09 Apr 2020
Posted in Automotive
Automotive sports sponsorship will be a casualty of COVID-19, says GlobalData
GlobalData’s Sportcal tracking reveals there are more than 1,000 instances of automakers and dealerships actively sponsoring sports activities or teams. The estimated annual spend of those deals comes to $1.1bn and, for deals extending past 2021, auto companies are already thought to have pledged more than $1.7bn.
Mike Vousden, Automotive Analyst at GlobalData, comments: “The rapid onset of COVID-19 means auto firms will reassess spending plans. Sports sponsorships will probably be among the first expenses cut as they seek to ensure they have enough free cash to make sure they make it through the lean times ahead.”
GlobalData’s Sportcal tracking shows that all of the top 20 automakers by revenue are involved in sports sponsorship. Some 42% of automotive sports sponsorship spend is concentrated between five of the top automakers – Toyota, General Motors, Hyundai, Volkswagen and BMW.
Vousden continues: “These companies see sports sponsorship as an effective part of their marketing strategies allowing them to target key audiences beyond traditional advertising channels.
“For sports teams and organisations, the biggest worry is that automotive companies may not decide to renew their sponsorship deals. Of the more than 1,000 active deals GlobalData SportCal tracks, only 9.4% are known to extend beyond 2021. In the worst-case scenario, where none of the remaining deals are renewed, that could represent a funding hole of nearly $690 million – a significant loss for sports rights holders.”