How AC Milan, Nissan, F1 and the Jockey Club are integrating purpose into their sponsorships

Purpose has made its way into sports industry discourse in recent times and there is a growing belief that it is genuinely good for business, rather than just the latest shiny buzzword.

The pandemic shone a light on some of the deep-rooted inequalities in society and sports organisations have been looking inward to ensure that their purpose reflects the expectations of fans who are more than willing to ditch brands whose values don’t align with their own.

Sport has provided a platform to amplify messaging around social issues such as racial inequality, climate change and female empowerment, as well as other worthy causes that are close to both athletes and supporters. But now organisations and their partners are also exploring how they can express their values through their marketing activity.

Indeed, agencies are even setting up divisions dedicated to helping sports organisations and sponsors integrate purpose into their commercial agreements. The latest of those was established last week by JTA, which found in an industry survey that 96 per cent of respondents believe partnerships between brands, athletes and sports organisations will become more purposeful, innovative and fluid in the future.

To that end, it has been no surprise to see an uplift in sports properties and brands putting purpose at the heart of their partnerships, using sponsorship activations to demonstrate how they are attempting to better society. But choosing who to partner with, what initiatives to support, and doing so in a credible way is easier said than done.

Fortunately that was the topic of a session at SportsPro Live in London, where speakers from Italian soccer champions AC Milan, the Formula One motorsport series, carmaker Nissan and The Jockey Club were on hand to discuss the nuts and bolts of embedding purpose into sport.

Purpose-led messaging is only credible if it reflects internal values

There’s no point making noise about purpose externally if those values haven’t been clearly defined within the organisation. But that doesn’t mean values can’t evolve over time in response to changes happening in society.

That was the point made by Carey Weeks, the director of partnerships for The Jockey Club, who said that the horse racing business has reassessed its values over the last two years and taken a “bottom-up approach” across the organisation, running workshops to understand what matters to employees at the company.

She also revealed that The Jockey Club has an employee app to monitor what the feeling is within the organisation, as well as how the business is measuring up against its values.

Zarah Al-Kudcy, who is head of partnerships and development at Formula One, also stressed that sports properties and brands should only get involved in societal conversations if their values and structures internally reflect the message they want to communicate to fans and consumers.

That not only means formulating a purpose that is clearly defined, but also having a diverse workforce that can bring different perspectives to drive the business forward.

“I think it’s important that the whole business has diversity of thought, as well as gender and ethnic diversity,” she said. “To make the output changes, you’ve got to have diversity on the input.”

Purpose helps drive commercial conversations

One commonly held misconception is that purpose and profit are mutually exclusive from one another, but there is a sense that view is starting to change.

In March, for example, the Women’s Tennis Association (WTA) secured a lucrative new title sponsorship deal with medical device firm Hologic, which described the tour’s handling of the Peng Shuai affair in China as “a catalyst to the conversation” about a partnership.

Rather than having values that are dictated by commercial objectives, James Murray, chief of staff for the chief executive at AC Milan, said the Serie A club’s purpose actually drives the commercial reality of the business and offers brands a compelling sponsorship proposition.

“If you talk about being a values or a purpose-driven organisation and the way that you talk about your values and your purpose is not integrated into your commercial conversations then that’s pretty inconsistent,” he said.

Contractual language will come but measuring success isn’t easy

As communicating values externally becomes more important to both rights holders and their sponsors, it won’t be long before there are specific purpose-related objectives being written into commercial contracts.

That was the opinion of Owen Hughes, the global head of sponsorship at Nissan, whose involvement in Formula E has helped drive awareness of its electric vehicles, while the company also has deals with the likes of Manchester City.

“I think as we potentially do new deals or renew things there may be language that reflects [purpose] specific targets to hold ourselves to,” he said. “I think it will actually take some time and it should come up front. That’s part of the objective assessment for me: you need to be clear about what your goals are in purpose, sustainability, whatever it might be, as part of that initial discussion.”

However, he also acknowledged that measuring success around purpose-related goals isn’t as straightforward as attributing a dollar figure to a particular initiative. Instead, he said it comes down to “softer measurements”, such as monitoring brand affinity and engagement around specific campaigns, while other examples could include the number of people involved in an education initiative or helped through a fundraising partnership.

Due diligence is key as rights holders become more risk averse

You would be hard pressed to find a sponsorship announcement where the two partners don’t reference their ‘aligned values’ as a deciding factor in getting the deal over the line. That may have become the lingua franca of the corporate comms world to mask what might be a quick cash grab, but it is increasingly important for sports properties to carry out the necessary research before accepting a cheque from a sponsor.

There have been several recent examples where partnerships have gone sour because a rights holder has failed to properly audit a company, and Murray believes there is more due diligence being done on both sides of the table to avoid potentially being exposed further down the line.

“What we’ve seen over the last few years is rights holders are becoming more and more risk averse,” he said.

Al-Kudcy was in agreement, stating that “we’re not doing our jobs right” if conversations around values aren’t happening until the contract stage of negotiations.

She pointed to the motorsport series’ recent partnership with Salesforce as an example, noting that understanding the software firm’s business enabled Formula One to realise how the company could help it gain better insights into its fanbase and also contribute to its sustainability goals.

Crypto partnerships can have purpose, too

Due diligence is perhaps most significant at present when entering partnerships with brands from the emerging cryptocurrency sector, where companies have been paying huge sums to associate their brands with major properties across multiple sports. 

While a number of rights holders have been keen to cash in on a rich new source of income, the likes of Manchester City and FC Barcelona have already become high-profile examples of where partnerships in the crypto space have ended prematurely due to legitimacy concerns.

Critics have also questioned whether sports properties are putting profit before purpose in promoting brands from a sector that is highly volatile and still lacks regulation. 

Murray, however, believes that a crypto partnership can still be purpose-led if proper research has been carried out. He pointed to AC Milan’s sleeve deal with BitMex, which activated its partnership with the club by donating the proceeds from the team’s first-ever non-fungible token (NFT) drop to charity.

“I think putting a blanket over all companies within certain industries and implying that they are in some way morally suspicious is perhaps a little bit over-simplistic,” he said. 

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