Some of the world’s biggest sponsors are cutting back on deals, although none of those contacted by the Financial Times said they were looking to terminate commitments. However, the economic outlook is prompting nervousness among rights owners who are trying to negotiate longer term deals with clients as a way of building in greater funding security to offset expected declines in sponsorship revenues.

Rights holders are gearing up for life without clients from the stricken banking and car sectors and trying to squeeze out more sponsorship dollars from others. “There is a great deal of inventory available and as in any downturn there will be a flight to quality,” said Phil Carling of Octagon, the global marketing company. “It’s a bit more of a buyers’ market,” said Keith Levy, vice-president of marketing at Anheuser-Busch and responsible for the beer company’s US sponsorship deals in baseball, basketball and American football.

According to Sports Marketing Surveys, the car and banking sectors were the leading industries of sports sponsorship, which was responsible for 79 per cent of all sponsorship last year. Between them, they signed off 253 of the 713 reported deals last year.

British Airways, a London 2012 Olympics sponsor, said it had always attracted interest from rights holders. “But increasingly so, we have noticed that third parties are looking to work with us more and more,” said Luisa Fernandez, global sponsorship manager. Calls are coming in daily to the Emirates Airlines, which sponsors football, rugby and cricket tournaments and teams. “They used to come but not at this frequency,” said Boutros Boutros, of Emirates. “We went after most of our properties but now they are coming to us.”

IEG, a sponsorship advisory arm of the advertising group WPP, expects sponsorship spending by North American companies to increase by only 3.2 per cent, following three years of double-digit growth. Globally, it will rise 3.9 per cent to $44.8bn, IEG believes.

BT, official sponsor of the London 2012 Olympics, said of the sponsorship climate that “clearly in worsening economic times, some change is inevitable”, and would be partly driven by upcoming sponsorship opportunities. “For companies like BT, this can be an appropriate time to negotiate new long-term deals cost-effectively,” BT said. Last month, it announced a four-year deal to sponsor the Paralympic World Cup. 

Germany-based rivals Adidas and Puma are not cutting back. Adidas has said it aims to spend about 13 per cent of its net revenues each year on marketing, spending €1.2bn ($1.5bn) last year. Puma spends about 15 per cent on marketing. AIG, the bailed-out US insurer, will not renew its shirt sponsorship of Manchester United while Hyundai has taken up advertising spots for the Oscars that were abandoned by General Motors.

Nortel’s financial woes threaten the telecommunications group’s sponsorship of next year’s Winter Olympics in Vancouver and the London 2012 Olympics. Its restructuring after seeking bankruptcy protection last month “does involve us taking a hard look at our sponsorships and, in some cases, decide to no longer invest in certain programmes as a sponsor”, said Nortel. But its Olympic commitments remained unchanged, it added.

Several companies made it clear they were sticking to their guns. Tsingtao said its main long-term sponsorship, with US basketball, was “not really affected by the financial crisis. It is going well”. Itau, the Brazilian bank, which spends $15m a year on the national football team, concluded that its merger plans with Unibanco meant it made sense to continue the marketing programme. The next two to three months will see fewer sponsorship announcements and activity, according to Karen Earl, chairman of the European Sponsorship Association. “People genuinely don’t quite know how things are going to pan out,” she said. www.ft.com