The Role of Sponsorships in Intercollegiate Athletics Essay example

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The Role of Sponsorships in Intercollegiate Athletics

Foreword

The reality of college athletics today is that most athletic departments are not profitable. These departments are run with a mentality sometimes quite separate from the educational mission of the university where winning at any cost is the ultimate goal.

As athletic department expenses rise there is a need for increased revenue. One major trend that has been seen throughout sports is the increase in sponsorships. For many colleges this has become a viable and important revenue stream, although only adding marginally to the bottom line at most schools.

With the prevalence of sponsorships in intercollegiate athletics today many questions arise. What brought
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To retain the loyalty of fans and supporters of intercollegiate athletics as well as not to compromise the educational mission; sponsorships must be done with much forethought in order to create a truly mutually beneficial partnership between the university and business.

The Rationale behind the Existence of Sponsorships

The arms race and growing expenses involved with running an athletic program has created an environment where the majority of Division 1 programs are operating at a loss. To quote one dismal statistic, in 2000 only 43.4% of all Division 1 programs operated in black (Lee, 2000). With expenses unlikely to diminish, athletic departments are constantly looking for ways to increase revenue whether it is from selling more tickets, as ticket sales are a main source of revenue for almost all programs, or through the creation of additional revenue streams.

One revenue stream that has increased in popularity over the last few decades is that of sponsorships. Sponsorships may be defined as “an investment, in cash or kind, in an activity, in return for access to exploitable commercial potential associated with that activity” (Meenaghan, 1991, p.36). The typical sponsorship will include signage in arenas, advertising in game programs and television/radio broadcasts of the team’s games (generally combined and referred to as media), the mark as official sponsor of the team or athletic department offering exclusivity in

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