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Performance-Based Sponsorships: How Data Is Changing The World Of Sponsorship

By Roger Breum | November 19, 2018

Sponsorships have always been an important revenue source for all sports properties. They are also one of the fastest growing revenue segments in sport, with a growth rate of 4.8% and climbing. The sponsorship landscape is undergoing many changes, the most important of them being the shift to performance or incentive-based sponsorships.

Defining Performance-Based Sponsorships

A performance-based sponsorship is built on incentives for performances by athletes, teams and leagues both on and off -field. For example, in this type of sponsorship model, an appearance by a team/athlete in the playoffs (on-field), or a digital/social promotion that engages fans and leads to increased brand awareness (off-field) will lead to additional incentives from the sponsor. Performance-based sponsorships in the context of this article refers to incentives provided by the sponsor to its sponsoring properties based on their off-field or digital performance in promoting that brand.

Traditional sports sponsorships

Revenue sources for sports properties can be classified into 4 major groups:

  • Ticketing & gate revenues
  • Media and broadcasting rights
  • Sponsorships
  • Merchandise sales

Among these, media rights and sponsorships have been the two biggest revenue sources for sports properties. With change in media consumption among younger fans, media & broadcasting has been undergoing a major upheaval.

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