Sponsorship 101 : Sponsorship rights

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#2  in our Sponsorship 101 series aims to give a broad base understanding of sponsorship rights.

When you think about the enormous range of rights-holders out there, from airports to zoos, it’s easy enough to imagine the enormous range of sponsorship rights which rights-holders can offer in their sponsorship package.

We’ve worked with hundreds of rightsholders – each operating in a unique environment and offering unique benefits – ranging from appearances by Pudsey bear (and Blush) for Children in Need to trips into space for Virgin Galactic. There’s no end to the variety of rights that a rightsholder has to offer. But it is possible to cluster these rights into familiar groups, so if you’re a rightsholder looking to package a sponsorship or a brand  wanting to look creatively at options beyond the package, this might be helpful.

The foundation : right of association

As we explored in our first #101 post, the core purpose of sponsorship is to build association – and so the core rights are rights of association, that is: the right to use the name, logo and imagery of the rights-holder, without which it’s impossible to communicate and promote look association.

These rights are often referred to as IP, intellectual property, because they are the intrinsic property of the rightsholder.

Imagery is straightforward for an airport, but often it has to be qualified in order to protect individual IP – to prevent sponsors from suggesting the endorsement by any specific person. Teams may for example specify that a minimum of three or four of players have to be used together in promotional imagery, and that the sponsor cannot always use these same players, to make clear that the sponsorship is with the team. Leagues will generally apply similar restrictions to teams.

Of course, these aren’t cast-iron rules and rightsholders may flex as appropriate. If the rights situation and relationships allow, then the use of one player or the manager as an ambassador provides tangible extra value. Sponsors of Wrexham FC won’t have Ryan Reynolds bundled in the contract, but they may factor in how his goodwill may support business objectives.

Included under this umbrella is also the official designation and the logo lockdown – the agreed juxtaposition of the two logos, sponsor and rightsholder.

The Official Designation is nothing more than the agreed term to describe the sponsor’s relationship with the sponsored entity. Normally, this identifies the business category of the sponsor and the status of the partnership. So, Official Telecoms Partner, for example. Or Official Accommodation Supplier. 

There’s room for some creativity here, so Official 5G Partner could be used instead of or as well as Telecoms to place emphasis on 5G. Designations can be used to broaden apparent scope, so Professional Services may be the communications focus – even though the rightsholder only requires more traditional accounting support.

Right to category exclusivity

Category exclusively is also foundational. It means that the rightsholder will only have one sponsor from that business category. This is fundamental as much sponsorship activity – building narratives around service provision, offering tickets or unique experiences – loses much of its lustre if your competitor can say and do the same. The rightsholder suffers as well as it disincentivises sponsors from activation.

Tokyo 2020 was a prime example : banks, airlines, insurance companies, gas supply and other categories were doubled up. We heard directly from the sponsorship teams the negative impact that had on their ability to release activation budget. 

Right to exposure

A right closely connected to association is the right to exposure : brand integration, messaging and content of various sorts.

This begins at the basic level of incorporating logos into the media of the rightsholder and gives rise to long schedules of seemingly trivial rights relating to the precise location, size or duration of the brand exposure and occasionally, a minimum guarantee of brand visibility; and also the nature of the communication eg brand message v sales.

Everything is media of course and so physical advertising around the field of play, on kit, on athletes themselves, with high visibility areas – such as shirt and jersey branding, programmes, interview patch, behind the goal; digital and virtual inventory such as digital perimeter exposure, in stadia screens, website prominence or on-screen branding can all be present.

All of the rights-holder’s owned media, in other words. For major events, especially high level sport, this can also take the form of TV airtime (especially the US model where advertising is often packaged within the sponsorship).

This can also extend to media that the rights-holder can influence – such broadcast sponsorship, where the rights-holder may hold the first right of refusal or first options.

Exposure of course goes way beyond logo exposure to branded content, sales messaging, anything which allows the sponsor to promote its products or brand.

If we are categorising rights, then naming rights are simply an extreme form of the right of exposure. The most notorious examples of naming rights are for sports stadia, notorious simply for the huge sums of money involved. The minimum term of stadia naming rights has slowly crept up toward the 20 year mark and now produces annual multiples of scaling up to the $700 million commitment by crypto.com for the Staples Centre.

Naming rights appear less exorbitantly in the title sponsorship of leagues, races, events and broadcast, offering the sponsor branding incorporation in the name of the sponsored entity, and guaranteeing significantly more exposure.

Right to access

In other words, what access can this sponsorship open up for me?

Let’s start with event access.

Tickets are numerically the most common form of access – their value lying in driving promotions or as the Americans prefer to say, sweepstakes. Tickets can constitute a major component of contract value as they have a direct commercial value.

Hospitality however is the best known example and the bedrock of most sponsorship programmes : the ability to invite guests to enjoy the experience. Again, this subject has the potential to go into endless detail as hospitality space, like media inventory, is a limited resource : usually, there are only so many seats. So number of places, food and beverage quality, location (eg proximity to main venue) etc can end up occupying many contract pages.Large capacity events such as the Olympics or FIFA World Cup will specify the right to buy additional hospitality. 

Hospitality is typically applied B2B to host the senior stakeholders of major commercial partners – but can also represent the highest tier of consumer ticket promotions – whereby consumers may in tickets plus plus – accommodation, travel etc. 

Privileged access is the foundation for the unique experiences which rightsholders will try to offer, allowing guests of the sponsor access to experiences and places which are not otherwise accessible. These can include guided venue tours, private showings, meet and greets, talks and displays by the rightsholder’s team, behind-the-scenes access during the sponsored event, team mascots and much more. Atos uses its partnership with the IOC to offer private tours of the Media Centre at each Games, offering a staggering insight into the technological complexity required to automate the communication of results – being the highest profile content – during the Games.

Next, let’s take a look at access to the membership or fanbase.

Properly qualified access to a fanbase is becoming ever more important and some practitioners would argue it belongs at the top of any list of rights – because it offers direct conduit to a warm consumer base. So the quality of the database is of course paramount : how clean is it, what level of detail does it contain, what historical consumption can it show, does it come with any broader demographic indexing and what level of contact permissions have the members confirmed?

Contractually, access will be measured and allocated with almost as much definition as logo exposure and usually remain subject to rightsholder approval – ensuring tone of voice, frequency of contact and the nature of the content are appropriate and not going to alienate a fanbase

Third in this list is access to commercial opportunity.

Major rightsholders and their commercial networks can represent a direct commercial opportunity for some businesses and so the ability to build relationships inside the rightsholder organisation can have value. Similarly, access to the sponsor network can also offer significant commercial value and forward-thinking rightsholders encourage and structure networking between sponsors, knowing that these connections in themselves offer high level business opportunities.

Sometimes the political nature of the host e.g. a metropolitan or regional government, make sponsorships attractive as they enable relationship building. In other instances, especially for major events, sponsorship can open up access to traditionally protected supply chains. GE, notably used its Olympic partnership to embed itself in the Chinese economy. Visa used its access to the city of Tokyo to lobby for Visa to be accepted as payment provider for the Tokyo Metro. Unsuccessfully.

The golden decade, 2008 to 2018 of the Olympics saw the games visit Beijing, Sochi, London, somewhere else, Rio de Janeiro, South Korea, with Tokyo just around the corner and the lineup of these markets presented huge commercial value to sponsors. In some cases, this was directly translated into supply contracts, in other cases, it paved the way – conferring on brands a halo of approval amounting to a soft licence to operate.

There’s a lot of talk these days about sportwashing and soft power, the term generally used to describe the application of sponsorship and major events hosting to improving the reputation of the sponsor or host. But soft benefits have always been an intrinsic element of sponsorship, from the earliest days as sponsorship’s value is to improve the perception of the sponsor.

For brands, soft benefits have an unsung importance in sponsorship and one which is difficult to quantify or specify.

Right to supply

The right to supply product gives the sponsor the right to supply the rightsholder with their products. Usually, this right is limited to the scope of the sponsorship, but rights-holders have a long history of broadening out this relationship organisationally. Banking is a prime contender and an obvious example. This is not a glamorous right but commercially it can be critical and the supply of services, in the case of Deloitte’s sponsorship of London 2012, came close to offsetting the licence fee.

It’s also important for storytelling and providing a commercial use case for B2B businesses – their use by the rightsholder offers a powerful demonstration of their quality and relevance as a product.  

As with most right, beneath the headline, there’s a world of detail, eg

  • is that exclusive or non-exclusive?
  • at what cost?
  • what is the scope : just within the organisation or across event supply?

And the biggie : how are these rights protected in the context of a multi-stakeholder mega event?

Access to promotional assets

Promotional assets, very straightforwardly, refer to the likes of shirts caps mugs pens and these days NFT’s – any items which have a value a fanbase by virtue of the IP they carry. These can range from truly mass market tut to rare collectors items with significant market value and provide sponsors with  prizes, essentially, to support promotions.

Sole and exclusives

Sometimes included in sponsorship packages is the right to activate the sponsorship. Of course, for most rightsholders, there’s nothing they want more – but larger rightsholders again will often control and monitor the level and type of activation, to ensure some sponsors don’t drown out the rest and to ensure no duplication. The phrase Sole and Exclusive comes from FIFA. They aren’t trying to limit activation, but limit access to key FIFA assets such as McDonald’s player escorts.

Volunteering rights

Volunteering has long been a big thing in NGO partnerships, recognised by brands a good boy good boy an opportunity to give mini for experiences to their employees, as well as occasionally offering opportunities for skills development.

Volunteering looks slightly different in a sponsorship context. Opportunities for skills development are more likely to take the shape of the VIK services, such as the role of CFO for Tokyo 2020 which was occupied by an EY employee for seven years.

Volunteering opportunities in sponsorship generally take the shape of further unique experiences and benefits for employees. Originally Sydney 2000 and latterly London 2012 raise the bar and profile for avolunteers at major events, to the extent that now the opportunity for an employee to volunteer at a sponsored event could be a coveted opportunity.

The right to ambush protection

It’s funny in many respects, a right which acknowledges your rights may be usurped by your competitors.

But for major rights-holders the service of ambush protection is both essential and a helpful support. Rights protection largely consists of proactive monitoring of any infringements of the rights holders IP by brands wishing to ambush the sponsorship; and rapid response team on call to engage the legal teams of ambitious with primarily cease-and-desist letters. Given that most ambush is of the pop-up for variety, looking to generate a moment of fame in the halo of an event, and the focus of rights protection is mainly to minimise the scale of infringements.

In conclusion

Sponsorship rights aim to place the organisational assets of the rightsholder at the service of the sponsor in a way which is scalable – to other sponsors, and sustainable.

Hopefully this overview will map out the landscape of sponsorship rights – and offer a foundation for thinking through their value as both buyer and seller.