HSBC ending its deal with British Cycling should be a warning to potential sports sponsors, says Conrad Wiacek, head of analysis and consulting at Sportcal…
The sports sponsorship industry should be taking note of HSBC’s decision to end its deal with British Cycling four years into an eight-year stretch. While many will cite recent scandals involving allegations of bullying, sexism and doping as reasons to terminate the deal – worth a reported £2.5 million ($3.2 million) per year – HSBC has decided to walk away from the sport in an Olympic year, a decision that would not have been made impulsively.
Most brands will have clear objectives when entering any partnership that they hope their sponsorship will help them achieve. Despite the growth in cycling’s popularity in the UK in recent years, thanks to the dominance of the British Olympic team and the likes of Team Sky, HSBC have taken the decision to walk away from the sport because they will have felt that the partnership was no longer able to fulfil those objectives.
While British Cycling will feel confident in replacing HSBC, it should be a cause of concern for the sport that two significant backers of cycling in HSBC and Sky have both walked away from the sport in recent times. With this deal forming only a part of HSBC’s estimated $30m+ global sponsorship portfolio, according to GlobalData’s Sportcal, other rights holders could be nervous about losing a significant source of revenue.
The tendency will be to look at recent scandals and surmise that these would have been the deciding factors, but we have seen a movement towards greater accountability in terms of sponsorships in sport, with brands wanting to clearly see a return on investment (ROI). It should be seen as a wakeup call to all rights holders, that being able to clearly deliver on the objectives of the partnership will be more and more crucial if they are looking to retain high-profile sponsors. With more data available to analyse the impact of sport partnerships than ever before, rights holders will increasingly need to offer tangible benefits in order to attract top tier brand partners.