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Benefits and Risks of Sport Sponsorship

What are the benefits and risks for an organization when entering into the following types of sport sponsorship agreements: Governing-body sponsorships, team sponsorships, athlete sponsorships, facility sponsorship, and event sponsorship?

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The benefits of entering into a sponsorship with a governing body include extended media coverage (potentially both national and local), fan association strength, promotional opportunities and exposure. Promotional opportunities may include promotional licensing, complementary advertising and signage opportunities. However, there may be risks involved, including cost effectiveness when weighing the payback versus investment. In addition, a link with a governing body may disenfranchise consumers who do not feel as if they are a part of the demographic profile that is served through the governing body. It is important to have a good demographic fit. In addition, media and promotional coverage may involve a greater audience than the current market, which can dilute marketing dollar power. It can also set a company up for ambush marketing, which can result in negative advertising campaigns.

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Solution Summary

This solution discusses the pros and cons of entering into governing body sponsorships, team sponsorships, athlete sponsorships, facility sponsorships and event sponsorships for sports.