Sport Sponsorship started with athletes in the 60’s – these athletes were paid sums of money to endorse a product for a specific company. In golf, athletes like Arnold Palmer and Jack Nicklaus endorsed high end luxury goods like watches and cars. Tennis players were paid to wear apparel from brands like Nike and Adidas while they competed on court. These companies saw the marketing value athletes would bring to help them sell their products to a global Broker Sponsorship. These athletes were icons and heroes to so many people and the psychology of human behavior tells us that we want the things our icons and heroes have. Hence these athletes became walking billboards for companies to promote their products to a global market.
Sports Agencies like Octagon and IMG started presenting these athletes interests and became the ‘middle man’ in brokering sponsorship deals between their athletes and Fortune 500 companies. Television played a huge part in showcasing these athletes playing their respective sport while wearing and using a company’s product. Commercial time was sold to companies to advertise and leverage their association with these athletes and drive consumers to buy their products.
Since the days of the inception of the Sports Marketing Industry in the 60’s, a lot has changed. Sport Sponsorship has become a multi-billion dollar business. Not only are athletes sponsored, but also events, teams, stadiums etc. Companies pay multi-million dollar amounts to have their name tied to a certain athlete, team, event or stadium.
In 1997 when Tiger Woods turned pro, he signed a $40m, 5 year deal with Nike, which at the time was the largest deal in golf. In 2013 Rory McIlroy joined Nike for a reported $250m, 10 year deal. This $250m would be subject to certain bonuses clauses, however it shows how valuable these athletes have become to companies like Nike and how important they are to their marketing strategy.
These days a sponsorship deal has become very technical. The company pays X in return certain rights that are associated to the sponsorship. Through various matrix’s, Sports Marketing Companies are able to show the Return on Investment (ROI) for most sponsorship. By using these matrix’s they’ll able to formulate a dollar amount that companies should pay for the sponsorship. These figures are usually a starting point for negotiations between these Sports Marketing Companies and Brands to start and ultimately come to an agreement that works for both parties.
When you look down the list of the leading money makers among athletes, you’ll see the likes of Tiger Woods, LeBron James, Roger Federer and David Beckham – all leading figures that transcend their sport. They’re all icons that people look up to and have huge marketing appeal; hence they’re paid large sums for their sponsorship. In fact 85 -90% of Tiger’s over a Billion Dollars in net worth has come from sponsorship and the remainder from tournament winnings. I think these numbers just typify the kind of importance companies place on sponsorship of the right athletes or propertyA popular question we always get is “How can I get sponsored for the Series 7 Test?”
If you are looking to break into the securities business as a broker, you will notice many firms require the Series 7 license. What is the problem for most people? They don’t have the license and it cannot be taken until you are employed or affiliated with a firm who will do it for you. There is the problem.