Corporate Sponsorship of Global Sporting Events— Understanding the Risks/Rewards of Corporate Sponsorship
Corporate sponsors of international sports events encounter difficult decisions about whether they should sponsor a certain event in a country with uncertain future. Especially with more and more emerging markets take on the hosting country roles, it is crucial for sponsors to evaluate the potential political, economic, and social risks with the hosting country before entering a sponsorship contract. The success of a sports event could help its sponsor elevate its brand image, sales prospect, and reputation. On the other hand, an unsuccessful event could incur material damage to a company’s name and account.
This capstone project was commissioned by Booz Allen Hamilton to device a framework to gauge the country risk associated with sponsoring a mega international sports event, such as the Olympics, FIFA World Cup, and Rugby World Cup. The team adopted both quantitative and qualitative research approaches. For quantitative research, it performed regression analyses of country risk indicators’ impact on historical international sports events’ success, which was represented by an index of media coverage on scandals. For qualitative research, the team conducted case studies on P&G and Johnson & Johnson, with an intent to examine the connection between CSR and sports sponsorship and their outcomes.
After careful research, the Capstone team came to the following four major conclusions:
- There is clear correlation between country risks and an international sports event’s success.
- There is considerable vulnerability in sports sponsorship strategy due to country-event risks.
- Corporations with strong linkage between CSR and sports sponsorship should supplement its business strategy with CSR to hedge against the potential country-event reputational risks.
- A strong linkage between CSR and sports sponsorship helps companies enhance its competitiveness in the market.