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Sponsorship Spend On US Sports Up 7.6 Percent In 2010

SIM Magazine, November 17, 2010

The four major North American sports leagues are expected to see sponsorship revenue rise 7.6 percent in 2010 thanks partly to the return of the financial and automotive sectors after a decline last year brought on by the weak U.S. economy.

Spending by companies backing the National Football League, Major League Baseball, National Basketball Association and National Hockey League are projected to increase to more than $2.28 billion from $2.12 billion last year, according to IEG, a unit of advertising firm WPP Plc that tracks such spending.

The same leagues saw sponsorship revenue fall 3.9 percent last year, IEG said.

"The four major pro sports leagues and their teams have largely regained their sponsorship footing after a devastating 2009," IEG senior editor William Chipps said.

The leagues are each expected to show gains of almost 7 percent, led by the NHL's projected 9.4 percent increase, IEG said.

The full year-end review next month for all U.S. sports sponsorship spending should show a greater increase than the 2.8 percent projection made at the beginning of the year despite struggles by amateur sports, auto racing, golf and tennis, IEG said.

North American sports had been hurt over the past two years by the recession, which not only led consumers to cut back on attending games, but corporate backers to pare down on sponsorships as well as the purchase of pricey luxury suites and high-end tickets.

However, Chipps said the rebound this year showed there was pent-up demand after so much corporate budget-cutting, especially by financial services firms. Leagues such as the NFL and NBA also eased rules prohibiting team sponsorship deals with lotteries and liquor companies.

He pointed to the NHL's U.S. deal this month with Discover Financial Services <DFS.N> and the NBA's September deal with Spanish bank BBVA <BBVA.MC> as proof. This summer, the NFL replaced Bank of America with Barclays as its official credit card sponsor.

The 2010 increase also was due to the availability of previously unmarketed sponsorship inventory, Chipps said.

Spending on the team level also has rebounded this year, driven not only by the return of financial services firms but also the auto industry, IEG said.

The NHL showed the largest gain, rising to an estimated $327 million this year from $299 million in 2009, IEG said. The hockey league was followed by the NBA (up 8.5 percent to $536 million), the NFL (up 7 percent to $870 million) and MLB (up 6.7 percent to $548 million).