After examining different viable types of sponsorship and partnership in the previous pages of this blog, the time has come to focus more in-depth on the concept of technical sponsor.
Without ambitiously aspiring to taking an academic approach, technical sponsorship may be defined as the acquisition of marketing rights resulting when a goods manufacturing company or a service provider partners with a sports property (team, event or organization) and simultaneously sells its goods or services to such property as the property needs them for the performance of its core sports project.
As is evident from the definition, there are many elements at stake.
Let’s try to examine them
First of all, it is to be noted that a technical sponsor is a sponsor under all aspects, in other words it is a brand whose intent is to acquire marketing and communications rights with the purpose of winning an economic benefit, a ranking advantage, visibility, and so on and so forth. This aspect, which is common to all sponsorship types, is key and it is the main reason underlying any and all sponsorship agreements.
The second aspect is the provision of goods and services, which is consequential to and simultaneous with the sponsorship agreement. Technical sponsors use their products or services as an essential part of the sponsorship compensation. For instance. A clothing company manufacturing apparel for sports teams becomes the technical sponsor of a team as soon as – prior signing of a sponsorship agreement – they start providing the apparel that the players normally wear during matches.
This is the typical case of well-known sports apparel brands such as Nike, Adidas, Puma and Macron that are the technical sponsors of Juventus, Manchester United, Milan and Lazio. Other examples include D.I.D., the manufacturer of chains for the Ducati motorbikes racing in the MotoGP, Brembo, the supplier of brakes to the Ferrari Racing Team, or Wilson, the creator of the tennis rackets held by Roger Federer, just to mention a few more brands.
Having said this, we can now move on to make a distinction and give clarifications on the part of the definition reading “the property needs them for the performance of its core sports project”. The definition of “technical partner” is not applicable to all companies providing goods (or services) to sports teams or athletes. The discriminating factor is the provision of items that are utterly essential for exercising the sport in question. Brakes and tires are necessary to racers and riders, and similarly soccer players are required by the rules to wear a uniform in the same way as tennis players are to use a racket. On the other hand, it is very unlikely for a pasta or an oil producer, as well as for general contracting companies that provide hospitality facilities and offices, to be considered as technical partners.
Compensation, goods and services
Last, but not least, in the list is the compensation of this type of sponsorship agreement, which has not been mentioned yet so far. Traditionally, the compensation of a Main Sponsorship is almost essentially monetary. Things get a bit more complex when precious goods and services as those referenced above are at stake. It is pretty fair to say that, when it comes to technical sponsorships, each case should be examined individually, taking into account all the elements at stake. Sometimes, the agreement value is compensated by the mere amount of the supplied materials; in other cases, goods need to be supplemented by way of consideration. The deal between Nike and Manchester City is a recent example of this. In addition to providing all apparel for the players and the staff, the Swoosh brand will pay the English club the stunning amount of 45 million pounds per year. The US-based company was also involved in a one-billion-dollar deal concerning the supply of apparel to all the basketball teams playing in the NBA League. Huge amounts of money – some may say – but to whom is it a benefit?
Effectiveness and returns
Technical sponsorship is by far one of the most effective sponsorship types and the one with the most immediate returns. Without using metaphors, the hidden message behind sponsorship agreements is: “My products are so good that they are used by the best athletes in the world. So, it is reasonable that traditional consumers too should find them excellent”. Supporters are very attentive to and normally select the products that superstars wear on the pitches, especially if they practice the sport too. Additionally, they do not hesitate to purchase the same outfits as their favourites on the off chance that their performances are improved. This is why, for instance, it is quite common to see kids playing Sunday soccer matches with the same shoes as Messi or Ronaldo on, runners wearing the same eyewear as Mo Farah or tennis fans tightening their belts to show off the same Babolat Pure Aero gripped by Nadal.
An aspect is worth noting here, and this is where the great effectiveness of the sponsorship lies: it is not just a matter of being fashionable (although this is not a negligible factor), it is rather about a real transfer of values, which is clearly perceived by the user who immediately catches the innate qualities of the product.
Let’s talk about motorsport!
The world of motorsport once again offers the most efficient example, probably. Frequent and passionate (but, most of all, knowingly prudent) motorcycle riders are very well aware of how important high-quality, protective clothing is and they do not mind spending when it comes to buying a new back protector, an armour jacket, a helmet or gloves. Brands such as Dainese, Alpinestars, AGV and Arai (among many others, of course) have turned sports communications and sponsorship into their main marketing asset for the exact reason that there is nothing more inspiring than a helmet worn by MotoGP (or SuperBike) riders during their amazing performances.
If Valentino Rossi trusts AGV, why should Mr Smith not do the same to ride on his way home from work, after all?
Technical sponsorship has the potential to become an efficient tool and, at the same time, it can offer important results in terms of communication or commercial success (think about the number of Ronaldo replica jerseys Adidas will be selling up to 2027). But what is more important, especially if the sports property uses high volumes of materials, it can be a very cost-effective strategy for the supplying company, which will have the opportunity to partially pay for the amount signed in the technical sponsorship agreement with its own products, instead of money.
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