- Sponsorship Sentiment Tracker – Wave 16
Companies selling sponsorship rights have been challenged to do more to protect themselves from partnerships that could damage their reputation or their finances.
More than nine in 10 respondents (91%) in the latest ESA Sponsorship Sentiment Tracker (SST) answered yes to the question: ‘Should Rights Holders undertake more due diligence and risk assessment to protect themselves (and stakeholders) from the possibility of a sponsorship causing financial and reputational concerns?’
The SST has been charting the sentiment of sponsorship professionals across Europe since 2020, and Wave 16 revealed a drop in confidence in the health of the industry, from an historic high of 7.5 in October to 7.13 in December. The dip from autumn to winter was especially pronounced among Rights Holders, where confidence fell markedly from 7.7 to 6.8.
Brand confidence stood at 7.2 while Agency confidence was the highest at 7.4.
A total of 133 professionals responded to the question about due diligence, with 120 answering yes and 13 saying no. More than 100 added unique comments to explain their answer, and the recent collapse of the cryptocurrency industry was referenced by about 20 respondents.
Many of those surveyed admitting to feeling wary about partnerships in the crypto sector or said they had already been negatively affected by an alliance that did not last. It was felt that crypto companies can be financially unstable and pose a particular risk to Rights Holders, fans and the industry’s reputation.
Other recurrent themes included:
- Rights Holders should take more precautionary measures to protect stakeholders and agencies from repercussions
- Rights Holders need to look more closely at who is writing the cheques to secure their sponsorship properties
- Consumers are more discerning than ever.
Quentin Thom, Co-Founder and Co-Head of perfORM Due Diligence Services, which specialises in assessing potential partnerships in crypto, blockchain or Web3, commented: “Recent events (including FTX) and a challenging ‘crypto winter’ market environment have served as a stark reminder to Rights Holders of the critical importance of transparency and robust due diligence to mitigate the reputational risk of bad actor association, plus financial loss suffered by them, and their fan base, as a result.
“The crypto space, and the firms that operate in it, are in a fast-growing industry, operating in a largely unregulated and volatile environment. Operational due diligence is an essential, new tool to sports, that can be used to understand what that crypto business is.”
The European Sponsorship Association has been tracking sentiment within the industry since March 2020, when Europe first went into lockdown to limit the spread of the COVID-19 pandemic.
ESA Chairman, Andy Westlake, said: “The results of Wave 16 of the Sponsorship Sentiment Tracker serve as a wake-up call for the industry and confirm what many suspected – that there is not enough due diligence taking place when vetting potential partnerships.
“Many organisations have suffered as a result of deals not materialising because of new partners collapsing or being unable to fulfil the terms of their agreement. I’m sure all Rights Holders in our community will take notice of the results of this survey and consider how they can protect themselves and their brand and agency partners when negotiating future deals.”
Click here to see previous sets of results.
For media queries, please contact:
Jonathan Coates | ESA Marketing, Communications and Events Manager
firstname.lastname@example.org | +44 7788 352219