1. COVID-19 just a short-term shock to Nike and adidas as sponsorship budgets will be held - Nike and adidas are the two of most significant spenders on sports sponsorship. Sports properties will therefore be nervous as to the effect of COVID-19 on both brands commitment to the marketing tool. - Despite the negating effect COVID-19 is having on sales for 2020, sponsorship budgets will likely be held. This is at least in the opinion of Carl Davies, who was appointed Managing Director at Perry Ellis International, the American apparel and fashion brand in January this year after serving as Managing Director at Mitre, the sportswear brand for ten-years. - Carl Davies told Sportcal: "Both Nike & Adidas are very clear on their short-term & medium-term strategy, COVID-19 is a short shock for them but one they see as coming out stronger from within 12 months." 2. COVID-19 to alter outlook of the kit supply market - COVID-19 will see an acceleration in the trend of more pay-for performance deals, which was marked by Nikes agreement with Liverpool. - Up to this point, demand to supply kit for clubs has enabled clubs to ask for more cash up front & bigger royalty cheques. After COVID-19 this will no longer be the case. - As brands reel from the economic effect of the pandemic, they will be forced to dictate the deal model to something more profitable for them. This will include a move away from big-up front cheques to more pay for performance contracts. 3. Fashion brands to re-evaluate sports sponsorship investment - For fashion brands, the mass appeal of sports, celebrity status of athletes and sports association with health and wellness provides new and effective marketing platforms to reach not only their target markets, but new audiences previously not exposed to them. - Despite this, sponsorships in sports will still on the most part be viewed as a luxury by themselves and investment will be re-evaluated. - Analysis by Sportcal of 2,394 active sponsorship deals by apparel brands in December 2019 returned 364 (15.2%) deals from brands in the fashion sector. These agreements returned an annual value of just under $250,000 million.
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