Honda's withdrawal from Formula One competition is the latest episode in the saga of how the financial crisis is damaging sports.
Does sport without sponsorship mean the ruin of sports business? The financial crisis is hitting companies hard and they are now shifting their sponsoring strategies. Honda is just another in a long line of financial-crisis-related sports casualties.
In November, General Motors dropped their seven-million-dollar per year contract with star golfer Tiger Woods. Golf sees its development threatened by the economic slowdown. Two important tournaments, the European Tour and Golf in Dubai have failed to find sponsorship to date.
NASCAR, merge to resist
Football is also affected. English clubs West Ham and West Bromwich Albion are sponsor-hunting. Insurance giant American International Group (AIG), which sponsors premiership giant Manchester United, says it is reviewing “all of (its) deals to focus on the essential ones”.
NASCAR, the popular US stock-car races, have also suffered fund slashes. General Motors is no longer a partner of the circuit, and two of the main teams had to merge to survive.
In the US, finance companies have always been active in sponsoring. William Chipps, a journalist for IEG Sponsorship reports explains “these companies struggle for survival and these partnerships are far from topping their priorities.”
Even the London 2012 Olympics is having a hard time getting sponsorship.
A two-level sponsorship
Wayne DeSabro, president of a research center on sports business in Pennsylvania, explains: “Big sports stars will keep earning lots of money from sponsors. Those that are less-known are more likely to suffer.”
Indeed, the crisis didn’t impede football star Thierry Henry or tennis giant Roger Federer from snagging their latest contract with shaving specialist Gillette. In the end, however, a wider gap between rich and poor sportsmen is what may well be in store.
Date created : 2008-12-05