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The Financial Implications of Restarting the NBA Amid COVID-19

Against all odds, sports are back! Mid-pandemic, the NBA will restart their season today, Thursday, July 30th, with a doubleheader: Jazz v. Pelicans and the Clippers v. Lakers. But, with all the new regulations, players opting out of the season, and the potential for players to get sick, what does this mean for sponsorship? And how will brands quantify their ROI, given this new system? Let’s break it down.

Difficulties

In assessing sponsorship opportunities, brands want to know all of the various avenues of revenue from a property. This means they’re looking at a property’s audience, who their players are, and how big those players’ audiences are, as well as city size, brand recognition, and how good the team is. All of these factors are difficult enough to quantify on their own, but what happens when you throw in a global pandemic?

Chaos. On top of the normal factors brands use to assess sponsorships, brands now need to take into account:

  • Players falling ill from COVID-19
  • Star players opting out of the season entirely
  • No physical fans being allowed in or around the stadium
  • A shorter season

All of these components make it impossible for brands to assess the success of a sponsorship by comparing it to previous seasons. In fact, the only way to really assess the success of these campaigns is through bottom-of-funnel marketing metrics, also known as sponsorship attribution. Sponsorship attribution allows brands and rights holders to attribute sales to a specific sponsorship campaign, regardless of whether or not those sales occurred online or offline. Especially for a brand that does not sell online (QSR, automotive, etc.), it will be imperative for brands to accurately attribute offline sales to a specific sponsorship campaign. Without it, brands sponsoring sports teams will largely be shooting in the dark.

Benefits

While we can confidently say COVID-19 has been detrimental for sports as we knew them, what are the ways it’s giving us more information about the sports sponsorship industry?
Or better yet, let’s tackle an example: The Lakers are set to play next week, but (in this hypothetical) LeBron James has come down with COVID-19 right before the beginning of the season—he’s out for the foreseeable future. Is the McDonald’s sponsorship still worth what it was worth before, given that James isn’t playing? And, while a morbid example, if he were to pass from COVID-19, what would the property be valued at then? In the event that star players cannot or will not play for their teams, brands will be able to better assess the true value of their sponsorship for any property.

What Does This Mean For Brands?

During COVID-19, it’s even more difficult for brands to discern the true value of their sponsorships. With bottom-of-funnel sponsorship metrics, brands can take the opportunity to rethink their sponsorships and discover what’s actually providing a return on their investment. To learn more about bottom-of-funnel metrics and sponsorship attribution, click the link here.

 

How Can FanAI Help?

To learn more about sponsorship attribution in the time of COVID-19, reach out to Info@Fan.AI

 

About FanAI

FanAI is the first sponsorship data platform to connect audience data to real purchase outcomes. Through a combination of fan data and purchase, social, and streaming data, FanAI’s technology improves sponsorship and digital media impact across the sports & entertainment industries. Having access to bottom-of-funnel sponsorship metrics enables brands to make more informed and strategic decisions for their marketing spend which further enables them to engage with the right customers at the right time. FanAI works with brands, agencies, and rights-holders and has raised over $12 million in funding, with a recent series A round led by Japanese conglomerate Marubeni Corporation.