The US sports sponsorship market will total $15.5bn in 2020, an annual rise of 5.4 per cent, according to new data analysis and industry projections by sports marketing agency Two Circles.
The total will again be driven heavily by the dominance of live sports on TV, which comprised 92 of the 100 top-watched US broadcasts of any type in 2018. The 2020 sponsorship dollar figure also represents an acceleration in growth from the 3.5 per cent rise between 2018 and 2019.
But Two Circles also detailed in its analysis that sports sponsorship assets remain undervalued to significant degrees, and that the industry will miss out on $5.7bn on unrealized value due to unsold inventory, unreported engagement, and outdated packaging of assets.
“As the last bastion of live entertainment, sports’ ability to deliver at-scale audiences is unrivaled,” said Sam Yardley, Two Circles senior vice president of consulting. “However, of the last 50 years, the vasty majority of sports sponsorship inventory hasn’t changed, and we consistently see a disparity between brands need to reach an audience effectively and quantifiably, and what assets they’re offered as part of a sponsorship proposition. Digital channels in particular aren’t packaged and integrated well enough.”
Those digital channels overseen by sports properties will represent 8.6 per cent of total value delivered to sports sponsors in 2019, compared to 80.8 per cent for television.
But more than half of that 2019 sports sponsorship total of $14.7bn came from just two sectors: financial services and automotive.
“Sports properties need to deliver better returns for their partners, and create digitally led packages that attract brands that don’t spend significant amounts on sports sponsorship,” Yardley said.
Two Circles projects a continued growth curve for sponsorship, with the aggregate US spend reaching $19.8bn by 2024, representing an average 6.1 per cent annual growth between 2020 and 2024.
The agency, among other projects, is aiding Bruin Sports Capital’s OverTier on the deployment of the NFL Game Pass streaming subscription service internationally.
Value of Sports Sponsorship
2014 – $12.1bn
2015 – $12.5bn
2016 – $13.1bn
2017 – $13.6bn
2018 – $14.2bn
2019 – $14.7bn
2020 – $15.5bn*
2021 – $16.4bn*
2022 – $17.4bn*
2023 – $18.5bn*
2024 – $19.8bn*
* – Projected
Source: Two Circles