What Are You Really Worth?

Sponsorship Value

 

Ultimately, rights-holders and sponsors want successful, meaningful partnerships.  But rights-holders also want money, while sponsors want value and results.  Finding the sweet spot between these equal and opposite demands is crucial in cultivating and maintaining that successful partnership.

We have written previously about the importance of conducting accurate and detailed sponsorship valuations.  We will build on that today by reviewing the importance of a valuation as it relates to a property, event, or brand’s worth as a rights-holder.

In 2019 more than ever before, sponsors are talking about – and demanding – measurement and proof of performance in order to determine ROI.  We suspect this focus will continue throughout the year, forcing rights-holders and sponsors, alike, to spend more time and resources on measurement.  In order to do this, however, there must be a baseline valuation in place to understand not only the original, agreed-upon value of the sponsorship, but also the worth of the rights-holder and its assets.

 

Value & Worth

According to Chris Baylis at The Sponsorship Collective, “your property’s value is as unique as your fingerprint. It is something you create…based on your unique situation, mix of assets, brand value and audience segments.”  I agree with this but would like to take it one step farther.  Value is not only unique to the property; it is also unique to – and varies by – a property’s sponsor.  Said differently, a property’s worth according to one sponsor, based on a set of assets and other benefits, might be different than its worth according to another sponsor who is only interested in a subset of those assets.  Taken as a whole, a property’s worth is fixed based on the results of a full and comprehensive valuation; however, it is highly unlikely that any given sponsor is going to be interested in – and subsequently adopt – every single asset and opportunity for alignment with a given rights-holder.  As such, your worth as a rights-holder is unique to you but also unique to the sponsor.

 

Sponsorship Value

 

Where does this leave us?  Valuations are critical and can be done as a survey of all assets at any time; however, the most useful and significant valuations are those specific to sponsorship packages – not only because the value and worth of a property is in the eye of the beholder, but also because these very specific packages serve as a reference and baseline for measurement following a sponsorship term.  As a rights-holder, you dictate your worth at the onset, but that worth can only be upheld if results are produced and sponsors are satisfied.

Moreover, in addition to the valuated assets, a property’s worth, in our opinion, is naturally strengthened by conducting and maintaining valuations.  Across the country, rights-holders are “estimating” fees and either under- or over-selling their assets to sponsors.  This approach is both imprecise and unsustainable.  By telling current and prospective sponsors that a true and accurate valuation has been conducted on all relevant assets, you reinforce your worth in a way that un-valuated rights-holders cannot.

 

Finding Your Fit

Let’s turn to PIER 39 in San Francisco as an example.  PIER 39 has conducted a series of valuations, both across its portfolio of assets and also specific to sponsor packages and proposals.  One set of assets includes signage throughout the property, some of which is located by the world famous sea lions.  While PIER 39 may have an understanding of its worth based on the valuation results and other research, a brand with specific ties to marine life or sea lions, in particular, might find signage opportunities at this location more valuable, thereby increasing PIER 39’s worth as a rights-holder in the eye of that sponsor.  Furthermore, during the measurement and proof of performance evaluation, the results of a sponsor’s alignment and visibility by the sea lions will be checked against the original objectives and promises made – based on the valuation.

Another property with noting, also from the Bay Area, is the San Francisco 49ers NFL team.  Like all professional sports teams, the 49ers have a history of supporting non-profit and philanthropic causes in their community.  They also have a history of securing high-profile sponsorships, especially since the opening of Levi’s Stadium in 2014.  Although we have not worked with the 49ers and cannot speak to their valuation efforts, it is our assumption that a full valuation was conducted on their assets prior to pitching and securing sponsors.  Following this valuation, a designated value was likely assigned to specific sponsorship packages and individual assets.  In addition to the monetary values produced by the valuation, the 49ers’ philanthropic efforts undeniably added additional appeal – and worth – in the eyes of certain prospective sponsors.

For example, Chevron has just renewed its partnership with the 49ers and the 49ers Foundation for an additional three years.  In addition to naming rights of the Chevron STEMZONE at Levi’s Stadium, Chevron also teams up with the 49ers to provide unique STEM programming to Bay Area youth.  According to www.49ers.com, this partnership has served over 210,000 children and educators since its inception, with nearly 60% coming from Title I designated schools.

 

Sponsorship Value

Source: Super Bowl 50 Host Committee

 

This example is particularly relevant because the specific focus on STEM programming for children struck a chord for Chevron that might have been less applicable for another partner.  In looking at a valuation, the total value projected might not include the additional, deeper value that is generated from a cross promotional, philanthropic partnership that checks the boxes for both rights-holder and sponsor.   In looking at the worth of the rights-holder, it is imperative that sponsorship sales professionals and marketing professionals from the sponsor understand how numbers only go so far.  Additional value – and worth – are generated by finding and creating meaningful programming that yields extra visibility and good will simultaneously.

Subscribe to our blog

Receive emails when a new blog post comes out. You can unsubscribe at any time.

Subscribe