WTA and NASCAR News Suggests Positive Change Ahead for Sponsors and Properties

Whether it’s the natural thing to do with spring right around the corner, or it’s a reaction to the bleak headlines of the day, it seems everyone is looking for signs of hope wherever they can find them.

Two sports business developments last week indicated shifts in attitude that could prove beneficial not only to the brands and rights holders involved, but also the broader industry.

The first came with the announcement that medical device and diagnostics company Hologic had become title sponsor of the WTA Tour.

Beyond the significance of one of the world’s premier women’s sports properties securing its first title sponsor in 11 years, the context of what helped spurred the deal—namely the tour’s bold step of standing up to China—revealed a refreshing attitude from a corporate partner.

As we have seen amid recent controversies involving the Beijing Winter Olympic Games and other events, sponsors typically want to avoid involvement in anything that requires taking a stance on geopolitical issues.

Such arguably justifiable corporate conservatism would not have seemed to bode well for the WTA as it searched for a title sponsor while suspending all of its Chinese tournaments in response to concerns over the treatment of tennis star Peng Shuai.

But rather than scare off Hologic, the tour’s position was a “catalyst” for the conversation around the deal, which was initiated in December, according to the company’s senior vice president for global human resources and corporate communication. Speaking to The New York Times, Hologic’s Lisa Hellman said:

“We’ve been watching very closely some of the brave and really high integrity moves that the WTA has made almost by themselves. And that brought to our attention both the potential need they may have for title sponsorship, as well as really wanting to stand with and support the stance they are taking despite really negative impact on their business. It put their calendar at risk. It put a huge audience at risk, but they stood up for what they believed to be right and stood up for their players and therefore, by extension, the voice of women throughout the world.”

While such a statement would have been easier to make for a company that doesn’t do business in China, the country is a “growing market” for Hologic, Hellman said.

Although it’s just one example—and the long-term impact is of course unknown— Hologic’s stance could signal to other publicly traded multinational companies that they don’t need to shy away from controversy, and in fact may be better off embracing it.

The second report involves discussions within NASCAR about potential changes to the way revenue is split among the sanctioning body, tracks and teams.

Although a decision is not likely for quite a while, the raising of the issue by team owners—especially new breed organizations such as Michael Jordan’s 23XI Racing—could lead to a business model that would make teams less dependent on sponsorship for the vast majority of their revenue, a situation that would benefit both sponsors and teams, and ultimately the sport itself.

NASCAR has long been an outlier among major leagues in sharing only a small portion—25 percent—of its media rights revenue with teams, especially considering that unlike franchises in other leagues, race teams don’t have the opportunity for their own local media deals or ticket sales.

This has put disproportionate responsibility on sponsors to fund the vast majority of team operations, an uncomfortable situation brand marketers don’t face in other sports partnerships, where sponsors typically account for less than 20 percent of total revenue.

It remains to be seen how open NASCAR is to adjusting its longtime formula, but it would be more than wise to consider such a move that could improve long-term sustainability for all its stakeholders.