Sponsorships On The Rise

Tour, festival and venue sponsorships are expected to increase this year to $1.04 billion, from $1 billion in 2007, according to IEG Sponsorship Report.

New efforts are creating larger sponsorship packages and deeper relationships for sponsors that may have previously been satisfied with one-off concert, venue or event deals.

Companies including Live Nation and The Festival Network are taking new approaches to music deals – modeling sponsorship packages after the worldwide Olympic TOP sponsorship program, for example.

"The shift away from one-off deals in favor of bundled packages by some of the industry’s major venue and festival owners should lead to significantly larger deals than the music industry has seen in the past," IEG Sponsorship Report’s William Chipps said.

LN’s announcement of a multi-year deal with Citigroup’s Citi Cards in February is just one case in point. Reportedly valued at close to $100 million, the deal gave Citi access to LN tours, pre-sale ticket offers, VIP packages, and opportunities for future venue naming rights.

But the live music sector is also seeing new injections of sponsorship money from companies not traditionally associated with music, IEG said.

Shoe company Crocs signed agreements with roughly 30 music festivals and venues including Milwaukee’s Summerfest, the New Orleans Jazz & Heritage Festival, Seattle’s Bumbershoot and Bonnaroo Music & Arts Festival.

Hankook Tire America Corp. announced a partnership with Eyeball Records last year, IEG said, that supplies tires for vehicles driven by the label’s touring bands in exchange for exposure on the company’s Web site and bands’ MySpace pages.

Major League Baseball has jumped on the music sponsorship bandwagon again with its traveling MLB Road Show trailer that includes batting and pitching cages and video game kiosks.

MLB signed on for events and tours this year including Bonnaroo, Virgin Festival, Sasquatch Music Festival, South By Southwest music and media conference and Projekt Revolution.

Projekt Revolution’s Michael Arfin explained in a statement that the partnership helps cut costs for fans.

"The relationship with MLB and all of our partners is very significant as it helps to absorb additional costs, therefore allowing us to create an all-day experience for the fans while keeping ticket prices at a reasonable level," he said.

Other notable deals of late include Lexus’ sponsorship of Alicia Keys’ tour, Kia Motor America’s Vans Warped Tour sponsorship and Time Warner Cable’s naming rights agreement with the former Walnut Creek Amphitheatre in Raleigh, N.C.