Do New Venues = New Sponsorship Dollars?
By Adam Grossman
If you build it then they will come, but how long will the stay? The first regular season game at the Golden One Center was the culmination of the city of Sacramento and ownership’s efforts to ensure that the Kings would be in the best possible position to achieve success on and off the court. The Kings are part of a group including the Milwaukee Bucks, Minnesota Vikings, Minnesota United, Atlanta Falcons, and Atlanta Braves that have recently opened or will soon be opening a new venue.
While there are many reasons to be build a new venue, one key element is generating new corporate partnership opportunities. Naming rights deals are the most common with the Vikings and Falcons having already secured lucrative deals for their new venues. However, new venues also provide opportunities for teams to create new sponsorship activations inside the venue including new / improved dynamic signage, location-based advertising campaigns using geo-fencing or beacon technology, and larger / more corporate hospitality suites. A new venue seems like a slam dunk for teams looking to maximize sponsorship revenue.
Sports properties often use the opening of new venues to also increase the price points of sponsorship opportunities. Not only do new venues mean a higher number of activations but they should also generate a higher number of impressions with fans and media. In particular, per game attendance should increase as fans will want to come to a game at a new venue to a compare the new experience to the old one. The paid and earned media surrounding a new venue opening means that teams can maximize the exposure provided to corporate partners.
However, teams need to be careful to not rely on new venues to generate new sponsorship dollars over the long-term. More specifically, the initial increases in impressions can decrease over time as the newness of the venue wears off for fans and the media. This then could lead to decreases in attendance and earned media and lower the number of impressions generated by new venue sponsorship activations.
Even if the increases in impressions are maintained over time, corporate partners are not solely looking at the quantity of impressions as the benchmark for success in their relationships with team. They are also looking to make sure that all impressions help drive new business and help achieve their brand goals. More specifically, partners want to make sure that impressions are going to the right people, in the right place, and at the right time.
In addition, corporate partners are not looking solely at the in-venue portion of corporate partnerships. Sponsorships are often sold as integrated packages where venue activations need to evaluated alongside media, social, event, intellectual property, and hospitality channels. The most successful sports properties will be the ones who can communicate the value of new venue activations while also clearly articulating the return on investment in these other channels at the same time.
New venues can help buyers and sellers of sports sponsorship to increase revenue. However, sports properties should not solely rely on short-term impression boosts for new venue corporate partnership agreements. Instead, sports properties must communicate to partners how a new venue will generate a high quantity of high quality impressions over time.