UK: Sponsorship Trends In Sport

Last Updated: 20 April 2015
Article by Jon Walters

When we seek to identify trends in the sports sponsorship market for 2015 and beyond, two stand out above all others: the continued, and seemingly inexorable, growth of revenues derived from the market; and the utilisation of technology and data by brands to target a new generation of tech-savvy consumers.

Not much needs to be said from a legal perspective about the first of these trends: the numbers speak for themselves. The World Cup in Brazil generated $1.4 billion from sponsorship deals with 20 major companies, a 10 per cent increase from the 2010 World Cup. Global estimates place revenues from sports sponsorship rising to beyond $45 billion by 20161. And taking a yardstick from the UK market, Chelsea's new shirt deal with the Yokohama Rubber Company is estimated at a value of $60 million per season over five years (more than double the amount paid by Samsung).

It is the latter trend and the way in which brands are proving smarter and more innovative in how they use technology and information to target consumers in their sponsorship activation that poses more interesting questions. As Albie Hecht, former Nickelodeon President and CEO of TV station HLN, puts it: "to capture an audience you have to capture the way they behave"2. The means of doing so, and delivering the ability to do so, are in evolution, creating challenges for sponsors and rights holders alike in terms of how this goal can be achieved and what can legitimately be done in its pursuit.

The value of data

The package of rights offered by rights holders has traditionally been, and to some extent still is, a linear and tangible 'menu' of deliverables. Formula One led the way with its on-car branding as a means of catching eyeballs, supported by a money-can't-buy hospitality programme allowing sponsors access to unrivalled client/contact entertainment and networking opportunities (as well as the ability for a motorsports mad CEO to indulge his passion).

It's trite to say that the development of broadcast channels and digital media have transformed the way in which eyeballs can be caught, but it is nonetheless critical to understanding where sponsorship is now and where it will head. Rather than passively engaging with audiences, brands want to use the package of rights on offer to engage actively with consumers through new technologies. As such, access to a rights holder's databases is key so that sponsors can specifically target relevant content at each customer group and social media platform in a personal way.

Real Madrid has over 15m followers on Twitter and Cristiano Ronaldo alone over 34m (just beating JLo to 13th in the Twitter rankings). Despite countless examples of sporting personalities (Mo names mentioned) and organisations using social media to their own detriment through 'Twitter spats' and the like, the value of access to such a following is of huge commercial potential. Recent examples of sponsorship deals have shown that the potential for sponsors to have access to systems through which they can make highly targeted marketing campaigns is a key driver. Back in 2012, it was suggested that the potential value associated with Arsenal's revamped Customer Relationship Management system gave impetus to the renewal of the club's partnership with Emirates.

Data protection issues

What then are the legal pitfalls awaiting rights holders and sponsors? Certainly, each must tread carefully with regard to compliance with their responsibilities as Data Controllers or Data Processors under the Data Protection Act 1998 (DPA). Getting this wrong could mean a fine from the Information Commissioner, which could be particularly significant under the incoming EU General Data Protection Regulation which is likely to come into force in the next few years. Under the draft proposed by the EU Parliament, Data Controllers or Data Processors in breach of the Regulation could be faced with fines up to 5% of annual worldwide turnover or €100m, whichever is the greater.

The relevant Personal Data in question are likely to be names, addresses (digital and physical), and other identifying features such as individuals' interests. Take the right for a sponsor to run a targeted promotion for one of its product lines whereby ticket holders for a football match (who have provided their details to the football club in the first instance at the point of purchase) are offered the chance to enter a sponsor-backed competition to meet certain players after the game in return for buying said product. This is common enough and requires the communication of that promotion to the ticket holders by using their email addresses and names. In this scenario, there are a number of obligations imposed on the Data Controller under the DPA (note the 8 principles in particular3), including the following:

  • Personal Data must be processed "fairly and lawfully"4. The key point here is that individuals need to provide consent to the ways in which their Personal Data are used. Rights holders should aim to obtain consent from individuals, when they collect their data, to share their information with (limited and carefully selected) third parties, including sponsors, for marketing purposes in order to maximise the potential value of their data. In our experience, most rights holders do this well, but the clarity of the opt-ins / opt-outs could sometimes be improved and we have encountered issues relating to older customer databases which do not have the necessary consents; and
  • the rights holder is required to have a contract with the third party governing the transfer of Personal Data. This contract should set out that the third party will only process the relevant Personal Data in accordance with instructions from the Data Controller5. This will typically sit in the sponsorship agreement which will, therefore, need to include clear drafting on the rights and responsibilities of the sponsor in its use of data.

While the obligations above most obviously bite on the rights holder as Data Controller, brands should remain alert to the limitations under data protection and marketing laws on their activation plans. Brands may collect data themselves through their marketing activities – for example, a hyperlink from an event website to the sponsor's site for a promotion may lead to users submitting their details for the first time to the sponsor. In this scenario, the brand will be the Data Controller and therefore subject to the requirements of the DPA imposed on Data Controllers.

There may also be marketing activity where it is less easy to discern which party controls the data. Joint initiatives, such as the release of a title sponsor branded mobile app for a Tournament (an Aegon Championships app for the annual tennis tournament at Queen's, by way of hypothetical example), demand clarity in user terms and conditions as to who is the chief operator of the app and, therefore, Data Controller and who is entitled to use the information collected. A member of the public may well only see the name Aegon and not consider that the LTA may also wish to contact them, whereas contrarily between Aegon and the LTA it might be clearly understood that the LTA owns the app and data collected through it.

Clear and transparent mobile app terms are particularly important from a privacy perspective in light of recent attention given to the area by regulators in a number of countries. Practical advice can be drawn from the Information Commissioner's Office and the Article 29 Data Protection Working Party (the European advisory body on data protection and privacy), such as ensuring that end-users are provided with clear information in plain language about their privacy rights, and empowering consumers to manage their privacy preferences in real time.

Monitoring marketing practices is on the Information Commissioner's agenda, and from 6 April 2015, the threshold for tackling unsolicited marketing was lowered. Individuals will no longer need to prove that they have suffered "substantial damage and distress" from unsolicited direct marketing in order for the Information Commissioner to take action6. If a rights holder is to give rights to a sponsor to target individuals within its databases directly, they will need to be able to rely on the fact that the sponsor will only do so in accordance with their instructions. And likewise the sponsor will need to ensure that it acts appropriately.

These data protection challenges are inexorably linked to technological development. Having an increased number of means by which data can be collected and marketing messages distributed is a double-edged sword in that it offers enhanced opportunity for consumer engagement, but demands increased alertness to data protection requirements. We are witnessing the advent of connected stadia, such as the Barclays Center in Brooklyn (transformed by Cisco's "Connected Sports and Entertainment Solution") and the Levi's Stadium (home to the San Francisco 49ers) where use of wireless beacons offers Bluetooth connectivity to the fans. The possibility of pushing sponsor messages to a 49ers fan's smartwatch at half time directing him or her to the nearest beer vendor in the Levi's Stadium is now an achievable reality.

Conclusion

If all of the above makes the modern day sports marketer's job seem like a minefield, it need not be. It is evident that the opportunities afforded by technological development and the use of data can be overwhelmingly positive for rights holders and brands alike. Embracing the value of data is an attractive option for all concerned and we will see it continuing to be put to effect to maximise the commercial revenues of rights holders and sponsors' returns on investment.

From a rights holder perspective, it can broaden its portfolio of rights and use data to ensure that it has a detailed understanding of the market position and its appeal to brands. Harlequins have been outspoken about the fact that having a deep understanding of its customer base means that partners can be accurately and appropriately targeted. Such an understanding ultimately puts rights holders in a strong position to frame and negotiate more lucrative sponsorship deals, given that they can offer highly tailored rights packages backed up by information on the various customer groups to which they have access.

From the perspective of the legal draftsman, we would suggest that flexibility is required to allow the contract to flex and adapt to deliver the benefits of new technologies to each party. It is impossible to see the future, but consider including language such that analogous technological means of delivering a right (for example, LED perimeter advertising boards (cf static boards), mobile apps (cf mobile optimised websites)) can be accommodated and, if you are acting for the brand, seek to negotiate at least a first option to discuss use of new rights that may become available due to new technology.

Finally, don't fear the data protection regime. Compliance is important, particularly in light of increased fine issuing powers available to the Information Commissioner, but the principles of the DPA are common sense. Clarity and transparency as to how, and by whom, data will be used are key and can be easily achieved with the use of the correct contractual and consumer facing language.

Footnotes

1. Changing the game: outlook for the global sports market to 2015, PWC, December 2011.

2. Synergy Sponsorship Outlook 2014: Now, New & Next.

3. DPA, Schedule 1.

4. DPA, Schedule 1, Part 1(1).

5. DPA, Schedule 1, Part 2(12).

6. Privacy and Electronic Communications (EC Directive) Amendment Regulations 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.