According to new analysis by Two Circles, sports rights-holders’ sponsorship assets are worth £49bn globally leaving a gap of £14bn of unrealised revenue in 2019.
“Most rights-holders continue to package and sell sponsorship just as they did 20 years ago – offering brand exposure through linear broadcast coverage as the main benefit for brands,” said Gareth Balch, Two Circles CEO.
“Globally we’re spending more time consuming entertainment on digital platforms; we consistently see a disparity between what brands need to reach an audience effectively and quantifiably, and what digital assets rights-holders are able to offer in their sponsorship packages,” he added.
Sports sponsorship has grown by £6.5bn since 2014 yet rights-holders have lost out on £12bn a year in unrealised revenue on average.
Two Circles predicts spend on sponsorship will increase by 6% on average year-on-year between 2020 and 2024 to hit £48bn overall by the end of the period.
Balch added: “Rights-holders are adapting to this new world and we predict a sports sponsorship correction: by embracing the power of data and digital to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses. This will drive greater spend from brands in all sectors, not just the ‘traditional’ sectors for sport such as financial services, automotive, airlines and gambling.”