What Is Sponsorship?

THE CREATIVE ATHLETE

Issue 35 -- What Is Sponsorship?

Sponsorship is money given to an athlete to underwrite training and living expenses. Being sponsored is the way many full-time athletes survive in sports that don't pay salaries or offer serious prize money.

The term sponsorship is a broad one which covers a range of financial arrangements:

1. Private sponsors.
Sometimes when athletes say they have sponsors, they mean wealthy fans who provide some or all of their financial support. There is usually no business arrangement between them. Most sponsors become involved because they want to help out promising athletes, not because they expect a tangible return. Their payback is the sense of satisfaction they receive by contributing to an athlete's success.

Until 1988 Olympic athletes were very limited in the amount of money they could earn. They could not accept endorsement, prize, or appearance money nor could they sell their services as corporate spokespersons, professional competitors, or coaches. This meant they were limited to funds they could earn from outside jobs, collect from family members, or solicit from boosters.

There are many more opportunities for athletes to earn money now, but private sponsorship still plays a role. It continues to subsidize young athletes in sports which are not underwritten by schools, community recreation programs, or private clubs. For example, figure skating is so prohibitively expensive that many skaters have depended upon help from private sponsors. Coming up with the $20,000 to $50,000 it takes each year to pay for a skater's expenses is simply impossible for most families. Examples of private sponsorship:

James Annenberg Levee is a tennis patron. He follows the pro tour and hands out $50,000 gifts. He likes to shower money and presents on female tennis players who have caught his attention. That list has included Steffi Graf, Monica Seles, Jana Novotna, Arantxa Sanchez Vicario, Conchita Martinez, and Mary Joe Fernandez. He estimates that he gave Graf $750,000 in cash and gifts, including two Porsches.
A group of businessmen sponsored speedskaters Dan Jansen, Eric Flaim, and Nick Thometz from 1989 to 1992. Each received $25,000 a year from a group of nine businessmen. In exchange, the investors were to receive a percentage of the skaters' earnings. (1)
Roger Dawes, a meat distributor, coaches and pays for the Redding California Rebels women's fast-pitch softball team. "Every man has a hobby. This is mine." (2)
Famed track star Carl Lewis and several teammates held a dinner and clinic to establish a $25,000 fund, the Carl Lewis Challenge, to cover the living, training, and travel expenses for a group of athletes hoping to make it to the 1996 Atlanta Olympics. One of them, Jenny Spangler, won the U.S. women's Olympic marathon trials. "Carl has done this sort of thing before, where he's given money out of his own pocket to help athletes, but this time he wanted to expand it and make it an ongoing project. Not much has been done to help some athletes who have a chance to make the Olympic team," said Joe Douglas, who coaches the Santa Monica Track Club. (3)
Jeff Johnson, who worked for Nike for many years, established The Farm Team, which provides training and travel expenses for a group of middle-distance runners training for the 1996 and 2000 Olympics.
James "Ding" Schoonmaker has been involved with and financially supported sailing for many years. He helped to set up a training center in Miami, has given U.S. Sailing $100,000 over the course of two decades, and in 1990 established a $150,000 endowment. He also gave Ivan Riano, a teenage refugee from Cuba, a $3,000 Laser sailboat when he heard about Riano's sailing aspirations.
Dennis Hopkins, a real estate zoning consultant based in Fort Worth, Texas, had a cycling team. "For about six years I sponsored and coached a women's international cycling team. I developed it from scratch and eventually it became the top women's team in the world.

"We had women from New Zealand, France, Canada, Sweden and the United States. We had several Olympians and a world champion on the team." (4)

Billionaire Ross Perot helped leg-amputee sprinter Tony Volpentest obtain high-tech leg sockets and paid for his training expenses for the year leading up to the 1996 Atlanta Paralympics. "I got a chance to meet him after the '92 election, and he said if there's ever anything he could do to help me out, let him know," said Volpentest. (5)

It should be pointed out here, however, that money should not blind an athlete to an unhealthy situation. One highly publicized example:

John du Pont gave considerable money to both USA Wrestling (more than $500,000 a year) and individual athletes. He was the sponsor of the U.S. National Freestyle Championships and the Freestyle World Team Trials, both named after him. He also paid top wrestlers up to $ 1,000 a month above their USOC stipend and housed several athletes at small guest homes on his estate, where he built $600,000 state-of-the-art training facilities. Sometimes as many as 50 wrestlers would train there. He also transported athletes to competitions in a Lear jet.

In 1996 he shot and killed one of the wrestlers he sponsored, Dave Schultz, who lived with his family on du Pont's property. Schultz had been there since 1988, served as a coach, and earned at least $75.000 a year.

Du Pont was known for erratic, even threatening, behavior, but he was tolerated, some say, because he had become such an important source of funding in a sport often cash-poor. There were, however, those in the wrestling community, such as University of Iowa coach Dan Gable, who warned athletes not to live there.

Another warning: depending on how the deal is structured, sponsorship can result in loss of amateur status. Increasingly young tennis players and their families are approached by backers who want to fund them in exchange for a percentage of future earnings. Two examples:

Tennis player Maggie Cole turned pro in 1991 at age 14 because her father wanted her to be able to accept funding from an investor. During her 18-month pro career, she played in 16 tournaments, often failing to get out of the qualifying round. She won a total of $550. In 1993 her parents divorced, her father moved away, and Cole went back to high school. The U.S. Tennis Association and the California Interscholastic Federation reinstated her as an amateur, so she assumed she could get a college athletic scholarship. The NCAA, however, said that since she had accepted the investor's money, she was not eligible.

After an appeal to the NCAA in 1994, including a statement from a sports psychologist who said Cole's father forced her to turn pro, Cole was ruled eligible for a scholarship (although she would have to sit out her freshman year).

Said Ernie Griffin, the NCAA faculty representative for San Diego State, the university which filed the appeal on Cole's behalf, "I think the (NCAA) staff did exactly what it should have done. They are not the ones to set a precedent. But the eligibility committee can set a precedent, and it did. In this case . . . I'm quite sure it was because of the age that the individual turned pro.

"We argued that an individual of that age -- given the intellectual ability -- can't be expected to know exactly what is happening. To hold them responsible for those decisions seems a little harsh." (6)

Carlo Sarmiento was a promising Bolivian tennis player living in California. A sponsor signed the then-14-year-old Sarmiento to a five-year contract. Said a tennis coach who had worked with Sarmiento, "[The sponsor] paid for a few of Carlo's trips early on to whet their appetite. The bottom line is, he wanted to hold onto the kid to see if he was going to make it, so he could make some money. Now that he sees the kid might not make him any money, he doesn't want to follow through with the commitment.

"I coached Carlo for 18 months and was never paid a cent. [The sponsor] wrote me three checks and they all bounced."

Sarmiento's father added, "His sponsor told us he didn't have time for school with all the travel. He promised me he'd get Carlo a tutor, but he never did." George Sarmiento said other offers had come in for Carlo but they couldn't take them because of the contract, which they were trying to break. (7)

By 1995, Sarmiento had quit competitive tennis.

2. Corporate sponsors.
Professional athletes competing in non-salaried sports usually have most of their training expenses underwritten this way.

Corporate sponsorship and endorsement deals are similar arrangements. In both cases athletes receive money and the companies who pay the athletes receive publicity. The difference is that sponsorship implies the company is helping to cover training expenses, while endorsement does not. In other words, sponsorship suggests that the company and the athlete are, at some level, a team; endorsement suggests that the athlete is a company spokesperson or a business representative. Of the two arrangements, the endorsement deal is the more prestigious. A company might sponsor many promising athletes, but only hire one or two of the more famous ones as spokespersons. Examples:

Sprinter Holli Hyche, who in 1994 set the national collegiate record for the 200 meters and who won seven NCAA titles in her last two years competing for Indiana State University, signed a sponsorship deal with Adidas in 1995. The company paid her a salary of more than $25,000, plus covered her expenses and equipment. (8)
A group of over-60 cyclists competing in the Race Across America were sponsored by Secure Horizons, the national's largest health plan for Medicare recipients. (9)
Chiquita sponsored George "Banana" Blair (an 83-year-old champion barefoot water-skier) known for giving away bananas to his fans. Chiquita contacted him, asked what it could do for him, and was told he would appreciate free bananas. They began supplying him with two tons a year, shipped to exhibition sites all over the world. (10)

3. Team ownership.
In some sports, most notably professional cycling, corporations sponsor entire teams rather than individual athletes. The team competes under the corporate logo. This type of sponsorship closely resembles an employer-employee relationship where athletes are in essence being paid salaries.

Some corporations sponsor athletes in sports which have no direct connection to their products (e.g., Seven-Eleven and Motorola have both sponsored cycling teams) and others sponsor teams they have created specifically to promote their products (e.g., Rollerblade has an inline skating team).

Team sponsorship can be a very expensive proposition. Two examples:

In 1991, the New York Times reported that sponsoring a cycling team cost about $3.5 million to $6.5 million a year. A team would include at least a dozen riders and a dozen support staff including an athletic director, mechanics, massage therapists, a team doctor, and a publicist. (11)
In 1995 Outside magazine reported that to sponsor Miguel Indurain's cycling team (Indurain was the most famous cyclist in the world, having won the Tour de France an unprecedented five consecutive times), it cost approximately $11 million a year. His team included two dozen cyclists and a couple dozen support staff members. (12)

Some other team sponsorship examples:

The oldest elite women's softball team, the Brakettes, was sponsored for years by Raybestos Products Company. Each summer the company paid for the players to come to Stratford, Connecticut where the team is based, provided housing and part-time jobs during the season, and covered traveling expenses. The sponsorship ended in 1996 when Raybestos moved to Crawfordsville, Indiana. (13)
US West sponsors its own track club. In 1992 it had four members who were hoping to qualify for the Olympics. Not only did they train full-time, they also worked for the phone company (30 hours a week for 30 hours of pay). US West contributed approximately $50,000 a year in sponsorship fees and in exchange received not only publicity, but also good employees. "What we get out of this are goal-oriented people, who work with self-discipline, are used to success and bring that into the workplace," said Jack Beattie, vice-president and controller of US West marketing research group. "This is what we're looking for in US West's future leaders." (14) In 1996, five US West team members were training for the Olympics.
In 1990 Visa began sponsoring decathletes. By 1992 the company was paying for training, equipment, coaching, and travel expenses for 10 athletes including Dan O'Brien and Dave Johnson (who were dependent on Visa's help until Reebok used them in a series of ads). In 1995 the Visa Gold Medal Decathlon Program was paying for two annual technique clinics, regional meets, travel and training expenses, and access to sports-medicine specialists. Team members were paid between $110 and $900 a month and received performance bonuses. (15)
In 1972 Mission Viejo, a housing development company in Southern California, agreed to sponsor the local swim club, the Nadadores. The company agreed to pay travel expenses for any club swimmers who qualified for the national championships. Said Mark Schubert, the coach who started the program, "When I first brought up the idea of them paying for trips to the nationals, I'm sure they considered it a very remote possibility, but they always paid, willingly and enthusiastically." In 1976 five club swimmers went to the Montreal Olympics. In 1980 Mission Viejo paid housing and meal costs for 60 club swimmers at the Olympic trials. The company even underwrote the cost of sending plane tickets to unattached college swimmers so they could compete as Nadadores in the national championships. Said Schubert, "We took a lot of heat for that, but most of them came out and swam with us in the summer. It was always my intention to have the better college kids training with better high school kids. Racing against college swimmers in summer was a key factor in our younger swimmers' superior results." (16) The sponsorship arrangement ended in 1988 when Mission Viejo became a city and took over the swim complex.

Teams should be aware, however, that sometimes they are required to sign non-compete agreements which may hamper future sponsorship deals. When Coors ended its six-year sponsorship of the Coors Light Cycling team, a non-compete clause prevented the team director from entering into a sponsorship agreement with another brewery for a year. (17)


1 (Minneapolis) Star Tribune, February 2, 1992. 2 The Wall Street Journal, August 24, 1993. 3 Los Angeles Times, February 26, 1996. 4 The Fort Worth Star-Telegram, February 11, 1997. 5 (Minneapolis) Star Tribune, December 6, 1996; Chicago Tribune, May 4, 1997. 6 Los Angeles Times, October 23, 1994. 7 Los Angeles Times, June 21, 1994. 8 The Indianapolis Star, February 27, 1995. 9 USA Today, August 1, 1995. 10 The San Diego Union-Tribune, May 31, 1992. 11 The New York Times, July 27, 1991. 12 Outside, July 1995. 13 The Wall Street Journal, August 24, 1993. 14 The Denver Post, June 20, 1992. 15 Runner's World, September 1995. 16 Los Angeles Times, September 4, 1997. 17 The Denver Post, September 8, 1994.

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