Niyamath Parveez

No matter how hard working life is or the troubles at home, people put a great deal of importance on sport. Whether it is a team sport they participate in or as individual or even they just like to watch, sport is one of the best leisure activities that people can find and no wonder it is big business.

Even with the current economic downturn, people are still flocking to matches and events and the television coverage of sport has never been bigger. This has held to so much more money being pumped into the sport from various sources and the level of interest and excitement caused by sport is palpable. It is fairly obvious why companies are keen to become involved with sports advertising and sponsorship as it should allow them to gain access to so many potential customers. However, the economic downturn has caused a number of companies to reconsider their advertising strategy and sports sponsorship may be one of the areas badly hit by this decision.

It is easy to see that some consumers would be wary of a firm who has enough money to pump into sports sponsorship during a recession and this could cause bad public relations for many firms. Keeping a good public image has been another reason why many firms are looking to pare back their sponsorship activities.

One such firm that is looking to reduce their current level of expenditure with regards to sponsorship is Qantas. This news has caused consternation and panic in Australia where many sporting teams and institutions are backed by the airline giants. The big news of the week came when Qantas announced that they would be axing the sponsorship department that they run internally.

This means there is an uncertain future about what is going to happen to the vast amount of sponsorship money the company currently pumps into sport. It is said that Qantas put a figure in excess of tens of millions of Australian dollars into sports sponsorship, which is clearly a huge amount.

If even a notable percentage of this amount was lost, sport in Australia could be greatly affected as there is no guarantee that there would be a readymade replacement willing to make up the shortfall caused by Qantas’s decision.

The decision by the Qantas to outsource the running of their outsourcing department is likely to mean a few changes will occur when present contracts run out. Qantas as a company could be seen to be taking a few financial hits in order to generate better goodwill and awareness from consumers but whether an outsourced firm will take the same approach is unlikely.

One of the reasons that Qantas are looking to move to outsourcing with regards to their sports sponsorship department is the fact that there is a need to cut back on their expenditure levels. An outsourced firm will be able to look at the level of expenditure on a more independent basis and make decisions based on the bottom line as opposed to the goodwill factor that is created.