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Sam Yardley | International sponsorship is the new major league frontier

Sam Yardley, executive vice-president, North America at Two Circles, explains why international fans are central to sponsorship growth for US major league teams

Photo: Sam Yardley

International audiences are, in my view, the most undervalued area of US major league sponsorship. Every day, I see a reminder of the globalisation of sports that reinforces why non-domestic fans are central to sponsorship growth.

As a sports nerd, spotting someone proudly donning a team jersey or cap a long way from “home” is a delight. European soccer jerseys are a particular favourite here on the West Coast – and an increasingly frequent sight as the Premier League and others continue to grow interest with Gen Z, whose ties with teams in their localities are far weaker than previous generations.

It goes both ways. Some of the figures around international fandom built by the US major leagues are staggering. In China, for instance, it is estimated the NBA has north of 500 million fans. Though clearly their depth of fandom will be different, that represents around three and a half times more than the number of sports fan we estimate across the entire US. The NFL’s recent moves in Germany, meanwhile, are testament to the momentum picked up in Europe over the decades.

From a broadcast perspective, the major leagues have done a great job of commercialising international fandom through TV deals – look no further than the NBA’s $1.5bn (€1.25bn) deal with Tencent in the Chinese market – and growing their owned D2C streaming services.

However, from a sponsorship perspective, the commercialisation of international fandom has been significantly under-exploited.

From a US team perspective, this is partly due to league structures that protect competitive parity. But we’ve seen the NBA launch its ‘International Marketing Program’, a three-year test allowing teams to strike deals with up to two sponsors activating outside North America – and as team owners push for new ways to make up for lost gate revenue over the last 18 months, Covid will only accelerate similar developments across other leagues.

Because of this, I believe international team sponsorships are one of the biggest opportunities for the major leagues to grow sponsorship revenue in the next decade.

A comparison between the major leagues and the Premier League – which has a cumulative global TV audience that exceeds three billion viewers every season, and whose teams have built a wide spectrum of global and regional sponsorship deals  –  gives a decent idea of why I’m bullish.

According to Forbes, the average revenue generated by an NFL franchise in the 2019-20 season was $477m, whereas in its most recently published financial year – ending June 2020 and itself Covid-affected – Manchester United generated $259m from sponsorship alone.

Though United is the market-leader in this area, it has built up a portfolio of global and regional partners sponsorships, capitalising on the huge attention it and the Premier League commands globally. The major league teams should see this as the huge potential presented by opening up new markets, for existing partners and to attract new partners in new categories.

In our experience, there are three key areas for success for any sports property looking to grow its sponsorship businesses by developing and commercialising international audiences. And it’s important to emphasise that it’s a long-game, not an easy-win.

  • Putting audience growth first

Though at a league level the NFL and NBA in particular have been growing international audiences for decades, teams themselves are still immature properties in most world markets. Any sponsorship opportunity will be far bigger following investment in audience development and demonstrating how fans can be reached by different channels and segmented by attitudes and behaviours. This requires a long-term strategy, and local (in-market) resources.

  • Going beyond social

Social media platforms, including those popular by each local market, will be useful to grow and reach audiences – but the real long-term value comes in going direct: creating owned digital channels through which teams can communicate with their fans, and collect first-party data on them in the process.

In the long-term, these channels will become hugely valuable as they’ll allow teams to give brand partners channels to undertake measurable, hyper-targeted digital campaigns and support brand exposure on more traditional channels such as logo placements and billboard ads.

  • Understanding local demand and nuances

Globally, brand outreach needs to be done differently by market – distinct business customs, ways of working, and negotiation styles should not be underestimated.

The same goes for developing audiences; don’t expect US phrases, culture, celebrity to always carry over – even in English-speaking markets – and be aware that colour schemes, animals and symbols, for example, can have different meanings in different countries and languages.

That said, there are also significant sections of the fanbase that will want the authentic US experience. Data is invaluable here, as through analysis and segmentation teams will be able to gain an in-depth understanding of fan attitudes and how they might differ across and within markets.

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