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What’s my sponsorship worth?: A Guide to Sponsorship Valuation

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WHAT’S MY SPONSORSHIP WORTH? A GUIDE TO SPONSORSHIP VALUATION
WHAT'S MY SPONSORSHIP WORTH? A GUIDE TO SPONSORSHIP VALUATION

By Evan Colborne | June 28, 2018

Some of the most common questions with regards to sponsorship are:

What’s it worth?

How do I know how much to charge?

Can I really charge more than my direct competitor?

These are all fair questions that have to do with Sponsorship Valuation. Now I wish I could say that this guide will provide definitive answers to these questions, but sadly I don’t have that for you.

For as much research and study that have gone into pricing strategy, there still seems to be a ton we don’t understand about it. Further, as much as we’d like to get it down to an exact science, pricing will in all likelihood remain an art. Sure, we will become more informed through data, but at the end of the day when it comes to setting a price and going to market, I think the art side will remain.

So if this guide won’t provide an exact answer, then what will it provide? Well, it will discuss three techniques for understanding how to price your sponsorship inventory and to better appreciate the value you are creating for your sponsors. These techniques include:

  • The Benchmarking Approach
  • The Formula Approach
  • The Value Approach
DOWNLOAD THE GUIDE TO SPONSORSHIP VALUATION HERE:
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How to encourage fans to BUY NOW!

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HOW TO ENCOURAGE FANS TO BUY NOW! 
HOW TO ENCOURAGE FANS TO BUY NOW!

By Evan Colborne | June 8, 2018

I’m not a big gambler. I’ve been to Vegas a few times, but each time I’ve gone I’ve either lost a little bit or pretty well broke even. By no means is this the result of a sophisticated gambling system; quite the opposite in fact. This is by simply not playing the game.

The reason I don’t gamble all too often is because for me the pain of losing money (and in some cases even the idea of losing money) is greater than the pleasure I get from winning money. Sure I’ve won a few bucks here and there and of course, I wasn’t upset about winning, but when I lost, it stuck with me a lot more.

LOSS AVERSION

What I’ve learned recently is that I’m not alone in this feeling. The concept is called loss aversion, which simply means that the benefit gained from a win is less than the pain felt by a loss, and people will generally try harder to avoid losses than to acquire gains. This is not exclusive to money; the concept is universally applicable to anything of perceived value.

INCENTIVES

The concept of loss aversion is very applicable for marketers trying to encourage their fans to buy tickets early. For teams and events where there isn’t enough demand to create a sell out, having empty seats can be a tough thing to overcome. “Why buy early? I know I can get a ticket the day of.” For the fan in this example, the cost of waiting is less than the benefit of buying early, which results in last minute purchases.

FINANCIAL GAIN

The airline and hotel industries recognize this problem as much as sports & entertainment do. In their cases, both regularly use price to encourage early commitments and purchases. While many people may think that waiting until the last minute will result in lower prices from desperate hotel managers, the opposite is true. Last minute purchases more often than not will come with much higher prices.

For customers who are really interested in buying, price can be a tremendous motivator to purchase. Think of yourself when planning a family vacation. If you know exactly when you’ll be flying and where you’ll be staying, you’re typically better off booking early to take advantage of the price discount. For the airline or hotel, even if this person was going to purchase anyways, having them committed early is much more valuable than the extra dollars lost in discounting (assuming the discount is not too deep). Using price discounts as a way to encourage early ticket purchases is a good first step that Sports & Entertainment organizations can implement, however, there is still more that can be done.

EMOTIONAL LOSS

Looking at this challenge from a loss aversion perspective, we know that losses are more powerful than gains. So to encourage a certain behaviour, instead of a price increase, we take something of value away. For example, recently Swiffer ran a promotion with the Toronto Raptors where if you purchased $25 worth of Swiffer product and sent the barcodes in along with a completed form, you would receive one of a limited number of authentic pieces of the original Toronto Raptors court. Being a lifelong Raptors fan and having seen games played on that court back when the team played at the Skydome (now Rogers Centre), I was immediately drawn to this promotion. I bought the product, sent in the barcodes and anxiously waited to see if I would be one of the lucky recipients. Looking back on this experience, I realized that it perfectly illustrates the concept of loss aversion. Because there was a very limited supply of the prizes, and I cared a lot about the prize, it encouraged me to act quickly. The thought of losing out on the prize created the threat of an emotional loss.

The lesson here for marketers of sports & entertainment organizations is that if you can find an item (whether it be a prize or access) that your fans truly care about and want to avoid losing, you can influence behaviour and successfully drive early ticket purchases. You may also find that by applying an emotional loss incentive, that you don’t need to discount price, leading to more revenue. This also allows you to save your price discounts to encourage other behaviours that result in more profit such as buying more tickets, coming to more events etc.

CONCLUSION

Unfortunately, while the principles behind these strategies are rooted in science, there is no exact science, at least that I’m aware of, on how to apply them. As a marketer, your goal is to understand your fan base as best you can, particularly on what they care about, and then continuously tweak and optimize until you find a winning combination of incentives.

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The most important thing when starting a business

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THE MOST IMPORTANT THING WHEN STARTING A BUSINESS
THE MOST IMPORTANT THING WHEN STARTING A BUSINESS

By Cosmos Sports | May 11, 2018

Starting a business is hard. If it were easy, everyone would do it. There are so many factors that can negatively impact your business’ chance of surviving. But spending all your time carefully planning for and addressing every one of those factors is impossible, so you have to focus your energy on the places where it will have the biggest impact. So what is the most important thing when starting a business?

In this video, Cary discusses one of the most important things to keep in mind when starting a business. As someone who helped launch the Hamilton Bulldogs, to then starting his own business in Cosmos Sports & Entertainment, to leading the start up of the Brampton Beast Hockey Club, Cary has seen first hand multiple times how hard it is to start something new.

This video is a clip taken from a keynote Cary gave to a group of students at McMaster University in Hamilton, Ontario. The talk was part of the McMaster Sports Industry Conference, a student run event that seeks to build a bridge between the classroom and the sports industry.

It’s a good question. I think, you know, yes you want to start traditional, having a business plan and doing all that background stuff is really good. But I think again, it depends on what the concept is.

I don’t know if there’s any critical paths or steps. I think what I would say is that understanding that the product generally is overrated. So the product or service is just one part of it. How do you sell or market the product?

“…Tide’s not the best detergent. Gillette’s not the best shaver. They don’t win tests. They just sell the most.”

Tide’s not the best detergent. Gillette’s not the best shaver. They don’t win tests. They just sell the most. So who’s correct? Is Gillette right or is Wilkinson right? Pabst Blue Ribbon has way better beer than Molson’s; yet Molson’s outsells them 100 to 1. Who’s right?

The reason people buy Gillette is because there’s Roger Federer commercials. Gillette’s 10 times the cost of Bic. If you buy Bic you don’t cut yourself. I don’t come in and I’m bleeding because I used a Bic, but people don’t buy Bic, they buy Gillette. People buy Tide. They buy brands.

“It can never be just marketing, it’s marketing and sales.”

So even from day one understanding that having a good product or good idea or good service is probably 10% and people tend to think it’s 90%. And then it’s sales and marketing. And again marketing has to lead to sales. It can never be just marketing, it’s marketing and sales.

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The Importance of Work Ethic in Sports

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THE IMPORTANCE OF WORK ETHIC IN SPORTS
THE IMPORTANCE OF WORK ETHIC IN SPORTS

By Cosmos Sports | April 27, 2018

In a highly competitive industry like sports, if you want to succeed you have to differentiate yourself, with such as a good work ethic in sports.

Everyone is passionate, that’s not enough. As Cary discusses here, a strong work ethic can be tough to find, so if you’re someone who has a strong work ethic, it can be an excellent way to differentiate yourself from the pack.

One thing that concerns me is 10 years ago if we had a group of people and we said ok we’re gonna see who can sell the most tickets for the upcoming Tiger-Cats Game, we would say there’s an incentive and it’s $50 and whoever sells the most tickets gets $50. Used to happen a lot, teams would do that.

Now that works less than if the prize is Friday off. Your generation wants Friday off, 10 years ago they wanted $50. Problem, problem, problem, red flag.

Now by the way, I’m talking about the sports industry, I can’t talk about everywhere in the world. You guys may think that’s good, but red flag. Why? What’s the problem? The big incentive is Friday off. Can I please get Friday off? Whoever sells the most tickets Monday to Thursday gets Friday off. I hate that promotion. Why?

{Voice from Crowd} “It’s bad Work ethic”

“…If you’re looking for the day off, there’s opportunities to do that but not if you want to be an entrepreneur.”

Yeah. The trick to being an entrepreneur and there’s some big mistakes coming that I’m going to tell you about too, but the number two most important thing career wise, entrepreneur or not, for sure if you want to have your own business, is you got to work Friday and Saturday. Like do you want it or you don’t want it? If you’re looking for the day off, there’s opportunities to do that but not if you want to be an entrepreneur. If that’s so important to you, wrong field. That’s not cool. Like I really want to get Friday off.

“…You’re going to spend a hundred thousand hours of your life working, you guys can do the math. It’s probably a little higher than that. A hundred thousand hours. So it’s kinda good if you like it.”

I get it, you should want to have more fun with friends and family than you do at work, for sure. And there needs to be a balance, and being a workaholic is bad, but it’s gone too far the other way. The shift’s wrong. You’re going to spend a hundred thousand hours of your life working, you guys can do the math. It’s probably a little higher than that. A hundred thousand hours. So it’s kinda good if you like it.

So work ethic is an issue for a lot of people. So here’s what’s good. It’s harder to find people with really good work ethic. 10 years ago it was easier to find, now it’s harder to find, so if you have it, if you’re the person who wants the $50. I don’t care what the incentive is, but Friday off shouldn’t be the thing you want.

“…if you want to do something you like doing, you gotta commit to it.”

You guys are sitting in a sports conference, so you’re spending your day today and my assumption is part of the reason is you want to do something you like doing. And if you want to do something you like doing, you gotta commit to it.

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A Typical Day in Sports

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A TYPICAL DAY IN SPORTS
A TYPICAL DAY IN SPORTS

By Cosmos Sports | April 13, 2018

Working in sports, there are rarely two days that are ever the same in a typical day in sports. For most, that’s one of the most exciting parts about working in the sports & entertainment industry. In a time when there seems to be more and more specialization from an early age, variety is also a reason to adopt a more generalist approach.

The video below is a highlight from a keynote Cosmos President Cary Kaplan gave to a group of students at McMaster University on March 16, 2018. The keynote was part of the McMaster Sports Industry Conference, a student run event that looks to bridge the gap between the classroom and sports industry.

Every day is different I think, which is what’s exciting to me is there’s not really any two days that are different.

Look the Brampton Beast has been cool thing cause I’m the General Manager. So one of the things, I’ve always been on the business side and now I have some responsibilities on the hockey side. But to me it’s taking another course. It’s like I said, it’s like taking marketing and finance and accounting.

“…to me it’s taking another course. It’s like I said, it’s like taking marketing and finance and accounting.”

So, yea on a game day I interact with the coach of the team, reports to me, and you know there’s a number of hockey related things and one of my biggest enjoyments is to go to Brampton Beast hockey games for two hours and watch the game.

“…I think what I would say is all my days are different, and that, to me that’s exciting.”

But, I think what I would say is all my days are different, and that, to me that’s exciting. So I think it’s, and just like you guys. If I asked you what’s a typical day, right, you don’t have a typical day. But that’s what’s exciting about it. That’s what’s exciting about taking multiple courses and doing multiple things and work’s the same way or it should be.

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What networking really means

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WHAT NETWORKING REALLY MEANS
WHAT NETWORKING REALLY MEANS

By Cosmos Sports | April 6, 2018

Networking is a very common term, and when heard usually triggers visions of hors d’oeuvres, name tags and business card exchanges. These visions can often be followed by feelings of stress for many.

In this video, Cary discusses what networking really means to him, and how it can be a lot easier than many think.

I think networking is a very formal term. What I would say is it’s more about being comfortable talking to people. If it’s formalized and you’re going a networking event and stuff, it’s stressful. There’s some value to that, but again to me networking is talking to people you know about having coffee.

“I think networking is a very formal term. What I would say is it’s more about being comfortable talking to people.”

Like for instance, there’s how many people sitting here, 40? Let’s say 15 of you end up in sports. You should all know each other. You should be able to call and say, “Debbie how are you?” That’s what Linkedin for instance is awesome at. “Hey I saw that you’re working at Hockey Canada, wondering if you have a few minutes to meet?”

So to me the real networking is a lot easier and it’s dealing with people you know. And as you get to know more people that becomes easier. So if I’m trying to reach somebody at RBC, the mistake is to call the President or the Vice President. I would never do that. I call the person I know even if they’re an administrative assistant to an administrative assistant. I call the person I know and say “Hey I know you’re at RBC, how does it work? Just wondering how does Marketing work, how does sponsorship work?”

“…the mistake is to call the President or the Vice President. I would never do that. I call the person I know even if they’re an administrative assistant to an administrative assistant.”

What happens is they’ll push you in the right direction. And that’s so much easier. I’m going to call a friend. Somebody you know probably knows somebody that works at RBC. That’s where to start.

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The Importance of Sales Skills for your Career

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THE IMPORTANCE OF SALES SKILLS FOR YOUR CAREER
THE IMPORTANCE OF SALES SKILLS FOR YOUR CAREER

By Cosmos Sports | March 23, 2018

When looking to build a career, particularly in a highly competitive industry, you want to find a niche. Something that can help you distinguish yourself and stand out from the rest of the competition through the importance of sales skills. Something that once you’ve delivered for an organization, can help make you indispensable to them.

In this video, Cary shares his thoughts on why sales skills are the most important skill anyone can develop for their career. Regardless of whether you will be working directly in sales or not, Cary explains how appreciating sales for what it is can help you find success.

First thing I did work-wise was I went to Ottawa and they had this association with all these different sports governing bodies. Long story short at the baseball, hockey and basketball guys, there were no jobs there. So I ended up at the one that got the most excited which was Bridge Canada. You know Bridge the card game? I don’t know how to play it myself, but the first thing I ever did was sell tickets for a bridge tournament. And here’s one thing I learned. I didn’t sell any by the way, might have sold two. But the people in Bridge are passionate about Bridge. People are passionate about what they do, so be curious.

“the first thing I ever did was sell tickets for a bridge tournament.”

So anyway, I did bridge, did some short track cycling events, five pin bowling, and this was still while I was working with this other company and didn’t make any money. Then a hockey team moved from Cape Breton Nova Scotia to Hamilton. I applied to be the new Marketing Director; there were 300 applications, and I got hired. Really surprised. And I remember after like a month (which again I don’t recommend), I went to my boss and said “I have to ask you, why did you hire me?” He said, “well we didn’t meet anybody that could sell bridge and bowling and if you can do bridge and bowling and cycling you can probably do hockey.”

So got hired as the Director of Marketing and did that for a few years. Every time there was an opportunity I put my hand up. Some people left and I ended up being the President of the Hamilton Bulldogs at 30 years old. So I was the youngest person to be a President of a hockey team in North America at the time. I was the first employee of the Bulldogs and I was there for the first six years and I’m always happy that the team has changed a few times but is still here.

So a couple lessons. So one, the most important skill, the single most important skill for your career is sales. And you’re all in it by the way. So those people who say they don’t want to work in sales, too bad. Tough. You’re in it. Marketing is sales. Promotions is sales. If you want to be an accountant you get hired by selling yourself. What do you think coaches do? How do they get players to play well? Sales. How do coaches recruit? Sales. They call it recruiting because they don’t like the term sales and people are afraid of the word. Coaches are good salespeople. Mike Babcock getting Nazem Kadri to play really well means he’s a good salesperson. He may use a different word but that’s what it is.

“So those people who say they don’t want to work in sales, too bad. Tough. You’re in it. Marketing is sales. Promotions is sales.”

The number one skill in your career is sales and if you’re afraid of it and you use the words “I don’t want to sell” then good luck getting a job. Because the person that’s interviewing you knows that every single person in their organization including them is a sales person. It may take you until you’re 40 years old to understand that, but if you say I don’t want to be in sales, be prepared for a very different career path.

Is there anybody here that wasn’t a baby? Strange question I know. Anybody go from 0 to all of a sudden you were 16 years old? Babies are the best sales people in the world. Can’t speak. They’re born, they’re hungry they can’t speak what do they do? Cry. So let’s say they’re not hungry but they’re tired. So they’re tired, they’re crying, you give them food, what do they do? Still cry. You guys all did it by the way. Hate to break it to you, you all did it. Started selling when you were born. You’ve been selling you’re whole life. You want to convince your parents or friends or family that you want to stay out until to 2 o’clock in the morning, you’re not sending a press release. “Dad, cmon…” That’s sales. You’re convincing your friend that one team is better than another or that you should go to a club or a bar or movie, it’s all sales.

“You’ve been selling you’re whole life. You want to convince your parents or friends or family that you want to stay out until to 2 o’clock in the morning, you’re not sending a press release.”

Be really careful if you think in your mind today that you don’t want to be in sales. Be really really careful understanding what that does. Marketing is a form of sales. The only objective of marketing, the only one is sales. Toys’r’us and Sears just went out of business because they didn’t sell enough. Retail industry is challenged, newspaper industry is dying. But if they sell more they’re fine. If you can’t be part of that process you’re not going to be successful for a company.

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ICYMI – Top Stories from the week of Dec 3 – Dec 9, 2017

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ICYMI – TOP STORIES FROM THE WEEK OF DEC 3 – DEC 9, 2017
ICYMI - TOP STORIES FROM THE WEEK OF DEC 3 - DEC 9, 2017

By Evan Colborne | Decmeber 11, 2017

Every week we recap the top Canadian Sports Business stories from the past week.

Rogers Pondering Sale Of Blue Jays As Another Media Company Whiffs With Baseball

Mike Ozanian of Forbes recounts the other examples of media companies purchasing baseball teams in hopes of finding profitable synergy. As the title of the article suggests, this strategy has not had a strong track record. FULL STORY

Study into replacing Peterborough Memorial Centre could start Tuesday

The 61-year-old Memorial Centre was last renovated in 2003; at that time, there were additions such as private box suites, a restaurant and new seats. That renovation, which cost about $13.3 million, won’t be paid off for another six years.

A new downtown NHL arena: What Ottawa can learn from Edmonton

With advanced talks taking place about a new downtown arena for the Senators, decision makers in Ottawa look to Edmonton and it’s new crown jewel arena to understand what they are in for; both positive and negative. FULL STORY

Fewer than 1,000 Saskatchewan Rush season tickets left for sale

Team officials announced that over 10,000 season tickets have been sold, with plans to cap season tickets at 11,000 to leave room for single tickets. FULL STORY

Goodbye? Coliseum gets a lifeline while Northlands announces farewell weekend

Council was told it will cost $1.5 million a year to maintain and secure the shuttered facility, and at least $15 million to demolish it. FULL STORY

‘Quintessentially Canadian’ Grey Cup sees viewer results

The 105th Grey Cup on Nov. 26 was the most watched on TV since 2013, up 10 per cent over last year’s game with an average of 4.3 million viewers on TSN and RDS, according to data from audience measurement organization Numeris. FULL STORY

Windsor officials to make bid for police-fire games

At an estimated cost of $580,000, a report from sports tourism officer Samantha Magalas estimates the economic impact at $5 million to $10 million. FULL STORY

CBC makes a play for cord cutters with $4.99 ad-free streaming service

Online viewers will have access to high-profile content including Hockey Night in Canada, the rights to which CBC sub-licensed from Rogers Communications Inc. FULL STORY

Edmonton boxing industry sucker-punched by ban on combative sports

The temporary moratorium, approved unanimously by city council Friday, prevents new licences or event permits from being issued for any combative sports competition until at least Dec. 31, 2018. The temporary ban went into effect Saturday. FULL STORY

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ICYMI – Top Stories from the week of Nov 26 – Dec 2, 2017

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ICYMI – TOP STORIES FROM THE WEEK OF NOV 26 – DEC 2, 2017
ICYMI - TOP STORIES FROM THE WEEK OF NOV 26 - DEC 2, 2017

By Evan Colborne | Decmeber 4, 2017

In this new weekly segment, we’re curating the top stories in Canadian Sports Business from the week that was.

$1.7-million gift will help U of T become a player in sports management

The gift from U of T Alumni Tenniel Chu is the largest gift from an individual to U of T Scarborough’s department of management. FULL STORY

The Senators are not for sale — period — says club’s president and CEO

Last year Forbes valued the Sens at $355 Million. A big driver of value for the team is talks of a new downtown arena. So even if the team isn’t really for sale, it would be wise for a potential buyer to have clarity on the new arena before signing a cheque. FULL STORY

Winnipeg pro sports clubs to collect $16.3M in public assistance in 2018

Winnipeg’s professional sports clubs are in line for about $16.3 million of government assistance next year, thanks to a combination of gaming revenue as well as tax breaks, tax refunds and tax exemptions. FULL STORY

Canada’s new minister of sport pushes for Calgary Olympic bid

I know an Olympic bid, deep in my heart, would be something that would be extraordinary,” Hehr said in an interview with CBC Sports. FULL STORY

Alberta banning ticket scalping bots in new consumer protection bill

Under the proposed Alberta law, ticket sellers would have to perform “due diligence” to block bots on their websites, and cancel any tickets snapped up through the software. FULL STORY

St. John’s Edge hoping to sell out franchise’s first home game

There has been lots of speculation about whether Newfoundland and Labrador is ready to welcome a professional basketball team. FULL STORY

St. Catharines council throws support behind bid on the Brier

Speaking as a member of the bid committee, Doug Geddie said they anticipate it would have an economic impact of $12 to $15 million as well as once again shining a spotlight on the city. FULL STORY