Why Vodafone Should Keep England Sponsorship

Nobody doubts the view that the recession has now extended to the real economy and that corporations outside the main financial service providers are faced with the need to make decisions on funding cuts. This places sports teams in a difficult situation as corporate sponsorship is essential for most sports. Among others, the Jamie Jackson reports in the Guardian that England cricket team suffered from the withdrawal of sponsorship by Vodafone, its main sponsor.

In spite of the argument presented on this blog here questioning the real benefits of corporate sponsorship following the decision by GM and Tiger woods to mutually agree to an end to a sponsorship deal, it is clear that Vodafone should retain the deal in a restructured form. The tenor of the blog post was that the structure of the sponsorship deals makes it difficult to ensure that both sides get real value. Taking forward that argument, I think that the corporations that are throwing aside sponsorships are being short sighted. These deals may be expensive in light of the financial strictures today but economic recovery is definite in the medium term.

For that reason, this is the best situation to renegotiate the sponsorship deals with the knowledge that the economy would recover. If I were to advise Vodafone or the corporations with businesses, it would be that they would look to reduce the absolute sponsorship size and lock in a longer term contract. In that way, Vodafone would get a better deal over the long term rather than wait for the economic upturn before coming back to the table when the England team may have more interested sponsors. To my mind, a sponsorship deal involving the England cricket could be sufficiently adjusted downwards to make it lucrative in the longer term.