A business that everyone can benefit from. How sports sponsorship is growing

Although the economic situation of many companies sometimes forces them to tighten their belts and limit expenses, observation of Polish sport shows that the most famous representatives of sports cannot complain about the lack of business support. When looking through the names of basketball or football clubs, we rarely come across a team name without the company name in front of it. Companies want to sponsor sports because they see tangible benefits from it.

Record sponsorship of sports on the Vistula River

2022 was a record year for Polish sport. It’s not about the results of athletes or clubs themselves, but about the financial outlays that companies have spent on sponsoring. According to data from Sponsoring Insight, quoted by parkiet.com, PLN 1.22 billion was spent for this purpose. Compared to 2021, which has also been unprecedented so far, there was an increase in spending by 3%. Yet it is still worth remembering that three years ago the whole world was feeling the economic effects of the coronavirus pandemic. According to experts’ predictions, there are many indications that in a few months, when the data from this year will be analyzed, we will see another historic result.

The three disciplines that dominate in terms of raising money from sports sponsorship are football, volleyball and motorsport. Despite mixed opinions about the level of Polish football, the World Cup and the performance of the Polish national team were a great incentive for sponsors to allocate funds for advertising. On a global scale, we are talking about a leading discipline, and the Polish team boasts Robert Lewandowski – one of the best football players in the world.

The success of volleyball in 2022 was due to the volleyball players who, under the leadership of coach Nikola Grbic, won bronze in the Nations League, as well as the runner-up position in the world – at a tournament co-organized by Poland. It can be suspected that after this year’s successes – gold medals in the Nations League and the Men’s European Championships, and both of our teams qualifying for next year’s Olympic Games in Paris – the volleyball result will be even better.

In the case of motorsport, it is worth mentioning annual events such as the Dakar Rally or the Formula 1 World Championship and Speedway Grand Prix, which attract the attention of thousands of Poles.

The greatest of the greatest

In terms of the sectors investing the most in sports in Poland, the dominance of the fuel and energy industry is still visible. Companies such as Orlen, Energa (currently Orlen Group), Enea, PGE and Tauron spend a lot of money on this purpose. Orlen itself, thanks to the takeover of Lotos, the above-mentioned Energia, and PGNiG, has settled into the leadership position for good and can once again call itself “the largest sponsor of Polish sport and culture”.

From the current season, the competition of the best basketball players in the country is called Orlen Basket Liga. In turn, the best handball players have been competing in the Orlen Superliga for several months. This can also include the appearance of an extremely popular team of footballers on the training shirts of Lotos, as well as on the suits of ski jumpers, who guarantee to attract millions of viewers every winter.

The 20 largest sports sponsors also include representatives of games of chance and the so-called bookmakers (Lotto, Fortuna, STS) and manufacturers of clothing, footwear and sports accessories, such as Nike and 4F. While the presence of the second company mentioned, belonging to the Polish company OTCF, is perhaps not surprising, the presence of the giant from Oregon can only prove how important Poland is as a market.

Greater relief for sponsors

An important measure that increased the scope of sponsorship activities among smaller enterprises was the introduction of relief from 2022 for those supporting sports, culture and education under the Polish Order. Under it, companies that incur operating expenses in the sectors listed above can deduct from their income not 100 but 150 percent of the costs incurred. The maximum limit is the amount of income earned during the tax year.

The relief, which ultimately has a significant impact on the amount of tax, was addressed to both PIT and CIT taxpayers. This means that the deduction is 150%. A person running a sole proprietorship can also afford the costs of sponsorship. Although large sums of money are rarely involved in such cases, an individual club or athlete will certainly be satisfied with the support received, and a micro-entrepreneur will feel relieved when settling taxable income. The Ministry of Finance distinguishes three possibilities of sports sponsorship – financing a sports club, a sports scholarship, and a sports event.

Polish footballers are on top

We have already mentioned that football in Poland raises the most money among all disciplines. To prove that despite the questionable sports level of the national team or PKO Ekstraklasa clubs, football is “profitable” for entrepreneurs, it is worth paying attention to the analysis conducted by PSMM Monitoring & More and Publicon Sport. It shows that in the period from March to November 2022, the total advertising equivalent of all sponsors of the Polish national football team (led by Czesław Michniewicz at that time) amounted to as much as PLN 612 million.

Moreover, the number of media exposures amounted to almost 38,000, which was mainly influenced by the television broadcaster of the White-Red matches – Telewizja Polska. The given numbers prove that even image problems and mixed sports results do not affect the power of football in a country where (theoretically) football players cannot compare in terms of achievements with volleyball players or athletes.

However, the above example applies to the entire team. This means that the result included, for example, Robert Lewandowski, Arkadiusz Milik, Matty Cash and Czesław Michniewicz. What if the gigantic equivalent for the Polish sponsor is provided by one athlete? In the case of PZU, we are talking about the best tennis player in the world, Iga Świątek. The player, who has been dominating on the most famous courts in recent years, earned as much as PLN 115 million in advertising equivalent for a large insurance company in 2022. In 2021, the amount was PLN 42 million, which only shows how much progress we are talking about and how the athlete’s successes also translate into benefits for the sponsor.

In addition to the athlete’s appearance in PZU’s spots and promotional campaigns, the company’s logo can be found on the outfits worn by the leader of the ranking. It is worth adding that in tennis the space for advertising is very small and subject to specific restrictions. This means that each logo stands out in a clean space, especially when we are talking about a sports star, which Świątek undoubtedly is.

The double-edged sword of great sponsorship

Although the amounts spent on sponsorship on the Vistula River are increasing, compared to the rest of the world, we still have a lot to catch up on. According to the Industry Stats Report, the sports sponsorship market in the world was worth USD 57 billion in 2020, and according to forecasts, in 2027 it will be worth USD 89.6 billion.

Sometimes the big numbers and amounts spent on sponsorships can become too overwhelming for businesses. In 2021, the German company TeamViewer signed a colossal sponsorship deal with the Manchester United football club. Thanks to it, the company was featured on the front of match shirts of one of the most famous teams in the world. According to media reports, the contract was for five years and as much as £235 million that the German software manufacturer would pay the team.

He paid part of it, but in December 2022 he was forced to renegotiate the terms. The drop in share prices on the stock exchange forced her to tighten her belt. Initially, it was announced that another sponsor would be sought for the front of the shirts, but ultimately in the 2023/2024 season the company’s logo will still appear on the shirts. However, it makes you think that spending huge funds (especially in the event of sudden events on the stock exchange) may not always be beneficial.

Sponsorship is a business

Sponsorship (regardless of whether we are talking about sports or cultural sponsorship) is an important element for both enterprises and beneficiaries, although in this case it is better to refer to both parties as contractors or partners. This is because no one here gives anything for free. Theoretically, it may seem that the company is losing money because it pays money (something tangible) and receives promotion (something intangible). Clubs and sports institutions must work hard to, firstly, earn a contract, e.g. through sports results or skillful marketing, and, secondly, to give companies what they expect – exposure.

There is still room for investing in sports sponsorship in Poland. Logically, most of the talk will be about the largest enterprises that invest tens of millions of zlotys, but we should not forget that every small contribution is also valuable because it contributes to the development of this industry. There is no shortage of companies and individuals on the Vistula River who see sports sponsorship as a benefit, not a bottomless pit.