Sponsorship. Why is it done?

fox_mccloud2000

Active Member
Alright. I have to do a research project on sponsorship. I would like to know why it is done and other tide bits.

This research propoese to identify why companys or indivuals sell or opt for naming right (or something close to that). Will the company have increases revenues? And will it justify its self in the end?

OR

If spending money to sell your name (stadium names), will it come back as revenue? It is money well spent?

Thanks. Feed back is pleased.

-Matt-

Yes I'm in College. Year around college.
 

martininsocal

Well-Known Member
Sponsorship money is considered cheap advertising. The costs associated with television, radio, and print adds are far more expensive per viewer than placing a product identity on the side of a vehicle that will be exposed to the public simply by mere existence. It is cheaper to sponsor product to a race team or individual in exchange for sticker or paint identification than to advertise for 30 seconds during the superbowl. Sure, the viewreship of the superbowl may be huge, but it is a one time exposure and all exposures after that will cost additional funds. a sticker cost pennies and will viewed as long as the public has some exposure to the carrier. The sponsored product is tax deductible, whether it cost 5 dollars or 50,000 dollars. so actual cost is negligible.

If your gonna go, go BIG
 

farmboy

Well-Known Member
Do a search on this topic, there have been several heated discusions about sponsorship/ t.v. coverage in the last year or so.

Boy, Farm
 

JrSyko

Jerry Maguire
I think when it comes to off-road racing a lot of the trucks you see that are "sponsored" are really the company owners racing because it is a tax write off for them. However, the "real" sponsorships are usually done because it is a cheap and effective way to reach your target market. If you manufacture off-road shocks, the best way to reach your market and gain publicity is to put some of your stickers on a race vehicle that runs your shocks. That way people get a first hand look at your product.

See ya in the dirt!
 

frankh

Well-Known Member
There are a lot of IRS rules about sponsoring yourself. And they go after them. I know a guy that the IRS hit up to disallow 1mil in sponsorship money because the diver married his daughter.

Most of are sponsorship is because they are friends more than advertisement. At least in motorsprots.
 

JrSyko

Jerry Maguire
If I understand the law correctly, you can set up your race team as a corporation and then have your company sponsor that. That way it does not look like you are sponsoring yourself, at least on paper anyway. It also appears as an advertising expense that is tax deductable.

See ya in the dirt!
 
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