The 5th edition of Frontier, MKTG’s sport, entertainment and sponsorship monitor is due out in July, and this year is definitely not a normal year. Whilst there is good news in the number of global responses, this must be played out against a backdrop of uncertainty and unparalleled disruption in the sport and entertainment industry.
Ahead of publishing the report, some interesting statistical nuances have cropped up. Now, these are by no means ground-breaking and will no doubt support what anyone would anecdotally tell you, but the evidence to back it up is quite revealing for those of a number crunching mindset.
Whist we considered postponing the survey (originally opened on 11th March and closed for response on 8th May) due to the pandemic, we decided to use it as opportunity to monitor industry sentiment and shift during the fallout.
In early March (so pre-lockdown), many countries expected the industry’s market value to align with that of 2019. However, once the reality of the impact of Coronavirus became more apparent, a rapid decrease became clear. So far, so obvious… What is interesting though, and something I’m sure everyone in the industry has been feeling, is the question of “what happens next?”.
While we will come on to suggest the broader direction of travel for the industry using future findings from Frontier, one trend worth noting is the rapid shift in brand sentiment towards whether they should pay for all their rights or just those that are used. This is perhaps unsurprising given the hiatus of live events, but does this point to a need for a more agile sponsorship system?
As the pandemic continued, Frontier highlighted the clear differences of opinion between brands and rights holders on who should pay for non-delivered assets. Pre-pandemic, there was an alignment that 20-30% felt that brands should not have to pay for non-delivered assets, but as brands tried to balance the books, their need to be reimbursed for non-delivery increased with rights holders seemingly not willing to consider it.
Fast forward two months and 79% of brands now say that fixed sponsorship is dead, compared to 66% of rights holders. This may signal a shift in how rights and partnerships are constructed in the long run, but in the short term it will lead to multiple commercial and legal conversations between “partners” to bridge the divide in perception as we hopefully exit the restrictive phase of the pandemic.
These different times have brought to the fore the importance of knowing the value of your assets, be that tangible or intangible by association. It will be interesting to see if those rights holders who price solely on media value are willing to “give back” non-delivered exposure and whether brands undertake their own valuations and identify each asset’s value in their contracts. The figures suggest this has been an eye opener and the traditional list of assets and traditional rights package may be a thing of the past.
The full frontier report will be released in July.
By Sandra Greer, Head of Insight