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Phil Andrews | The value of sponsorship revenue for minority Olympic sports

USA Weightlifting chief executive Phil Andrews talks about the difficulties of the Covid-19 pandemic for minority Olympic sports and identifies ways they can survive the shortfall in revenues caused by the postponement of Tokyo 2020

Phil Andrews

The previous 12 months have been incredibly difficult for national governing bodies (NGBs), particularly those sports that feature in the Olympic and Paralympic Games.

Revenue has been slashed due to the cancellation of events and competitions, not least the postponement of Tokyo 2020.

While some NGBs receive substantial financial support from governments or National Olympic Committees (NOCs), many sports are left to fend for themselves with income stemming from fundraising, membership, and sponsorship. At USA Weightlifting (USAW), less than 2 per cent of our income stems from the United States Olympic & Paralympic Committee (USOPC).

With such reliance on sponsorship income to keep the organisation afloat, there is a train of thought that NGBs will take on any and every sponsor that is willing to invest in a partnership. However, while the financial aspect can’t be underestimated, the deals that are most beneficial to both parties will involve far more collaboration.

For NGBs, a true partner, the “holy grail” so to speak, is a sponsor that is able to provide additional resources to the organisation on top of the financial investment. An example at USAW is our deal with recovery partner Therabody, whose offering also includes vital cutting-edge tools to our national team athletes to improve elite performance.

The United States Bobsled and Skeleton Federation (USABS) offer another great example with their engineering partner BMW. Many organisations would be happy purely to be associated with such an iconic brand, but USABS also benefits from engineering deployment that enhances performance on the track.

Some partnerships are always going to be more closely aligned than others, but sponsors should always have a true interest in the outcome of the agreement, be that community relations, financial, brand building, or sales.

A key factor that CEOs of governing bodies must consider at all times, particularly those not supported by government funding, is ensuring revenue diversification between different sources to avoid an over-reliance on one income stream. While sponsorship is vital; fundraising, coaching education, membership, events, retail and merchandising, ‘paid’ camp opportunities, online activities and gaming should also all be part of the mix too.

What I always ask myself is: How are private organisations making money? How are other NGBs doing so, and how can it be adapted to suit us? Sharing best practice with likeminded business leaders helps to explore previously untapped revenue streams and allows innovation to remain front of mind.

One of the reasons our organisation was able to deliver a profit in 2020, despite the numerous challenges associated with the pandemic, was our creativity in finding new ways to make money and get the most out of our wider network.

We were boosted by the continued support of existing sponsors and were able to sign additional deals with non-endemic sponsors that led to increased income. In addition to this, we raised over $70,000 to support regional clubs and assist with national competitions in the lead up to the Tokyo Games through a fundraising campaign.

Many people may put the increase in sponsors down to the four-year Olympic cycle culminating in the Tokyo Games this summer, but in truth it doesn’t have an impact on the majority of NGBs. The reason being that NGBs don’t actually own the Olympic Games rights, or the rights to the Olympic and Paralympic logos, with those rights held by the NOCs, NPCs and the International Olympic Committee. For sustainable relationships it is better to sell a sponsorship agreement on the basis of non-Olympic & Paralympic events, such as World Championships, day-to-day operations, domestic events, and social media activity.

Competing at an Olympic Games can be a very costly business for minority sports such as weightlifting, so we launched a #TokyoStrong campaign back in 2019 to raise funds for athlete travel, build a training facility in Tokyo, and provide additional support staff. The campaign was assisted in its fundraising by a number of USAW sponsors and underlines the importance of this revenue stream.

In truth, it is difficult to predict what the future will hold for minority Olympic sports. While the immediate focus is firmly on Tokyo 2020, the uncertainty around the pandemic continues to impact decisions that are made on a daily basis.

Organisations from every sector have suffered as a result of Covid-19 and more than ever it is up to NGBs to prove why they are worthy of sponsorship cash. This should lead to more meaningful collaborations between partners as authenticity and purpose is valued above all else.

This year has the potential to be one of the most expensive in history, with an influx of additional events that could not be held in 2020 and it wouldn’t be an exaggeration to suggest that some governing bodies may not survive. One solution is through increased sponsorship income, but with a recent survey indicating a confidence dip within the industry, clearly there is no easy answer.

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