Jan 26, 2010 at 11:10 PM
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IEG: 'Better Days Ahead'

Hot off the presses here's IEG's rosy sponsorship prediction for 2010. Great news! Wait until mid year to carve this in stone though. Rosy pictures can be repainted, or revised downward by say 50%, come June.

Chicago, Ill. (Press Release) – Sponsorship spending by North American companies is expected to grow 3.4 percent this year to $17.08 billion, according to IEG Sponsorship Report, the world’s leading authority on sponsorship.

The projection is welcome news to the sponsorship industry, as spending declined 0.6 percent from ’08 to ’09 to $16.51 billion. The decline marks the first time that less money was spent on sponsorship than in the prior year.

“Those unprecedented numbers reflect a marketplace that never recovered from the economy’s free fall towards the end of ’08,” said William Chipps, IEG SR’s senior editor. Sports, the largest sponsorship category in dollar terms, saw spending decline one percent from $11.4 billion in ’08 to $11.28 billion in ’09. Two of the other six major property sectors suffered a drop in revenue also: Spending on causes slipped a scant 0.3 percent from $1.52 billion to $1.51 billion, while arts spending fell 0.8 percent from $848 million to $820 million.

The other sectors managed gains, but not of the variety that cause leaps of joy. North American corporate spending on entertainment tours and attractions rose 0.8 percent from $1.63 billion to $1.64 billion; spending on festivals, fairs and annual events increased 0.4 percent from $753 million to $756 million; and spending on associations and membership organizations went up 2.9 percent from $482 million to $496 million. Each of the six sectors continue to earn the same share of the sponsorship pie as they did in ’08, with sports taking 68 percent of the dollars, followed by entertainment tours and attractions at 10 percent.

With the U.S. economy at the heart of the downturn, spending by companies based outside North America has not been as negatively impacted by the recession. Global sponsorship expenditures reached $44 billion in ’09, a 2.1 percent increase from the $43.1 billion spent in ’08.

Minus activity by U.S. and Canadian companies, spending by the rest of the world hit $27.5 billion in ’09, a 3.8 percent rise over $26.5 billion in ’08.

For ’10, IEG SR projects 4.5 percent growth in worldwide sponsorship to $46 billion. The largest gains will come from Africa and South America, in part due to activity and interest surrounding South Africa’s hosting the 2010 FIFA World Cup and a developing sponsorship marketplace in countries such as Argentina and Brazil, the latter of which will host both the 2014 World Cup and 2016 Olympic Games.

Countries based in Central and South America will increase spending by 5.7 percent to $3.7 billion, while companies from all other countries, including those on the African continent, will grow their spends by the same 5.7 percent proportion to $2.1 billion. European companies will boost spending five percent to $12.7 billion and those based in the Asia Pacific region will see a four percent rise to $10.4 billion.