In "Does Baggies shirt saga signify Premiership slowdown?", BBC business reporter Simon Atkinson discusses the economics of shirt sponsorship -- the now well-established routine by which a sports team (in this case, an English Premier League football team) sells space on its team-members' shirts to a brand-owner who wishes to secure wider coverage and brand-familiarity among the consuming public.
Right: happier days -- when the Baggies rented shirt-space to T-Mobile
Since Premier League teams are watched by large crowds at live matches and by vast international audiences when games are televised, and their supporters advertise the same brand when they purchase replica shirts, the degree of public awareness of a brand can be greatly enhanced -- though sponsorship has its drawbacks too. One is that the sponsor's brand may be associated with an unsuccessful or unsportsmanlike team; another is that the sponsor's brand is damned by consumer enmity - a logo appearing on a Manchester United or Real Madrid shirt, for example, will not endear the brand to supporters of Manchester City or Barcelona respectively.
The article reviewed here cites the position of the West Bromwich Albion (WBA, "the Baggies") football team, which has returned to the Premier League following its relegation two seasons ago. WBA unusually has failed to obtain a shirt sponsor. The side's failure might be put down to the continuing effect of the credit crunch, or possibly because the team's relatively lowly status does not chime in with the aspirations of prospective sponsors -- or quite possibly because there is a gulf in expectations, which is yet to be bridged, between the Baggies' valuation of its shirt-space rental and what prospective sponsors are willing to pay.
For sports teams the sponsorship deal can be crucial. Deals are usually for a period of years, to enable the team to make long-term plans in terms of capital expenditure on facilities, acquisition of new players and so on -- this inevitably means that the money is budgeted for (if not actually spent) before it is received. And since the sums are so large, even big-brand corporate sponsors will finance them through bank loans rather than out of their own pockets.
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