Sports Sponsorship is the financial support for a sport (whether this is an event, organisation or performer) by an outside body (be it a person or organisation who are called sports sponsor) for the mutual benefit of both parties. Sponsorship occurs at all levels of sport. School teams may have sponsored kit while elite athletes may be paid large sums of money to wear certain sportswear or use branded equipment. Sponsorship can be financial or inkind payments. Sponsorship means both parties receive benefits from the agreement. Raises awareness of their company or brand. Advertises products and services. Promotes a positive and healthy image of their company by linking it with a popular activity, even if the product is not particularly healthy Provides rewards or incentives for staff and customers. Increases sales through increased media exposure
Scholatic 2022 – 2023 Table of Contents I INTRODUCTION 1.1 Definitition of sports sponsorship and sports sponsor 1.2 Purpose of sports sponsorship 1.3 General introduction of Spotify and FC Barcelona 1.3.1 Spotify: .1 1.3.2 FC Barcelona: II SPORTS SPONSORSHIP: SPOTIFY WITH FC BARCELONA 2.1 All about sports sposorship deal between Spotify and FC Barcelona 2.2 Benefits and Risks 2.2.1 Benefits that Spotify gets when sponsoring 2.2.2 Benefits that FC Barcelona gets when being sponsored by Spotify 2.3 III Solutions 10 CONCLUSION 11 I 1.1 INTRODUCTION Definitition of sports sponsorship and sports sponsor - Sports Sponsorship is the financial support for a sport (whether this is an event, organisation or performer) by an outside body (be it a person or organisation who are called sports sponsor) for the mutual benefit of both parties - Sponsorship occurs at all levels of sport School teams may have sponsored kit while elite athletes may be paid large sums of money to wear certain sportswear or use branded equipment Sponsorship can be financial or in-kind payments Sponsorship means both parties receive benefits from the agreement 1.2 Purpose of sports sponsorship - Raises awareness of their company or brand - Advertises products and services Promotes a positive and healthy image of their company by linking it with a popular activity, even if the product is not particularly healthy - Provides rewards or incentives for staff and customers - Increases sales through increased media exposure 1.3 General introduction of Spotify and FC Barcelona 1.3.1 Spotify: Overview: - Establish: April 23, 2006 Xtoc-Khom, Sweden - Headquarters: Xtoc-khom, Sweden - Managing Director: Daniel Ek - Founders: Daniel Ek and Martin Lorenzon - Organization: Spotify AB - Subsidiaries: Spotify AB, The Echo Nest, Spotify USA Inc, Tunigo AB, Spotify Singapore PTE Ltd., Spotify USA Spotify is a digital music, podcast, and video service that gives you access to millions of songs and other content from creators all over the world founded by Daniel Ek and Martin Lorenzon Spotify transformed music listening forever when it launched in 2006 Discover, manage and share over 100 million tracks and 5 million podcasts titles, for free, or upgrade to Spotify Premium to access exclusive features for music including improved sound quality and an on-demand, offline, and ad-free music listening experience Today, Spotify is the world’s most popular audio streaming subscription service with 489 (four hundred eighty-nine) million users, including 205 (two hundred five) million subscribers in more than 180 markets Its user and subscriber based is largely US and Europe based Basic functions such as playing music are totally free, but you can also choose to upgrade to Spotify Premium Whether you have Premium or not, you can: - Get recommendations based on your taste - Build collections of music and podcasts - And more! Spotify is available across a range of devices, including computers, phones, tablets, speakers, TVs, and cars, and you can easily transition from one to another with Spotify Connect 1.3.2 FC Barcelona: - FC Barcelona (Futbol Club Barcelona) also known as Barca is an accomplished football club based in Barcelona, Catalunya, Spain Barcelona was founded in 1899 by a group of Swiss, English and Catalan footballers, led by Joan Gamper - Barcelona is one of the most widely supported football teams in the world and the club has one of the largest social media followings in the world among sports teams One of three founding members of Primera División that has not been relegated since its founding in 1929, along with Athletic Bilbao and Real Madrid - During the formation and development of the club, Barca has had the service of famous players who have entered the legend of Barca Most of them have beautiful gameplay, consistent with the philosophy that Barcelona has set out Besides, with the spirit of high discipline in competition, dedication to the development of the team, these names are loved and honored by fans as legends: Joan Gamper, Ronaldinho, Lionel Messi History begin: The tumultuous period of civil war from 1923 to 1939 - This is a glorious period marking the great development of Barca, the name of the club is known to many people At the Spanish National Championship, Barca first stood on the top position, touching the trophy reserved for La Liga champions in 1929 Since then, the team has never been relegated and always in the top "big guys" in La Liga - In addition, the participation in the Franco regime's internal team caused many upheavals In particular, the fact that Franco brought another person to the position of Barca president and changed the club's name to "Club de Fútbol Barcelona" had a significant impact on the morale of the players as well as the coaching staff in the team A new era was opened from 1939 to 1988 - With solidarity and tireless efforts, Barca has gradually regained its right to selfdetermination on internal issues Also from here, overcoming all the difficulties and challenges, a new era has officially opened with the famous Spanish club - The players on the staff of Barcelona have won valuable personal achievements in Europe, the name of the club is spread around the world Barca had the opportunity to play in the final of the C1 Cup but unfortunately did not win the championship Although not yet won the highest position, what Barca shows is undeniable, reaching the sights of many leading football experts around the world - Setting the goal of conquering the C1 Cup in the following years, the Barcelona management has made efforts to bring in expensive contracts, recruit quality names to lead and play at Barca A new era has officially opened, the era of dedicated gameplay, the era of resounding victories in all arenas Achievements: - 26 times lifting the Spanish national football championship trophy (referred to as La Liga) - 30 times won the King's Cup of Spain - 13 times crowned champion in the Spanish Super Cup - times lifting the Spanish League Cup - times won the Spanish Super Cup Copa Eva Duarte - times won the UEFA Champions League/C1 Cup - times won the UEFA Cup Winners' Cup/C2 Cup - times won the Inter-Cities Fairs Cup/C3 Cup - times won the FIFA Club World Cup - times won the UEFA Super Cup/European Super Cup II 2.1 SPORTS SPONSORSHIP: SPOTIFY WITH FC BARCELONA All about sports sposorship deal between Spotify and FC Barcelona - March 16, 2022 marked the beginning of a new era for FC Barcelona as the club signed an agreement with Swedish music streaming company Spotify to become their top partner from the season 2022/23 for the next four seasons “This partnership will allow us to continue to bring the Club closer to our fans and make them feel, even more, part of the Barỗa family through unique experiences that end Combining two activities like entertainment and football, we are able to connect with new audiences around the world.” Joan Laporta, President of FC Barcelona - Spotify will become the Club Master Partner and Official Audio Streaming Partner Spotify branding will appear on the fronts of both men's and women's jerseys and training jerseys starting from the 2022-2023 season Spotify and FC Barcelona will team up to create the opportunity for the iconic shirt to become a space to celebrate artists from around the world Spotify will also become an Official Stadium Partner with the historic Camp Nou stadium being renamed Spotify Camp Nou - This new agreement includes a number of groundbreaking announcements, such as the renaming of the stadium, for the first time in the club's history The long-term vision is to create more synergy between football and music, helping artists interact with the global community and FC Barcelona fans to experiment with new experiences around the game “Our vision for the partnership is this: Spotify and FC Barcelona want to bring the worlds of music and football together, provide a global stage for players and artists at Spotify Camp Nou, and build building new opportunities to connect with fans.” - The Spotify branding will appear on the fronts of both men's and women's jerseys starting in the 2022/23 season and for the next four seasons They will also sponsor training jerseys for the next three seasons “Spotify and FC Barcelona will work together to create the opportunity for the iconic shirt to become a space that celebrates artists around the world As a jersey sponsor, Spotify will strive to create a new platform to amplify artists' voices We think this is more than just the Spotify logo on a shirt.” - According to Spanish newspapers, the partnership is estimated to be worth €280 million over four years, although the financial figures have not been made public because of Spotify's privacy statement Barcelona Vice President of Marketing Juli Guiu assured that the deal would provide the Club with "essential financial resources to manage future strategic and sporting challenges", including benefits for exclusively for club members and supporters such as "unique experiences and discounts on subscriptions" 2.2 Benefits and Risks 2.2.1 Benefits that Spotify gets when sponsoring - First of all, one of the primary benefits that Spotify receives from sponsoring is increased brand exposure and recognition By sponsoring events that attract the company's target demographic, Spotify can showcase its brand and services to a large group of potential customers This can help to increase the number of users and subscribers, ultimately leading to increased revenue.In addition, sponsoring events and organizations can provide Spotify with opportunities to connect with potential customers and engage with them in a more meaningful way By sponsoring events that are relevant to its target audience, Spotify can interact with customers in a more personalized way, which can lead to increased customer loyalty and engagement For example, Spotify has sponsored the Women in Music organization, which aims to empower and support women in the music industry This sponsorship not only aligns with Spotify's values of diversity and inclusion, but also provides an opportunity for Spotify to connect with female music fans and artists in a more meaningful way.Furthermore, sponsoring events and organizations can help Spotify build partnerships and collaborations with other companies, leading to new business opportunities and potential growth By partnering with other companies and organizations that share its values and target audience, Spotify can expand its reach and tap into new markets For example, Spotify has partnered with major brands such as Coca-Cola and Uber, allowing it to reach new audiences and expand its customer base Overall, sponsoring events can be a powerful marketing tool for Spotify, providing numerous benefits that can help to grow the business and build a strong brand presence - The reason why Spotify decide to partner with FC Barcelona is connecting between fans with players and artists of every kind, music, and sports So Barcelona’s fans and audio lovers on Spotify will come together to form a massive, globally – connected community bridging the worlds of music and football Spotify users are mainly young people, more than 50% of the users are from 18 to 34 years old Hence, older generations, less familiar with the audio streaming subcriptions model, could be the marketable people that Spotify seeks to reach though this partnership One of the primary benefits that Spotify receives from sponsoring events and organizations is increased brand exposure and recognition By sponsoring events that align with its brand values and target audience, Spotify can reach a wider audience and increase brand awareness Giving it a presence in front of large crowds of football fans This has not only helped to increase brand recognition, but has also allowed Spotify to showcase its services and products, such as personalized playlists and exclusive artist content, to potential customers - As mentioned by Chief Freemium Business Officer of Spotify is to leverage the enormous fan base of the Spanish club: “The more fans engage with our flatform, the more opportunities creators have to make a living from their art, the huge fan base of FC Barcelona will help fuel this growth.” And for fans both music and Barca fans will be creating more interactive and exciting experiences to connect with the artists they love Spotify will able to amplify the work of artists to new potential fans and supporters - Finally, Spotify is working with Barca to leverage their access to in – stadium elements to amplify artists and enable discovery For example, using the dynamic digital displays to showcase and geo – target relevant artists to Barca’s global TV audience They has always used its investment in marketing to amplify and champion artists So Spotify is taking that same approach and applying it yo this partnership 2.2.2 Benefits that FC Barcelona gets when being sponsored by Spotify Financial support: One of the primary benefits of a sponsorship deal is financial support The sponsorship deal between FC Barcelona and Spotify provides the football club with a steady stream of revenue, which can be used to invest in players, facilities, or other aspects of the club Barcelona have ratified the club's sponsorship agreement with music service Spotify, with the streaming giant set to deliver a deal reportedly worth over €280 million (£236m/$309m) The move, which will see their stadium named the Spotify Camp Nou and shirt branding changed over the next few seasons, was agreed in principle last month The deal with Spotify also includes association with the Barỗa Academy, which is such a cornerstone for promoting talent and the club’s distinctive way of playing The Spotify brand will appear on the front of the shirts of the club’s Pro Academies, where some of the finest young international players are training Increased brand exposure: Sponsorship by a high-profile company like Spotify can help increase the visibility and credibility of FC Barcelona, both domestically and internationally This could result in increased fan engagement, merchandise sales, and ultimately, revenue for the club The collaboration with Spotify is also part of the Club’s goal to proactively seek partners who share the values and philosophy that define its brand and, at the same time, allow it to retain its status as a global benchmark, inside and outside of the playing fields, in an increasingly competitive environment Access to new technology: Spotify's expertise in music streaming and technology could be leveraged by FC Barcelona to enhance their fan experience or engage with supporters in new and innovative ways: - Fan engagement: Spotify could partner with Barcelona FC to offer exclusive content for fans, such as to Spotify's music library, playlists, or other features, providing additional value to supporters and strengthening the relationship between the club and its fanbase - Training and analysis: Technology such as data analytics, artificial intelligence, and machine learning can help analyze player performance and provide insights to coaches and trainers to improve training regimes and game strategies - Stadium experience: Spotify could enhance the game-day experience for fans by providing access to real-time stats, replays, and other interactive features through a mobile app or in-venue screens - Marketing and branding: Spotify could potentially feature Barcelona FC as a prominent brand partner, helping to increase exposure and association for both brands Collaborative marketing opportunities: Collaborative marketing initiatives, such as joint campaigns or content creation, could be developed between FC Barcelona and Spotify to promote both brands and drive engagement Additionally, Spotify's vast user base and data analytics capabilities could provide valuable insights into fan behavior and preferences, which could help Barcelona tailor their marketing and fan engagement strategies more effectively Risks to Spotify Sponsors - The contract was signed in 2022 when Barcelona FC dropped in form because of missing Messi As a result, the rate of their match could suffer, which brings decline in the success of expanding brand awareness - The risk that Spotify sponsors has to bear is being ostracized by people for false information Spotify faced a controversy after a number of artists including Neil Young demanded the removal of their music from the platform because of the continued presence of Joe Rogan, the famous podcaster accused of spreading Covid-19 misinformation According to Forrester Research, 19% of customers have canceled their subscriptions since, or plan to in the near future, and another 18.5% said they would consider canceling if more artists removed their music This problem may make it difficult for both Spotify and Barcelona to drive more audience and artists Risks for FC Barcelona - With changing brand identity (like home pitch’s name), Barcelona FC might confront the conflict from their fans - One possible red flag is the resignation of Barcelona CEO over disagreements on the deal Chief executive of the club, Ferran Reverter, resigned from the club after seven months in the role While the official statement notes “personal family reasons” as the cause for his departure, several sources report that Reverter had various disagreements with president Joan Laporta, the latest of which was the Spotify deal It is undeniable that Reverter plays a significant role in the club For instance, he was at the heart of the administration’s attempts to resolve the financial crisis it inherited Laporta once said that €159m had been cut off the wage bill and Reverter was one of those most opposed to Lionel Messi continuing at the club at a time when the wage bill was more than 100% of annual income Obviously, it was a wise decision at that time Therefore, Barcelona CEO’s resignation may be a big loss to FC Barcelona and the club might face some problems after he resigned 2.3 Solutions Solution for Spotify sponsor: - Spotify should invest in Barcelone FC on time to settle their formation down.Starting 2021/2022 season, Barcelona FC is shackled by more than £1bn of debt According to Barcelona's report, they have losses €481m for the 2020-2-22021 season That was around €200m higher than had originally been estimated Additionally, this financial crisis has deepened after LaLiga cut $349 million from their spending limit because of covid-19 pandemic Barca's limit for last season was €382m, while the season before that (prior to the pandemic), it was as high as €600m As for the financial crisis, Barcelona FC have offloaded players as a way to reduce expenses Therefore, the club was forced to let Messi - one of the best players away, which led to a drop in form Barcelona FC declined substantially, even having to play in the UEFA Europa League Under the terms of the long-term deal, Barcelona FC would collect revenue from Spotify’s funding Spotify might pay upto $310M to Barcelona for a sponsorship Barcelona FC could invest in qualified players to renew the form, which opens a bright window for the club - Spotify should deal with their own scandals unless the firm will have financial burden with sponsorship When some misinformation about covid 19 was announced, many famous artists denied to cooperate with Spotify by removing their playlist from this platform It will play havoc with financial issues of the 10 company Explaining and persuading artists to continually collaborate with Spotify is one way that Spotify should to stabilize the economy Solution for FC Barcelona - With the resignation of the ex-CEO, Barcelona FC had difficulty in organizational structures In order to success in whole company in general and sponsorship activities in specific, Barcelona need to stabilize their organization as soon as possible - Making a long-term plan to make fans adapt.According to the contract, from the start of 2021/2022 season, the club’s famous stadium will be renamed the Spotify Nou Camp – the first time it has ever bore a sponsor’s name This might cause conflict in social fans who got used to traditional symbols of the club With suitable approaches, Barcelona FC can not only keep loyal fans but also reach the general public who are at Spotify society despite being non-fan football - Spend time on negotiating the laws to keep troubles away.With signing a media contract, club, especially players must follow restricted rules such as not use other music apps Those rules might have negative impacts on the private life of player To prevent those effects, the club could deal with both players and Spotify to make reasonable conditions on the contracts III CONCLUSION After all, despite some possible risks, it seems like a great sponsorship deal for both Spotify and FC Barcelona as the benefits outweigh the risks This agreement provides the Club with "the essential financial resources to manage future strategic and sporting challenges", including exclusive benefits for members and supporters of the club such as better access to this music streaming platform and its latest features 11