Is there such thing as a bad sponsorship?

Much like funding, sponsorships are another avenue for teams, tournament organizers, and even streamers to raise the money they need to continue doing what they do. What is the point of sponsorships, who stands to gain from them, and how do they work? 

What is an esports sponsorship?

An esports sponsorship is when a company gives financial support to an entity like an esports organization or tournament sponsor. These sponsorships are most commonly seen as brand logos either on the players’ jerseys or somewhere on-screen during a tournament.

When sponsors offer their money to a specific entity, they are usually looking for some kind of exposure. Having their logo somewhere visible during an event leads to brand recognition by consumers and a possible increase in that sponsor’s sales. 

Why do teams, tournament organizers, and leagues want sponsorships?

The relationship between sponsors and the entities they give money to is a mutually beneficial one. When teams receive money from a sponsor, they can invest in better players and expand into more games. Tournament organizers use their sponsor money to host bigger and better events. 

Having big-name sponsors on your jerseys or at your event can also attract other sponsors to invest in your entity. It’s like a snowball rolling down a hill. The more it rolls, the more snow it piles on itself. Same with esports sponsorships, the more sponsors you have, the more sponsors you will attract.

With esports being an ever-growing space, sponsors know that the exposure garnered will boost their brand as well. Endemic brands, meaning companies that sell products related to esports like HyperX and Intel, have seen their names become staples in the esports market, and their sales boosted.

Even non-endemic brands like Tinder, M&M’s, and Volkswagen have made their way into esports to promote their products to an audience that is different from the one they might attract through outlets like TV and online ads.

What would lead to a sponsorship becoming detrimental to an esports partner?

For non-endemic brands, the esports space is an unknown market. Many are uneducated on the right way to enter the market, which can lead to big mistakes that make the brand look bad in the eyes of esports fans.

An excellent example of this is the Bud Light All-Stars promotion. To sum it up, Bud Light ran a promotion back in 2016 where fans would vote on which of twenty players across five different esports games would become Bud Light All-Stars. That title ended up meaning nothing for the players or the brand, and the Bud Light name was quickly forgotten in esports.

Brands must do more than just slap a logo on a jersey and call it a day. James Burden, the CPO of esports data platform GEEIQ, put it well when he said, “there’s no consideration of what is the content that’s going to go out throughout that period of sponsorship. That’s really where the views are driven from.” This means that brands that work together must release content that showcases the work they do.

Back in July of 2020, smartphone manufacturer OnePlus renewed its partnership with global esports brand Fnatic. The way they made that partnership work for both teams is a noteworthy example. The two will focus on “scouting mobile talent across Europe and North America to amplify mobile gaming around the world” and will continue integrating Fnatic Mode, which is essentially a gaming mode on OnePlus smartphones.

This integration works for Fnatic because they already host a team in PUBG Mobile, and it works for OnePlus because they create smartphones with a built-in game mode. Both brands thus earn something beneficial to what they create.

Can an esports streamer survive without sponsorships?

Apart from teams and brands, esports streamers are also a popular recipient of sponsorships. Whereas the former pretty much depend on sponsorships to exist, streamers have alternate means of revenue.

They can receive Bits on Twitch, set up Patreon accounts, or just accept donations from their viewers. It’s interesting to see the differences in funding avenues that are available to those involved in esports. Streamers have the most options for raising money, whereas teams and organizations are more limited and have to rely on other people.