Sponsorship Essentials: Q&A w/ Thomas Wills, CEO of BWA

By: Claire Lingley 

Thomas Wills is the President and CEO of Bonham/Wills & Associates.  By 30, he was heading up one of the bigger players in the sponsorship, valuation, and negotiating world.  Today, in part one in our series, "Sponsorship Essentials", he sits down with us and lends us valuable insight into the sponsorship and naming rights industry, (all done in 10 minutes or less).  

Q:  How did you get into this business?

A:  Out of university I had the unique opportunity to work with an industry professional, that being Dean Bonham, who has been a titan in the naming rights world for the last 30 years.   He brought me on to work on 2 projects, one of which being a project in Ottawa and the other with the University of Pittsburgh.  And really, it just grew organically from there.  Although my background was medical sciences, I was able to use a lot of the process information that I learnt during my studies in our valuation and analysis system.

Q:  Any advice for someone trying to enter the business?

A:  Know your market, and understand that it is a business and that it is not just sports.  A lot of people enter the sports industry with the idea they are going to be working in player personnel.  At the end of the day, that is not the case.  This is marketing, this is sales, this is a business.

Q:  BWA specializes in negotiations, any tips for when you’re entering the room?

A:  Listen.

Q:  Anything else?

A:  Keep listening!  Also, it is key to understand from the onset of any negotiation that the most successful negotiation is one in which both parties leave satisfied.  You will not have continued success in this industry if you try to have one over on the opposing party.  Finding the best, fair, and most creative solution is always the goal. 

Q:  Where do you see naming rights going in the next 5 years?

A:  In 2013, we predicted that naming rights were going to spike in 2018 through 2022.  We still believe this.  And now we have a prediction that naming rights are going to continue to move out of the traditional sports and entertainment venues, and into more cultural and municipal properties. Furthermore, collegiate naming rights are going to increase, with brands expanding their reach with full-bodied packages that interact with students, fans, alumni, etc., enhancing fan experience and further assisting corporations in growing their revenue.  The days of just throwing a corporation's name on the side of the building will soon be behind us.  

Q:  Any inside scoops on untapped markets?  You mentioned cultural and municipal properties, what’s one type of property that you think would be great for naming rights and hasn’t been discovered yet?

A:  I think transit systems are going to peak.  People use these systems every day, and there is a lot of room and potential for naming rights within that industry to grow and expand.  I think corporations are going to integrate their technology and enhance the experience of users on a day-to-day basis, which will in turn drive sales and revenue for that corporation.

Q:  What’s the best piece of advice you’ve ever received?

A:  There’s a saying out there, and I’m not sure how it goes, but I’m a true believer that success is 90% about luck.  The more I work, and the harder I work, the more luck I seem to have. 

Q:  Last question, statement tie or statement socks?

A:  Statement socks.

Meeting in the Middle

In sponsorship, no great partnership comes full circle without a very important contract. How do corporations and properties come to the terms of agreement?  

Negotiation

The Negotiation phase is one of the most critical stages when forming a successful partnership.  When you think of the meaning behind Negotiation, some may tend to lean towards the idea of a “win/loose” outcome.  This idea may indeed be relevant in the real estate market, automotive sales or company buyouts/takeovers. But when it comes to creating a long term partnership within the sponsorship realm, no matter what side of the table you are sitting on, it is imperative that the “negotiation process” is a discussion utilized to build the strong foundation needed to support the relationship for years to come.  Unlike buying a car, once the deal is made, in order for both parties to benefit, everyone needs to be moving in the same direction.  Each party is trying to gain and add value symbiotically and simultaneously.

What is so appealing about creating these long standing partnerships, especially within the Sports and Entertainment world, is that the negotiation process can become very creative.  BWA, alongside our partners and clients alike, are consistently pushing the boundaries through innovative offerings strategically specified to the brand/property/deal at hand. We know what is going to benefit not only our clients but the potential partnership as a whole.

Before entering into negotiations you must identify the needs assets and benefits of each individual party.  Contracts can be very long and complicated but the negotiation process should be fairly painless if the partnership is a good fit. Both groups should enter with realistic goals for pricing, planning and lead times. It is also imperative to have a strong understanding of contra vs. cash and what benefits, rewards or downfalls each method/offering may present itself to the corporation or property.

As a sponsor, don’t see the property or opportunity as an original offer or nothing at all.  Seek out opportunities or even create your own, utilizing the information you have. Target markets always come first! What type of impressions are relevant to your target markets?  Are there any additions would you like to make to the offerings that will align with your marketing goals? Do you see any unidentified assets that will add value for your brand?

As a sponsor seeker, It is in best practice to have all assets valued before entering into sales and especially negotiations. Only offer what is relevant to your potential sponsor.  Impressions/assets on properties or during events, if not executed smartly, can cross the line of over kill exposure, the last thing you or your sponsor wants to do is to put off fans/attendees and potential consumers with a bombardment of advertising.  Essentially this type of overexposure at a venue can devaluing both the property and brand.  Get to know your potential partner, identify those specific assets that will apply to their business model/directives and start from there.

The way we see it, is that if you can provide an offering that will help your potential partner achieve a goal, and there is no expense/downfall to you, than in good faith provide every opportunity you can, and expect the same in return. This negotiation and should also leave room for updates and allow the partnership to evolve and grow through the length of the term. Moving and shaking with the rapidly changing industry and environment is essential for long term success. If you develop the right relationship with your partner through the initial negotiation phase, your groups should have no problem moving forward successfully in this ever advancing industry, creating increased brand awareness through sponsorship. 

$$$ Dollar for Dollar $$$

 Viewing sponsorship as a cost-effective method of achieving specific marketing objectives, has been the driving factor behind the dramatic increase in Naming Rights over the last decade. Sponsorship marketing is particularly valuable because of its effectiveness in introducing new products, helping new or established products contend with competitive brands, and increasing corporate brand awareness. Increasing brand awareness is a primary factor behind a significant sub-trend within the sponsorship industry over the last several years. It has been proven that "Dollar for Dollar" Naming Rights is the best investment a corporation can make.

Corporate Benefits

• Enormous brand exposure
• Strong connection to iconic civic facility
• Demonstrate commitment to community
• Increase sales through direct access to property's audience and prime hospitality opportunities
• Ability to target specific demographic groups/audience
• Credibility (sponsorships have greater credibility than straight advertising)
• Interactive marketing platform

Property Benefits

• Generate immediate and annual revenue
• Build image/profile of property through linkage with prestigious corporate entity
• Create marketing synergies for an expanded marketing reach
• Eliminate various line-item expenses

General Naming Rights Benefits

• Impactfull branding exposure
• A prestigious association with the property and its tenants
• the ability to rise above the advertising clutter normally associated with sports and entertainment properties
• The opportunity to pre-empt a company's competition from an association with the property 
• The potential for lucrative direct and indirect business relationships 

Naming rights occupy the highest point on the sponsorship pyramid and typically carry with them a number of major benefits for all parties included. This is why we will continue to see these investments increase across industry categories, sports and entertainment venues, events and properties around the globe.