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Stellar Partnerships

Imploding sports sponsorships: 3 lessons

There is something very interesting going on in sports sponsorships this year. Unless you’ve banned yourself from all media in Australia, you would have heard about Hancock Prospecting pulling its funding of Netball Australia. Donnel Wallam expressed her concern about wearing a uniform with the Hancock Prospecting logo. Why? Because of comments made by Gina Rinehart’s father in the 80’s. Comments that Gina has not denounced. Prior to that, stars from Cricket Australia and AFL were also protesting their code’s lucrative sponsorships with energy and mining companies.

Then there has been the FIFA World Cup in Qatar.  It’s proving to be the most expensive and disastrous branding exercise for Qatar and some of the sponsors such as Budweiser. The BBC ignored the opening ceremony and instead chose to talk about the controversy surrounding Qatar 2022. So far there have been protests from players from many different countries about FIFA’s ban on the One Love Armbands.  Then players from Iran stayed silent during their national anthem, even though there was great personal risk to them and their families. This was a sign of support for the protests across Iran due to the death in custody of Mahsa Amini.

Yikes! Are sports sponsorships turning into a nightmare for corporates? There are 3 things driving change in sports sponsorships, which partners and sponsors can’t afford to ignore.

Gen Z and Millennials in the driving seat

A sports team’s greatest assets are its players. Without having the very best players, a team can’t expect to be a consistent star performer. These assets are mostly Gen Z and Millennials and aren’t afraid to speak their minds. In fact, these generations are the most likely to protest and make purchasing and employment decisions based on a company’s sustainability reputation. They are tired of inaction and will make their voices heard through activism, social media, and buying decisions. They also now account for 49% of the global population and are driving the growth behind ESG. They’ve had enough. Sports players and teams are predominantly from these two generations. I’m not surprised by the level of protest we’re seeing in sports.

This should be a huge warning signal to all companies. By 2025 75% of the global workforce will be made up of these generations. Don’t expect them to stay quiet within their role if they’re not happy about what you’re doing as a business.

Commitment, action and authenticity

Sports-washing, brand-washing, rainbow-washing and green-washing are being called out. Corporate sponsors and advertisers are being held accountable. We live in a connected world where many don’t rely on, or trust, mainstream media to bring attention to the poor actions of a company. People can use social media channels to instantly share their thoughts and opinions about the performance and behaviour of a business. Authenticity counts.

Savvy not-for-profits have robust risk management frameworks to clarify who they will and won’t partner with. Perhaps sports need a similar ethical framework, or they won’t continue attracting talent. The cheap (or ultimately expensive) sponsorship cheque could have disastrous results if it’s not backed up by authentic action. That’s why sports sponsorship is so tricky at the moment. A logo on a shirt isn’t seen as authentic action. It’s washing. So what do people want to see instead? Real commitments that align with a business’s strategy, their target markets and the key issues its stakeholders are facing. Then all of society benefits from what they do. Businesses have the opportunity, through community partnerships, to make a real difference to society’s biggest issues. Many of them are stepping up and if others don’t get to action soon it will be as deadly to them as not investing in innovation.

Diversity matters

Players in sporting teams are younger and more diverse than the executives who sit at the top of organisations making decisions. So are its supporters. That’s why there has been such an outcry at the decision to hold the tournament in Qatar. FIFA has also faced significant pressure with complaints of how compromised and prejudiced it is. The complaints have fallen on completely deaf ears.  The top officials are not listening.

We know the breadth of diversity narrowest at the top of an organisation and it gets broader the nearer you get to front-line workers. Is the top of an organisation representative of society in (almost) 2023? Hell no! ESG requirements are forcing companies to be transparent with their commitments to diversity. Those that are embracing diversity targets are already reaping the benefits. They are listening to and tapping into a broader selection of talent and opinions. With the gender pay gap and the indigenous ‘close the gap’ still being great chasms, we are very far away from business leaders representing actual society. Look out – the next generations are watching and if sport is anything to go by, they won’t be quiet in their complaints.

Businesses of all sizes are facing huge pressures. However, if they continue to focus on the money and the profits, whilst ignoring the needs, desires and values of the younger generations they will struggle to survive. Like in sports, the best talent wants to play in the best teams. But the next generations are setting different standards around what best practice looks like. Seeing these younger players’ protests gives me great hope for the kind of world that my child will inherit. Good on them for applying their values and calling out those that are no longer fit for our modern world.