Global sports sponsorship spending set to reach US$65 billion this year

A report from sports data agency, Two Circles, claims global brand spend on sports sponsorships will grow to US$65 billion in 2019.

Despite this, the report also claims sports rights-holders will miss out on US$26 billion in unrealised revenue throughout the year due to unsold inventory, unreported engagement and outdated asset-packaging.

Two Circles Chief Executive, Gareth Balch, explained that despite sports sponsorship spend growing by 4% on average since 2014, rights-holders have under-exploited their sponsorship businesses by about US$22 billion a year on average during this time.

UK-based Balch explained “most rights-holders continue to package and sell sponsorship just as they did 20 years ago, offering brand exposure through linear broadcast coverage as the main benefit for brands.

“Globally, we’re spending more time-consuming entertainment on digital platforms; we consistently see a disparity between what brands need to reach an audience effectively and quantifiably, and what digital assets rights-holder are able to offer in their sponsorship packages.”

Two Circles claim more rights-holders are starting to package digital assets into sponsorship propositions, predicting that spend on sponsorship will increase by 6% on average per year between 2020 and 2024.

Anticipating that global spend on sports sponsorships will reach over US$89 billion by the end of 2024, Balch added “rights-holders are adapting to this new world and we predict a sports sponsorship correction, by embracing the power of data and digital to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses.

“This will drive greater spend from brands in all sectors, not just the ‘traditional’ sectors for sport such as financial services, automotive, airlines and gambling.”

Image: AirAsia's partnership with UFC was announced at New York's Madison Square Garden in 2017.