As much as $3bn worth of sports sponsorship deals with insurance companies could be at risk as a result of COVID-19, researchers say.
Insurance companies have committed to spending billions on sponsorship agreements over the next decade and the impact of the pandemic could be “profound” as events are shelved.
GlobalData’s Sportcal Intelligence said more than 255 insurance brands are involved in sponsoring sporting properties.
The brands provide over $700m in revenue annually – and while most are reluctant to withdraw that funding, the longer the pandemic continues, so too does their risk of doing so.
Conrad Wiacek, Head of Analysis and Consultancy at GlobalData’s Sportcal, said: “While financial services in general, and insurance specifically, do not set the pulses of sports fans racing, they are a crucial component of the sports industry, providing significant financial muscle.
“With insurance companies accounting for some of the largest deals in sport, all have been impacted in some way by the decimation of the sporting calendar.”
Wiacek said one of the biggest “front of shirt” deals in the English Premier League is AIA’s deal with Tottenham Hotspur, worth $49.8m, while the likes of Allianz and State Farm will be hoping to fulfil their deals with the Olympic Games ($25m per year) and the NBA ($30m per year) respectively.
He said: “From the naming rights to venues such as the MetLife Stadium deal – worth an estimated $19m in a deal set to run to 2036 – to the likes of Allianz spending over $90m across its 31 deals and committed to spending $647m post 2021, the insurance industry’s commitment to sport is significant.
“As a result, any sort of government pressure on the industry to honor insurance claims resulting from COVID-19 will likely see this sponsorship spend reviewed.”
Wiacek said that with over $3bn committed to sponsorship agreements post-2021, where before insurance firms where seen as “a safe pair of hands” for any sporting organisation looking for a sponsor, the insurance sector may be “a far more risky” proposition in the short-term.