly dependent on one revenue stream, exacerbated still further when your title sponsor decides to move on as you may well find it harder to find a new partner who is willing to deal with the hangover of the previous sponsor's legacy.

I'm not necessarily arguing that the FAPL is a weaker product for Barclays' involvement,  as the bank has supported the partnership with some good initiatives and through that, quite easily banished from the memory Carling's title sponsorship. However I would argue that the FAPL's brand - already less well known than several of its constituent clubs - is probably weaker for the involvement of a title sponsor. Travel to Asia and try to find anyone who refers to "the FAPL".

There will no doubt be many people - for whatever reason - questioning whether the FAPL is tainted by the Barclays scandal. Experience of previous studies tells me that there will be limited knock-on effect onto the FAPL brand - there will be some who see the wealthy elite as being in league with each other but for the most part I think people are able to separate the two entities. 

However, title sponsorship is not as straight-forward an option as it might seem and rights holders should think carefully before putting all of their eggs into one basket.

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