Coronavirus' Impact on Three of the World's Biggest Sponsorship Properties

Some of the world's biggest properties are reporting results for the first full quarter after the lockdown and sponsorship will likely be among the biggest revenue streams to contract for event-dependent public companies. While some companies, like Six Flags, recognize sponsorship revenue, not when the deal is signed, but over the course of the sponsorship deal's lifetime, companies are likely to defer recognition of sponsorship revenue until benefits can be delivered or until new benefits are negotiated as make-goods for the benefits that were contracted, but cannot currently undeliverable. This makes creatively coming up with new sponsorship assets a mission critical function for sponsorship pros during this turbulent time. Others, like Manchester United, view the current period as an unfortunate opportunity to rethink and diversify the assets offered to sponsors.

Here's what the current state of sponsorship means to the bottom line at three of the world's biggest properties and what they're saying about a recovery to normal. 

Six Flags

Revenue fell 96% to $19.1 million from $477.2 million last year.The decrease in revenue was also partially attributable, to a $29 million reduction in sponsorship, international agreements and accommodations revenue. "We recognized little revenue from corporate sponsorships in the second quarter, but are working with our corporate partners on a case-by-case basis to defer other planned programs until our parks are open," says Sandeep Reddy, Six Flags Executive Vice President and Chief Financial Officer.

Live Nation

While first quarter sponsorship revenue was minimally impacted, Live Nation is aggressively exploring alternative assets to deliver to sponsors from drive-in concerts to online festivals. "Over the summer period, there'll be testing happening, whether it's some fan-less concerts, which are really important for our sponsorship business and all the ways we can create great properties to keep all of our sponsors who have been amazing and sticking with us this year," says Michael Rapino - Live Nation President, CEO & Director. "So it's important for us to keep doing drive-in concerts. We're going to test and roll out, which we're having some success with, fan-less concerts, which have great broadcast opportunities; reduce capacity of festival concerts where it could be outdoors, in a theater, or in a large stadium floor, where there's enough room to be safe."

Manchester United

"No question, the economic ramifications from this global pandemic will continue to resonate for years to come, but we remain optimistic about the long-term outlook for the sponsorship business and our ability to remain a leader within the market," says Richard Arnold - Manchester United Group Managing Director and Director. "We've taken advantage of this temporary pause in normal routine to creatively attack our operational approach with disruptive innovations across all of our business lines, in particular the content capture and production, as well as further enhancing the embedded digital offering to commercial partners, deepening our e-commerce integration as well as expanding our CRM and in-house data capabilities."