Sponsorship vs. Partnership - Is There a difference?

January 11, 2019

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In sports business you will often hear the terms sponsorship and partnership used interchangeably. Some teams tout their sponsorships and others refer to the partnerships they have in place. Is there really a difference? Which of these do you see more often? Let’s take a closer look at these two words and determine if they can be used interchangeably or not by starting with a simple definition to better understand each term.

Sponsorship

Merriam-Webster defines “Sponsorship” as a person or organization that pays the cost of an activity or event in return for the right to advertise during the activity or event. This is a transactional scenario. Let’s put some more context around this idea in relation to our race team.

A transaction only scenario (Company A buys signage on Race Team’s race car), exists when money is exchanged for branding on race car. Each party receives what the other promises and each fulfills their obligation. That is where it stops.

Sponsorship can come in the form of a cash exchange for assets or a barter exchange involving products or services. Sponsorship is a form of revenue, a method to keep the lights on and pay the bills. Sports teams are able to sell their access (which they own) to companies desiring to benefit from association with the sports team.

Partnership

When you Google the word “Partnership” the results return the definition: an association of two or more people or organizations that work together, share responsibilities, risks and rewards… This can be a business partnership, where two or more persons take on the workload and share the risks associated with their business. It can also refer to a sports partnership – where a team and a company agree to terms and work together to accomplish pre-determined objectives.

Working together and sharing are key components of a partnership

I see a few key phrases here. Let’s start with the term work together. To me this means that two or more parties are bringing their individual skill sets to complement each other towards a common goal. Also, the term share sticks out to me. To share something is to give up complete ownership or to receive less than 100% because someone else completes the percentage of ownership with you.

Working together and sharing are key components of a partnership. When these verbs are connected to common goals, there is potential for great results. In the context of this blog entry, partnership can be defined as the relationship between a team and a corporation. The team owns assets in which the corporation is interested in obtaining. For example, instead of Company A buying branding on Race Team’s race car, the two entities work together to build a program that meets Company A’s goals and objectives and the Race Team is able to support these goals through their assets (race car, social media, digital PR). This is an example of working together and sharing the efforts and results.

Working Together

To me, partnership is a form of sponsorship, albeit a much healthier version. Sponsorship is the umbrella term from which partnership can be achieved. Typically, companies and sports teams enter in to a version of sponsorship (money is exchanged for team’s assets). When you take this transaction and build out a program or when you take the transaction a few steps further to include an action plan in which both sides work together and share in the risk and reward, this is when a sponsorship turns into a partnership.

At LFR, we have had many sponsorships over the years. Our goal with each sponsorship is to transform it into a partnership. For more insight into our most recent partnerships, please check out the guest blog posts from both Dumont Jets and Procore, where they each provide their unique perspective on their relationship with LFR .

We believe that partnerships are stronger and last longer than sponsorships. When we establish a relationship with a company, we like to get to know them, really understand their business and look for ways to add value to their business. When we can not only fulfill sponsorship obligations, but enhance their business (partnership), we all benefit through the relationship.

We believe that partnerships are stronger and last longer than sponsorships

Which of these do you see more often? Many times, it takes additional resources (time, money, staff, etc.) to turn sponsorships into partnerships. In smaller, newer companies, not all sponsorships are able to transition to effective partnerships due to a lack of resources. When you recognize a shortcoming like this, work together to see how you can address the deficit and bring solutions to the conversation that show you are willing to put some skin in the game to turn this sponsorship into a partnership.

In closing, the words sponsorship and partnership get thrown around often without a lot of clarity. I hope this post is helpful to understand the differences and encourage you to strive for more partnerships. At the end of the day, we all need better partnerships to help our teams and companies stay on track.

Is your current sponsorship program meeting your expectations? Can it be elevated into a more mutually beneficial partnership? Let's connect and talk about the possibilities.

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Written by Jeremy Davidson

Seasoned sales and marketing executive with high level business development, client service and leadership experience. Having spent 20+ years in the sports world, Jeremy has worked for the client, agency, facility and now the team to gain a comprehensive approach to business.