Here is a chicken and egg question:
Which came first – high professional athlete salaries, or the profits that allow teams to pay high professional athlete salaries?
The major American professional sports all have a collective bargaining agreement between the leagues and the players’ associations and unions, and in those CBAs it is stated that the players get a percentage of income generated by the sport. For instance, the NBA’s current CBA states that players get 44.74 percent of all basketball related income, with projected player benefits subtracted.
So the amount of money NBA teams make from basketball determines the amount of money NBA players can make under the salary cap.
In American professional sports, everybody is making money, lots of it. And every day, more money is being spent on professional sports by companies who want to get their name associated with the sport and the athletes who play it in the form of sponsorships.
Today, almost every moment of a sporting event is sponsored by some company or individual, and the teams get the millions of dollars that come from sponsorships. NBA Commissioner Adam Silver Wednesday said he was unopposed to company logos on uniforms, similar to what club soccer teams and NASCAR drivers display.
Approximately 45 percent of the sponsorship money goes to the players, eventually, when salary cap levels are determined every year.
So if the sponsors went away, and the NBA teams made less money, would player salaries go down?
It’s something to ponder as IEG, the world’s leading sponsorship advising company, prepares to host its 31st annual conference in Chicago March 23-26. Titled New Intents, Technologies and Applications Transforming Partnerships, the conference brings together the brightest minds and busiest companies involved in sports (and other forms of) sponsorships.
There are dozens of speakers lined up for the event, including Tom Rickets, the owner of the Chicago Cubs, as well as representatives from the San Francisco 49ers, FC Barcelona, and USA Gymnastics, Swimming and Track and Field. Major sports sponsors such as AT&T, Red Bull, Coca-Cola, Bank of America, and TD Ameritrade will have representatives speaking.
There are seminars on Uncovering Fan Emotion (good luck with that one), the Secrets of Sponsor Retention (better free seats), Using Social Media and Technologies, and Maximizing the Value of Sponsorships.
To get to the seminars, conference attendees have to run the gamut of exhibits and exhibitors, where properties get to attempt to attract sponsors to invest in their events. Basically, these properties are helping to sponsor the sponsorship event, without getting title sponsorship rights.
Then there is networking, and what conference worth its salt does not include networking? This is where sponsors break into smaller groups to discuss the sponsorship issues inherent in sponsoring sports events, charities, entertainment and other types of events.
Attendees also have the opportunity to sign on to the event’s Dashboard, which includes all of the contact information of all the attendees and the speakers and exhibitors and how much is that information worth? Is the Dashboard sponsored?
There is also an evening spent by attendees at Chicago’s Field Museum of Natural History, a building that does not yet have a title sponsor, thank goodness.
I have been invited to attend the conference, but I think it would be a dizzying experience, with hundreds of companies trying to figure out the best way to get their brand noticed at sporting events where everything is branded.
The question I would ask everyone in attendance is “How do you know your sponsorship is translating into revenue?”
Then I would say “Prove it.”