League sponsors content to let games limp onLast time I checked, none of the nine baseball teams in Korea, including the Samsung Lions, were making a profit. That’s unlikely to change in the foreseeable future, so why do companies keep mindlessly sponsoring losing entities?
“It’s better than soccer, ssireum (Korean wrestling) or any other professional sport here,” one company representative said. As a baseball fan, that’s good to hear, but what followed was a friendly reminder of how no professional sports league means anything to its sponsors here. “There hasn’t been a single year in which someone up the ladder has talked about pulling their sponsorship.”
One might think that Korean companies are hesitant to actively promote sporting events, though there are plenty of cases otherwise. Unfortunately, all the cases are overseas. One example is LG Electronics, which for years has sponsored the Sao Paulo Football Club, in the Brazilian league. The company’s market share in Brazil has been steadily increasing.
Another good example is the tire industry, which for years has aggressively sponsored racing events abroad. Kumho Tires, for instance, is the official sponsor of the 2006 Club Racing National Season event in the United States.
More recently, Samsung Electronics began sponsoring the English premier league team Chelsea, in the biggest club sponsorship deal in the league’s history. The team signed a five-year contract with Samsung worth 50 million pounds, or $88 million (by comparison, Manchester United signed a deal with Vodafone for 36 million pounds).
Korean companies are sponsoring more events than ever and gaining publicity in places they would otherwise be ignored. After all, there are still lots of places in the world where the word Samsung doesn’t necessarily ring a bell.
So why do they view domestic sports sponsorships as a lost cause? The market logic works differently here. Most of the companies sponsoring, or more often owning, sports teams are already well-known conglomerates. There’s no need for them to spend big bucks to raise their company profiles. Marketing budgets for sponsored teams are slashed as low as possible because CEOs see no reason to pay for something they already have. The only marketing tools left are the occasional title sponsorship and handing out team uniforms to fans.
But there’s an obvious way for companies to measure the value of their domestic sponsorships: Quantifying the return, by grading the exposure a company’s logo gets during broadcast games and comparing that exposure with the cost of buying and producing a commercial aired during the game.
But that’s not all that needs to be done.
Now that Korea has a five-day workweek, people have more free time. It might be a good idea for the companies to sponsor amateur teams and develop grass-roots sports leagues, through which the professional teams could gain access to otherwise hidden talent. Sponsoring fitness programs that promote a healthy lifestyle could also reach out to consumers. And of course, all these could in turn be linked to the company’s professional team. The problem is that these approaches require a long-term approach that won’t immediately provide any dividends.
Can it happen? Not unless CEOs radically change their mindsets.
by Brian Lee