Sports sponsorships have, in most cases, remained the same since their inception. Typically, a brand would pay an agreed-upon fee to a team, league, or competition for varying levels of brand exposure. This exposure can come in many different forms such as in-game activations, in-stadium signage, or even digital activations across a team or organization’s social media. The opportunities are endless, but the payment procedures are not, until now.
Anheuser-Busch, a brand known for its sports sponsorship, is flipping the typical model on its head. As a part of their standard partnership agreements, ABI (Anheuser-Busch InBev) is now including performance-based incentive clauses. Some of these clauses will be upward of 30 percent bonuses for matching or surpassing certain expectations. These KPI’s will vary by team, many of whom will have the choice of incentives that they’d like hit.
“The traditional sponsorship model, based on fees and media commitments, does not deliver the best value for us at a time when most leagues and teams are facing challenges with live attendance and TV ratings… We want to evolve the model and encourage fan engagement… with an awareness that each deal is unique.” – Joao Chueiri ABI VP of Consumer Connections
And evolving they are. Since unveiling this incentive based model, there have been a few properties that have decided to take this challenge on. Those being NASCAR who has settled on fan engagement and social media measurements while the Los Angeles Dodgers have chosen to take on on-field KPI’s like wins and losses.
Indeed, this model of partnership agreement is new, but it will be interesting to see how teams and organizations meet these incentives, but more so how this new model of sports partnership may spark radical change across the sports sponsorship landscape.