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The Silent Side of Sponsorship: an Explorative Study of Relational Determinants for Shared Value Creation

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The Silent Side of Sponsorship: an Explorative Study of Relational Determinants for Shared Value Creation The Silent Side of Sponsorship: An Explorative Study of Relational Determinants for Shared Value Creation Author: Nicolai Guldager Agernem (Student ID: 93291) Supervisor: James Menszies Copenhagen Business School Master’s Thesis Study Programme: Master of Arts (MA) in International Business Communication: Multicultural Communication in Organizations Date: 15 May 2019 Number of Pages | Number of Characters 79.89 |181,767 (including spaces and footnotes) Nicolai Guldager Agernem International Business Communication Master’s Thesis Copenhagen Business School Executive Summary Sponsorships have evolved from philanthropic to strategic and from exposure to meaning, where brand opportunities eclipse traditional advertising through the unique interaction with sports consumers. Sponsorship revenue is vital for the financial health of Danish football clubs. Sports properties commonly offer sponsors exposure, brand association, hospitality, and networking opportunities. However, the three latter elements are labour intensive, which leaves exposure as the main incentive for sponsoring. However, the Danish sponsorship market is fiercely competitive, which makes it cutthroat business to sustain a competitive advantage. FC Copenhagen and Brøndby IF, who have the largest following and offer the highest levels of exposure for sponsors, dominate the Danish sponsorship market. When competing on exposure is a zero-sum game, the question, then, is how do you achieve a competitive advantage in the Danish sponsorship market? Sponsorship literature is fixated on sponsor-sponsee dyads and exploring how sponsors can increase sponsorship effectiveness. This has created a discourse of the sports property being an exploitative marketing platform. This paper explores how sports properties can leverage its brand to attract more and better sponsors by examining relational determinants and the role of value alignment. The paper is based on social constructivism and qualitative interviews. The empirical data comprises six interviews with three large companies from different industries, and three Danish full-time professional football clubs. This study explores the sponsor-perceived brand value of sports properties’ CSR-initiatives. The perceived value can be extrapolated to indicate whether CSR-initiatives produces inimitable sports property brand attributes, where sponsors see opportunities for beneficial brand image transfer and shared value creation. This paper explores how Danish football clubs can attract more sponsors and attain a competitive advantage in the sponsorship market. More specifically, this paper explores how organisational value-alignment, inter- organisational and inter-personal relations, and affectionate and transactional sponsorships affect the likelihood of shared value creation. This study demonstrates that inter-personal and inter-organisation shared understanding is an important driver of value-based commitment, and consequently shared value creation. Inimitable CSR-initiatives create brand attributes that are attractive for potential sponsors and represent emerging opportunities for existing sponsors. However, sports property inertia, passiveness, and negligence of emerging opportunities create tensions in the sponsor-sponsee dyad. Nicolai Guldager Agernem International Business Communication Master’s Thesis Copenhagen Business School This study argues that sponsorships are increasingly becoming a medium for ‘meaning’-creation and interaction in a complex interplay with the sponsor, sponsee, and stakeholders. From this perspective, the value-based sponsorships and its effect on sponsor/sponsee brand equity should be analysed from a sponsorship network perspective This paper concludes that CSR-related activities can facilitate shared value creation, and constitute a competitive advantage in the Danish sponsorship market. CSR-related activities should be linked to the sports properties core competencies in relation to football and its societal function. In addition, CSR-related activities should be compatible with sponsors’ core business and/or core competencies. Finally, this paper concludes that affectionate sponsorships cannot facilitate shared value creation on its own; the sponsor must see potential for increased business value in engaging in initiatives outside current contractual obligations. Similarly, the sponsee must accommodate and explore opportunities that spur business benefits for the sponsor. 2 Nicolai Guldager Agernem International Business Communication Master’s Thesis Copenhagen Business School Contents Executive Summary ....................................................................................................................................... 1 Introduction ................................................................................................................................................... 5 Problem Statement ....................................................................................................................................... 6 Background .................................................................................................................................................... 7 Setting the scene ....................................................................................................................................... 7 Revenue streams and Sponsorship Revenue ............................................................................................ 8 Philosophy of Science .................................................................................................................................. 10 Social Constructivism ............................................................................................................................... 10 Methodology ........................................................................................................................................... 14 Delimitation ............................................................................................................................................. 16 Literature Review ........................................................................................................................................ 17 Sport sponsorship .................................................................................................................................... 17 CSR and Creating Shared Value through Sponsorships ........................................................................... 24 Sponsorship as Competitive Advantage .................................................................................................. 26 Towards a model ..................................................................................................................................... 28 Summing up the theory ........................................................................................................................... 30 Interviews and Cases ................................................................................................................................... 31 FC Nordsjælland....................................................................................................................................... 31 FC Midtjylland .......................................................................................................................................... 31 Lyngby Boldklub ....................................................................................................................................... 32 Arbejdernes Landsbank ........................................................................................................................... 34 Deutsche Post DHL Group – Nordics ....................................................................................................... 34 Danske Licens Spil .................................................................................................................................... 35 Analysis ........................................................................................................................................................ 36 Sponsorship Network .................................................................................................................................. 36 Value Alignment ...................................................................................................................................... 36 Relationship Marketing ........................................................................................................................... 46 Brand Image Transfer .............................................................................................................................. 53 Shared Brand Image – Sponsorship Network .......................................................................................... 54 Internal and External Stakeholders ......................................................................................................... 58 Rounding up the Analysis ........................................................................................................................ 60 Discussion .................................................................................................................................................... 61 Conclusion ..................................................................................................................................................
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