Savannah is Bananas For Dropping Sponsorship Revenue
BY ADAM GROSSMAN
The Savannah Bananas announced this week that the team would be “dropping sponsors in an effort to make more money.” While this post will show why Block Six Analytics (B6A) strongly disagrees with the decision, the team’s choice does a highlight a perceived issue that ubiquitous sponsorship activations damage fans’ gameday experiences.
Why did the Bananas decide to drop sponsorship in the first place? Savannah Bananas President Jared Orton stated, “What [dropping sponsorship] will allow us to do in the long term is challenging us to create revenue opportunities solely based on building more fans, creating more experiences and serving more people in the way we want to serve them.”
Orton is wrong on the substance of his critique because sponsorships can have a positive impact on the gameday experiences in ways that directly serve the fans. For example, we recently highlighted how NASCAR’s partnership with Verizon focused on the company’s new 5G wireless capabilities. Faster Wi-Fi enables fans to more quickly share moments from tracks during races while also facilitating a better sports betting experience.
We also showed how partnership can build the fanbases while benefiting companies. For example, Allegiant is using its new naming rights partnership with the Las Vegas Raiders specifically to create more memorable experiences for customers while making it easier for fans to attend games. This includes “exclusive access to customers of the venue at various events” at Allegiant Stadium and providing “third-party travel products, such as hotel rooms, rental cars and hotel shuttle products and show/park tickets bundled with the purchase of air transportation.” While being also being beneficial to fans, the Raiders’ partnership enables Allegiant to create differentiation in the competitive airline industry through unique sports experiences.
Allegiant is exactly the type of company whose product offerings could beneficially to a team like the Bananas and its fans. The Bananas players competes in the Coastal Plains League, which is one of 14 NCAA-sanctioned summer leagues that use current college players. The company has also targeted “selected medium-sized cities, to which major carriers have reduced service” with typically lower cost fares, including the city of Savannah. Making it easier for friends and family of players to attend Bananas’ games through a potential partnership with Allegiant should help the team build its fan base.
The Bananas could then also explore a sponsorship with company like Airbnb. The company’s new partnership with the IOC enables fans to more easily find accommodations at Olympic events while also providing local citizens from the host country with the ability to monetize their dwellings during the games. Increasing the number of affordable accommodations in Savannah makes it easier for out-of-town fans to travel to games while also providing local residents (and fans of the team) a direct monetary benefit.
These examples highlight tangible ways for the Bananas to achieve their goals of serving fans and building its fanbase through sponsorships. However, Orton felt that the “sports sponsorship model of either selling more real estate or selling the same real estate for more made Bananas management feel like the Yellow Pages.” In particular, Orton appeared to be criticizing activations focused on maximizing brand awareness via in-venue signage or logo activations that seem to have been the core of the Bananas’ sponsorship revenue.
Even with signage / logo activations, however, Orton is wrong on the substance. Our Corporate Asset Valuation Model (CAV) enables our clients to identify and communicate the value to specific partners that would benefit from these types of in-venue activations. This often entails when a company is entering a new market or selling a new product / service.
Yet, Orton does articulate a conventional criticism with sponsorship in that teams will activate sponsorships regardless of how they impact the fan experience to increase revenue. This “criticism” exists even though “there are studies that show people expect ads when they go to sporting events, and find them part of the entertainment mix and ambiance.”
The problem is that Orton is “trying to kill a fly with sledgehammer.” More specifically, Orton Orton is right that the most effective sponsorships are often the ones that are organic / increase fan engagement. Eliminating sponsorship, however, is not the solution as demonstrated by the Bananas. Despite the “dropping all sponsors” decision, the Bananas will continue to have a partnership with the Service Brewing Company to brew Savannah Bananas Beer. This continues because Orton says “it’s just a cool partnership that adds value to our fans.”
The Bananas’ beer partnership and other examples from this post highlight why Savannah is wrong to drop sponsorship. The way to create more effective fan experiences is not to drop sponsorships. Instead, sponsorships can be used to help partners drive revenue and brand growth in ways that also increase fan value.