Fun with Numbers: Talent Fees, Interest Rates and Fraudulent Research

While numbers lie at the heart of all brand partnerships with sports and entertainment properties, three figures from this week’s news stand out for their potential impact on sports marketing and sponsorship: 10 percent, 50 basis points and $151.4 billion.

The University of Tennessee announced it would add a 10 percent “talent fee” to the cost of its football tickets next season in anticipation of the need to start sharing revenue with athletes.

Many other schools will look to pass along some of the costs of paying players to the fans who enjoy watching their games, even if the surcharge comes at a different rate or in a different form than the Volunteers’ fee.

For current and prospective college sports partners, this creates an opportunity to make themselves truly relevant to a school’s paying fans. By positioning their revenue contributions to the school’s athletic departments as a way to limit the amount ticket-buyers could potentially be on the hook for, brands can stake a claim to being fan advocates as well as school supporters.

It’s even feasible that sponsors of smaller programs could seek to use their payments as a way to eliminate the so-called talent fees.

For example, if MAC football champions Miami University sought to emulate Tennessee and impose a 10 percent surcharge on ticket sales across all sports, it would raise about $160,000 based on the school’s FY23 ticket revenue of $1.56 million. For an incremental low-six-figure investment, a current or future RedHawks brand partner could become a hero to fans by promoting that it “paid the price for you.”

(In case you’re wondering, the equivalent cost to do that at Tennessee would be a prohibitive $4 million.)

The U.S. Federal Reserve cut interest rates by 50 basis points (half a percent) in a move to boost the economy and protect the job market. One of the primary outcomes is an expected increase in home sales as mortgage loans become more affordable.

A rebound in the housing market portends rejuvenated sports marketing activity from mortgage lenders/brokers, real estate agencies and related categories including home goods and furnishings.

As Adam Grossman wrote in his JohnWallStreet column: “If sports properties and rights holders wisely anticipate a robust housing market, they can proactively pursue partnerships with residential real estate platforms (e.g., Redfin) and/or brokerages (e.g., Compass) that would value interactions with fans before, during, and after their impending moves.”

Sponsorship sellers should move those sectors and others related to housing higher on their prospect lists in light of the Fed’s actions and in preparation for expected additional rate cuts before the end of the year, next year and into 2026.

Allied Market Research forecast that the global sports sponsorship market would grow to $151.4 billion by 2032. The problem is that by all appearances and a quick Internet search the company is not a reliable source of legitimate data.

Information on marketplace growth and trends can be valuable to both buyers and sellers, but it needs to be credible and fact-based. With plenty of actual research and data firms supplying quality information on our industry, consider this a reminder to check the source before relying on any figures published in a press release or worse, plunking down $5,730 for a 250-page report from a questionable supplier.