How do you define a good sports sponsorship?
There are plenty of definitions, and no shortage of software tools and measurement businesses to answer that question. But, for the consumers — the actual sports fans — there is a bit of you know it when you see it. Part of it is longevity, with brand-sport associations that have been together so long, it feels like they go together like peanut butter and jelly. The activations aren’t interruptive but additive or complementary.
For the brands, they’re getting the proverbial bang for their buck. But that ‘bang for the buck’ can mean a lot of things, as anyone who has worked on the brand or property side can attest. The roots of sports sponsorships may have been outfield signs and facsimiles of newspaper ads, but the options are more varied and solution-oriented in modern times.
For the teams and leagues, it’s more than just a paycheck. The revenue is key, to be sure, but other elements come into play — brand associations that can elevate their own, better experiences and content for their fans supported by willing partners, and putting their stamp of approval or endorsement on products and services that help them and can help their fans, too.
Nick Kelly has been on all sides of the sponsorship equation. He witnessed the religious-like fealty with which fans treated their favorite drivers’ partners in NASCAR early in his career, he’s walked around a stadium seeing product get poured (usually!) with AB InBev, he was in the middle of deals that saw the sponsor selling service back to the property at Verizon, and he’s been at the helm of a major pro sports league as CEO of then-expansion Major League Soccer club Charlotte FC. He talked about the diversity of sponsorship ‘ROI’ and approaches for different brands, a departure from the ‘cookie-cutter’ paradigms that may have persisted at a less enlightened time.
“On the AB (AB InBev) side, it was very marketing-heavy,” said Kelly, who today has taken his years of experience and insights to help others as CEO of Encore Sports and Entertainment. “Like, we could never really tie it to direct sales: one, because it was super complicated, and two, it was illegal. I could never walk into Yankee Stadium and say, ‘Well, only 70% of the beer you’re selling here is mine, but I’m paying you 100% of the sponsorship revenue. What gives?’
“On the Verizon side, you could be very black and white,” he said. “So a lot of it was very marketing ROI driven, brand lift, social media engagements, a lot of the soft metrics, but they mattered. And look, sports still are probably the number one, if not the biggest marketing pillar or marketing channel you can have to drive brand awareness. On the Verizon side, for us, a lot of it was business back. A lot of it was ‘What is the value I can pass to our 130 million consumers?’ I’ve got 130 million consumers; what do they get as a Verizon customer and a Washington Commanders fan? [For example], is there 10% off the team store? Is there early access to tickets? We didn’t really even take into consideration a lot of the soft metrics. They were there, but that wasn’t really driving the immediate value back to us.”
The sponsorship paradigms have undergone more shifts than ever in the last couple of decades, too, as sports teams have adopted new platforms that allow them to reach more fans than ever, and with often wildly unpredictable swings in audience. New signage and new naming rights were easy enough to adapt, but then Facebook posts and tweets and Stories came along, and, more recently, TikTok, where a post could reach hundreds or millions, with even social media managers not always quite sure which posts will hit.
Kelly provided insight from his perch, as he was right in the thick of this rapid evolution in sponsorships, full of opportunities and uncertainties.
“The bigger challenge became as new assets came online, and we wanted to create them with teams; I think we both struggled to price them,” said Kelly. “It’s like, ‘Hey, we want to come up with a content series for TikTok; well, TikTok just started, we’ve never priced that out’. Or when we signed the deal, they only had 20,000 followers, and when the deal came up, they’ve got 3 million. And it’s fair. So I think it became a little bit more of like we do understand the rate card is a league-informed baseline of what teams charge, but not all teams are created equal. And honestly, the content that teams create isn’t all equal.” [Interesting to note that Kelly called out the Jacksonville Jaguars as being particularly good at content during his time working with AB InBev]
The often-volatile nature of sports teams’ audiences, especially on social platforms where the difference between a winning and a losing season could sometimes vastly inflate or deflate the metrics reached, led Kelly and his colleagues at AB InBev to create a new model, an incentives-laden sponsorship deal. The goal for both sides was for the team to crush it, to hit the highest of highs and receive the highest payout; that’s what AB InBev budgeted for, too. Teams can go on championship runs that deliver better and bigger audiences than expected; they can also find a new groove in content production that captures big numbers on social and digital platforms. The new deal structures ensured they could get rewarded for that success. Kelly explained the how and the why.
“In theory, we probably had 15 to $20 million a year at risk that was based in incentives,” he said,” but we fully expected to pay it. But it was very time-consuming and cumbersome to coach all the teams on how to get to that successful metric. It was based on everything from the social media side — we even did it off of attendance or championships — so they can just get paid their bonus now, so then when the renewal comes up, it’s like, ‘Oh, we’re more valuable.’ ‘[Well] I already paid you for that. We already paid you for winning a championship, but if you don’t go to the championship, if all of a sudden you go from winning the NBA Finals to not making the playoffs, it’s not like I have a chance to come back down. So it helped us in forecasting a lot.’”
There’s a sense of fairness and trust cultivated with deals like that. And even the notion of ‘coaching’ teams to those metrics caught my eye. Memories are long in professional relationships, and the sports industry is no exception. The importance of honest and open communication was a consistent throughline during my discussion with Kelly, and is no doubt a big part of how he has cultivated successful partnerships, activations, and initiatives over the years.
While you may walk with your head a little higher after buying a new car and feeling you got one over on the salesperson, the best partnerships are when both sides win. The individual on the brand side driving the sponsorship wants to ensure the company’s decision to invest in the partnership was the right one, while the property side wants to also show they more than justified the cost of the deal, and that renewal is an easy decision when the deal expires.
“Nobody on the brand side ever goes into a deal trying to think ‘I gotta get as much out of this as possible because we’re likely not going to renew’,” said Kelly. “The brand side is overly incentivized because they have probably fought to get this deal, so they need to make it look like it’s the smartest decision they have ever made or recommended to their CMO or CEO by getting a ton of value out of it and then ultimately renewing the deal because it was such a great investment.
“Most times when a partnership doesn’t work, it’s either, one, a change of strategy which the team can’t help, or two, the brand itself didn’t put the right resources to get the most out of the partnership. Very seldom is it that the team has not provided or been flexible enough for the brand to get the value out of it. Because, look, no team wants to take any category back to market. So I think a lot of the communication has to come from the brand and the agencies to get to success, because you having to justify why you spent X amount of dollars on a partnership and why that was a bad decision three years later, it’s tough, because it puts your job at jeopardy.”
Kelly continued, discussing why he understands the frustration that can come from each side, as both brand and property want to do right by the partnership, and can feel pressured to deliver and over-deliver on expectations.
“That’s the one thing that we’re counseling some of our clients on now is like, you fought for this, you fought for, or your CMO handed you this or your CEO, you need to make it work,” said Kelly, referencing the advising and work he and his team do today at Encore. “You’re not in a position, and the teams should know that, like, they’re in a position to make all of these deals work. And when they’re being a pain in the ass and they’re asking you for stuff, it’s not because they’re being selfish, and it’s not because they just are trying to get more than they want, they’re trying to justify the expense they made, period.”
These conversations are often framed around how the property (team/league) delivers sufficient value and results for the brand. But, in recent years, as more emerging sports leagues have entered the ecosystem and women’s sports leagues continue to command and demand attention and investment, the pollyannaish paradigm of partnerships are more viable and visible than ever. These are two-way relationships where the partner helps elevate the league/team as much, if not more, than the other way around.
Big brands, with deep pockets, haven’t just put their money where their mouth is, by betting on the growing women’s sports leagues, especially, they’ve also taken action to ensure the gatekeepers appreciate the consumer demand for women’s sports as much as the sponsors believe in them (and the data often dictates).
“They don’t just write the check and then walk away and hope the partners do it all,” said Kelly, discussing the partners of the National Women’s Soccer League (NWSL), who’ve often been vocal about getting games more exposure on broadcast networks, with whom they’ve also invested. “They’re amplifying on their traditional, social media, above the line, everything; they’re there. They’ve done a great job of connecting the dots.
“They don’t just hand the NWSL a check and then say, I don’t have anything left for you, broadcast partners or players. They’ve been able to close the loop. They’re supporting the broadcast partners. Then they’re making demands in a very responsible way of like, ‘We need to see this more on linear [television]. We need to see this more in the right time slots.’ And it really takes somebody with the right vision and the right brand, with the right vision to pull it forward because the commissioners of these leagues are in a tough spot because they want to drive as much revenue as possible to the league to then disperse out to all the owners. Then obviously they want the teams driving their own revenue, too. But when you get a brand like Ally who does the full flywheel of every point, everybody gets a little piece, and everybody’s getting elevated.”
There’s a perception bump, too, that can come when a big-name brand signs on to partner with an emerging league. Pick your favorite upstart league and its trajectory can often be seen through its sponsor roster. The endemics typically come first; it makes sense for equipment manufacturers and apparel partners, for example, to sign up early and a lot of the early fans are participants in the sports, so fit a sweet spot segment of potential customers for brands endemic to the sport. As the fan base broadens, with more interest and engagement, so, too, does the list of partners.
Before long, well-known brands in the auto, insurance, beverage, quick-service restaurant, and other CPG and B2B brands seeking to reach a wide swath of fans. The day a league signs a blue-chip brand like AB InBev can be a signficant signpost — a big brand believes in the league, and the windfall that comes with such a sponsorship allows for further investment and growth. Kelly reflected on this idea, noting the big brands he represented were cognizant about what their investment could mean to a growing league.
“We weren’t naive to the influence we had when we were at either one of those companies I worked at, because, we knew that if we came on to a league early on, because we believed in it, it helped establish credibility for the league if you have, you know, a Budweiser or Verizon on board early,” he said. “And it was just very much a ‘Do we believe that this is, one, good for us because we’re hitting another audience?’ And two, ‘Do we believe they have the infrastructure in place to actually go and drive even incremental value for us than we actually are investing?’
“We saw hundreds of presentations over the years from esports teams. And, you know, we did Drone Racing League for a while, all these other ones where it was just like, you know, it meant a lot. For us, it became a little bit more we got on the sales tour with them promoting like, well, why did you invest? And they would just say, ‘Hey, can brand X call you and tell you about what you’re doing in our sport?’ And it’s like, sure. So, oftentimes in these emerging sports we became a little bit more of like an evangelist for why did you invest. And look, we felt that it was a privilege and also a responsibility of, if we were investing here, we got to see that it works.”
Sports sponsorships may have started out, decades ago, as advertising transactions and static assets, but they’ve since evolved into integrated relationships. The most successful deals today are no longer about merely buying access, but about engineering a dynamic where every stakeholder wins: the brand justifies its investment, the property elevates its value, the emerging league gains credibility, the fans receive better, more engaging experiences.
The modern sponsorship is a flywheel where both sides, and increasingly the fans, are fully invested in the other’s success. It requires honest communication, the flexibility to account for unpredictable growth, and the vision to see an investment not just as a cost, but as a commitment to the growth of the entire sport. The biggest win isn’t just a renewal, it’s a legacy of impact.
A good sports sponsorship is one that leaves all parties better off for the relationship. It’s not just a line item on the budget, but a statement of shared belief, proving that when partners rise together, everybody wins.
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