There seems little doubt that it is too early to declare the global economy out of the financial crisis just yet. While some encouraging signs have been noted, other contradictory statistics suggest the road to total recovery will be a long one. It is nonetheless fair to state that the stormy winds buffeting the markets a year ago have calmed. So how has sport coped in the troubled months since then? What have been the consequences for sponsorship deals, one of the key sectors of sport business? We attempt an initial diagnosis, with a few questions and answers.

Was sport’s experience of the slump any different to that of other sectors?
The financial storm spared no economic sector and sport was far from an exception. The history books will show, for example, that 2009 was a black year for motorsport, with the withdrawal of Honda, Toyota, BMW and Renault from Formula 1. On the other hand, if sponsorship deals and media rights acquisitions are anything to go by, sport was probably less affected than other industries. The true impact of the recession was felt more in a realignment and refocusing of partnerships, as opposed to a general, panicked stampede. Subscription television services coped well during the crisis, an important point for sport finances given the colossal budgets they make possible with rights acquisitions. In fact, they represented a kind of ‘safe investment’ to many members of the public. Analysts have concluded that while consumers are prepared, in times of crisis, to sacrifice a large portion of their leisure budget, they baulk at cancelling their subscription to a pay channel, something that would save them a good deal of money. Thanks to the comparatively rude health of subscription TV operators, TV rights have continued to sell well. The English Premier League football championship recently negotiated to sell its international rights for 1.2 billion Euros – a record figure that in no way reflects the wider economic climate.

How has the sponsorship market reacted?
By definition, the financial crisis affected the banking and insurance sectors first, two industries that have traditionally been very active in pursuing sponsorship deals. Hit by poor results, certain high-profile sponsors withdrew their backing, such as ING, who sponsored Renault in Formula 1, and the American company AIG, erstwhile shirt sponsors of Manchester United. The period of doubt did not last long in England, however, with Manchester United announcing in spring 2009 a deal with American firm AON (global leaders in risk management) for another record contract of 30 million Euros per year, up from 23.25 million Euros per year for their previous agreement.

While United are by no means a typical club, those figures show that sponsorship deals remain very attractive, even in a delicate economic climate. In particular, they are still an effective way of boosting brands keen to quickly establish their identity. Sponsorship agreements have a history of proving worthwhile for emerging or innovative economic sectors, with the internet and pioneering mobile phone releases the best examples today. Indeed, the crisis coincided with a surge in online betting websites, which have often been desperate to increase their name recognition. As a result, the likes of Betclic, Bwin and Unibet have invested heavily in sponsorship agreements.

In broader terms, a study by World Sponsorship Monitor has revealed that the number of sponsorship agreements increased during the recession, figures backed up by a second study which identified a 15 per cent rise in sponsorship deals in 2009. While there was a decrease in the number of contracts worth more than $10 million, it is clear that the sponsorship market resisted strongly.

What lessons have been learned for the future?
As the economic crisis draws to a close – if, to reiterate, it really is coming to an end – the major sporting competitions such as the football World Cup, the Champions League, the leading European football leagues, Formula 1, international rugby, even the foremost national rugby championships, and the major leagues in the United States have all demonstrated their power. It is nonetheless fair to ask what the future has in store for lower-profile sporting competitions. Having become more prudent in their investments, companies could shy away from backing less prestigious events. Officials on the professional tennis circuit (outside the Grand Slam events) have already become concerned, as have the organisers of non-Formula 1 motorsport races. That said, sport remains a superb means of communication and, for brands, an unparalleled tool for commencing a dialogue with their target markets. A global passion, it brings people together from across the planet and boasts an unrivalled capacity for mobilising supporters. As Kevin Roberts, editorial director of SportBusiness, put it, summing up the situation in the light of last year’s events: “Economic crisis or not, sport’s drawing power remains intact.”