Eintracht Frankfurt announced the new contract to sponsor its stadium, after Klaus Felbery, CEO of Werder Bremen club, recently said that he was close to signing a contract with an “existing major sponsor”.
Frankfurt and Bremen, which are competing with the Bundesliga, seem exceptional, with few sponsors wanting to commit to new sports deals today.
“We naturally regret the effects the Corona crisis has had on sport,” said Stefan Altthoff, president of the S20 Association of German Shepherds.
“At the same time, members discuss potential scenarios individually and imaginable options for each of their partnerships regarding the consequences of the Corona virus,” Althoff added.
Sponsors are affected by the virus, which has killed thousands around the world, at least on two levels.
First, they do not know when their clubs and players will be allowed to resume public relations work during the stopping period of sports activity in most parts of the world.
On the other hand, they may be harmed by the crisis itself as commercial enterprises.
While the damage will be less on the supermarket chain as people continue to be able to shop for groceries, the situation is quite different for sports betting companies or luxury retailers to be closed.
Companies that are part-time and have to provide money where possible are likely to reduce their sponsorship activities today, as it will be difficult to persuade their anxious employees to pump money into the sports sector.
Manfred Schwabel, president of Unterhaching, the German third-division rival, outlines what many sponsors think today.
“Care is a luxury – employees’ jobs and of course their health should be an absolute priority,” Schwabel said after Frostkron Tefkwilkost, the main sponsor of his club, broke the contract before its end.
But can the current crisis provide care opportunities?
“Bundesliga still has the potential to attract investors. As the club’s main sponsor, for example, you can bring a face mask to the market,” said Christoph Breuer, professor of sports economics at the German Sports University in Cologne.
“Football is the sport most attractive to sponsors. Football and Bundesliga are likely to suffer from this crisis less than smaller sports,” he added.
Frankfurt and Bremen may feel financial stability now, but Borussia Monchengladbach, who also plays in Bundesliga, is looking for a return to activity as soon as possible after the current suspension ends on April 30, as playing without an audience will help reduce the financial impact.
“Practically speaking, sponsorship alone will reduce the damage by about 70% compared to the ending scenario of the season today,” Guido Ohli, director of care for Gladbach, told the club’s official website.
A return to some kind of normalcy will also help solve another problem for Gladbach, who is looking for a major sponsor for the next season.
“Some of the negotiating partners asked us to suspend the talks at the moment, for understandable reasons,” Ohli added.
Perhaps Gladbach will not be the only one suffering from this problem, according to “Sponsors” magazine on sponsorship news, about 20% of the most important sponsorship contracts in the first and second parts of German football will expire after the 2019/20 season.
“It can be expected that the demand for care will decrease temporarily, as well as pay less for sponsorship contracts,” German economist Christopher Breuer said.
Even so, Brower believes the contraction is unlikely to continue, assuming the retreat of the Corona virus.
“Once the economic situation improves, everyone will probably recover again,” Brewer explained.
Sports teams should hope that Frankfurt’s announcement of a new sponsor will not be the only major sponsorship deal this year.