WHY DO COMPANIES INVEST IN SPORTS?

Whether it's football, cricket, or auto racing, they all have something in common. It's the companies that sponsor them. Teams like AC Milan, Real Madrid, and Arsenal are sponsored by huge companies like Emirates. IPL teams like RCB also have massive corporations like Kingfisher and Britannia as their sponsors. F1 teams like that of Ferrari are also sponsored by Royal Dutch Shell.

Many companies also sponsor tournaments as a whole, like the La Liga Santander or Dream 11 IPL.

Why do companies invest in sports?

• Usually, companies sponsor teams with an aligned demographic. Because sports teams know exactly who their fans and this helps marketing, companies investing are informed of various factors including gender, location, and buying power. Identifying vital details on these demographics helps sports teams align with the right sports teams or tournaments; ones whose fans are likely to spend money with your brand. For example, Bayern Munich's primary sponsors are T-Mobile, and telecom services are used by almost everyone in the particular region. T-Mobile investing in a German team helps them to gain more fans as users because fans would feel compelled to use their favourite team's sponsor's services loyalty to their team.

• The Premier League is the most-watched sports league in the world, broadcast in 212 territories to 643 million homes, and a potential TV audience of 4.7 billion people. That's more than half of the world's population. Companies that pay for advertising for banners and sponsor teams are viewed by billions of people. These companies help in broadening their reach to customers.

• The reach companies get by investing in sports leagues is massive. Champions League, has upto 380 million viewers every season and the IPL with more than 400 million - across various countries in one season – this audience is amplified by everyone that follow live on social media or catch up later. There aren't many industries that give an opportunity like this – as a brand, the number of eyes on you if you invest in sports sponsorship is unequaled.

• Companies also invest in teams for B2B (business to business) opportunities. It helps companies connect with other companies and look for future business opportunities. It also helps companies to mend bad relationships with customers by investing in teams and buying fan/customer loyalty towards their company.

Companies can majorly profit from sports by sponsoring the right teams and tournaments and capitalising on an audience of billions of people. Sporting events and sports teams offer a marketing opportunity like no other industry.