February 11, 2009: Global recession takes its toll on corporate spending; pro sports expected to take the hardest hit
For More Information Contact:
William Chipps, IEG, LLC, Tel: 312/944-1727
william.chipps@sponsorship.com
www.sponsorship.com
Chicago, Ill. – Sponsorship spending by North American companies is expected to grow 2.2 percent in ’09 to $16.97 billion, according to IEG Sponsorship Report, the world’s leading authority on sponsorship.
The forecast is the smallest annual growth rate in the forecast’s 24-year history. Spending in ’08 was up 11.4 percent over ’07, just shy of IEG SR’s projection a year ago of 12.6 percent growth.
The sports sector is expected to be the biggest victim of the recession given sponsors’ willingness to bail out of big-ticket sports deals. IEG SR expects corporate spending on sports properties to total $11.6 billion, up 1.8 percent from ’08.
“The economy has forced many companies to keep a tighter hold on their purse springs, and big-ticket pro sports properties will take the biggest hit,” said William Chipps, IEG Sponsorship Report’s senior editor.
Projected dollar amounts for non-sports categories are entertainment tours and attractions: $1.66 billion, up 1.9 percent from $1.63 billion in ’08; causes, $1.57 billion, up 3.1 percent from $1.52 billion; arts: $848 million, up 2.5 percent from $827 million; festivals, fairs and annual events: $786 million, up 4.4 percent from $753 million; and associations and membership organizations: $503 million, up 4.4 percent from $482 million.
As a result, sports’ share of overall North American sponsorship spending will dip a percentage point to 68 percent, while festivals, fairs and annual events increases its share from four to five percent.
While corporate spending is expected to slow considerably in the year ahead, sponsorship is expected to once again outpace traditional media buys. North American media spending is expected to decrease 3.2 percent in ’09, according to the worldwide media and marketing forecast produced by GroupM, the global media investment management operation of WPP Group plc.
International Outlook Rosier, But Slowdown Will Occur
Just as the economic crisis has taken its major toll in the U.S. with a ripple effect elsewhere in the world, the impact of the downturn on sponsorship will be felt around the globe but not yet to the same degree as on the home front.
The absence of the Beijing Olympic Games and the unprecedented spending surrounding that event also will contribute to slower growth in ’09, although the Asia Pacific region will remain the fastest growing.
Overall, including North American spending, ’09 global sponsorship expenditures should reach $44.8 billion, a 3.9 percent increase over the $43.1 billion spent in ’08, a number slightly below IEG SR’s projection of $43.5 billion.
Subtracting U.S. and Canadian activity, spending by the rest of the world is expected to reach $27.8 billion, up 4.9 percent from $26.5 billion in ’08.
Europe will remain the region whose companies spend the most on sponsorship after North America. IEG SR expects European firms to spend $12.2 billion in ’09, up 4.3 percent from $11.7 billion in ’08. Asia Pacific companies should increase spending 7.4 percent from $9.5 billion to $10.2 billion.
Companies based in Central and South America should see 2.9 percent growth from $3.4 billion to $3.5 billion, while companies from all other regions are expected to grow expenditures 2.6 percent from $1.9 billion to $1.94 billion.
About IEG, LLC
IEG is the world’s leading provider of independent research, consulting, training and analysis on sponsorship. Founded in 1981, IEG provides corporations and properties with the strategies and tools to harness the sales and marketing power of sports, arts, entertainment and cause marketing.
IEG offers services that include sponsorship consulting, competitive intelligence and valuation. IEG also publishes IEG Sponsorship Report, the international biweekly newsletter on sponsorship; the IEG Sponsorship Sourcebook, the definitive guide to sponsors, properties and agencies; and other industry publications and sources.
IEG also is the leader in sponsorship training. Its internationally renowned Sponsorship Conference, now in its 26th year, takes place in Chicago from March 8-11, 2009. Through its conferences, seminars and webinars, IEG has trained more than 45,000 sponsorship executives worldwide.
For more information about IEG and the sponsorship industry, please visit www.sponsorship.com or call 800/834-4850 (outside the U.S. and Canada, 312/944-1727).