The Impact of Furloughs Across the Sponsorship Industry

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In recent months, the coronavirus has pushed the sports industry into a position that no one could have anticipated. Employees across college athletic departments and professional sports organizations have been furloughed in an attempt to offset the major losses that are expected due to the pandemic. Although professional sports organizations believe that the losses are recoverable over time, few have hesitated to reduce their staff in the meantime. Monumental Sports and Entertainment, the Pittsburgh Penguins, and the Carolina Panthers are just a few of the organizations that have made major adjustments to their staff in response to the coronavirus.

These adjustments have been widespread across the industry and do not seem to be slowing down any time soon. An important question to consider is just how vast the impact of these furloughs could be for sports organizations moving forward. With practically no fans in attendance across the various bubble formats in professional sports, teams have had to achieve greater levels of efficiency within the different revenue streams that are maintaining growth during these tough times.

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We are already starting to see how sponsorship inventory is undergoing a major transformation. With the fanless environment, teams will need to ensure their sponsors that their brand is worth investing in. The best way to do this is with data, but that can be a timely task that will be hard for furloughed organizations. To account for this shortcoming, we are seeing the rise of supplemental assistance from sports agencies and companies that specialize in operations such as sponsorship asset optimization. Companies, such as Trajektory, can significantly increase operational efficiencies by saving the employees of these organizations valuable time in the collection, organization, and reporting of asset performance to their various brand partners.

These efforts will be extremely beneficial to sports organizations that are attempting to maximize efficiency with fewer employees. Understanding how all of a team’s individual sponsorship assets are performing on a deeper level and being able to communicate this value will be more important than it has been in the past. We believe that this process will only begin with impacting existing partnerships and will later support the renewal and furtherance of new partnerships as well. The impact of furloughs will differ across various organizations, but what teams do to maintain a competitive advantage will tell the better story. Teams will begin to adapt and partner intelligence will be a necessity for partnership departments to continue to grow throughout these challenging times.