Spotlight on GCSE Business: Sponsorship

The French footballer Kylian Mbappé has been in the international news this week but not for his footballing skills. Mbappé is sponsored by a number of Chinese businesses that have terminated their contract with the footballer following what they deemed as being offensive content in a recent interview.

But what is sponsorship? And how can it affect a business when things go wrong?

Sponsorship

Sponsorship is a type of promotion used by businesses to encourage potential customers to purchase their products. Specifically, a business donates money to an event, team or individual in return for displaying their name, logo or image on their product. Football teams will often wear football shirts displaying names or logos of companies, for example.

One popular type of sponsorship is where businesses sponsor successful athletes. For example, Carlos Alcaraz, the former number one tennis player is sponsored by Nike, BMW and Rolex among others. The companies benefit from brand exposure, increased brand awareness and potentially increased sales.

When sponsorships go wrong

The risk for businesses sponsoring an event, team or individual is that bad publicity of the event or individual being sponsored will tarnish the business' image, potentially doing more harm than good. Of course, businesses will aim to sponsor well respected, high profile positive role models. However, bad publicity remains a risk. This is what has happened this week in relation to Kylian Mbappé.

Captain of the French national football team, Mbappé currently plays for Real Madrid and is one of the top footballers in the world. He is also one of the highest paid athletes. He earns a significant amount of income through sponsorship. Indeed, Mbappé was first sponsored by Nike when he was just 9 years old.

However, in the last few days, Kylian Mbappé has seen several of his sponsorship contracts with Chinese companies terminated, following an interview where he talked about laughing at a meme of a Chinese dictator. This was not well received in China or Chinese communities and resulted in businesses cancelling their association with the footballer.

Dongpeng (beverages), Mengnui (dairy) and Milkground (cheese) are all companies who immediately announced their decision to end their sponsorship agreements with Kylian Mbappé, citing that they opposed words or actions that hurt national sentiment. In circumstances such as this, businesses do not want to be associated with someone who is unpopular or receiving bad publicity as it could impact on the business themselves. For example, might people stop buying Dongpeng drinks or Milkground cheese if these companies continued sponsoring Kylian Mbappé?

When things like this happen, companies will often act quickly to attempt to protect their business.

Although, Mbappé has since apologised it may not be sufficient to retain or regain his sponsorship deals.

GCSE Business: Sponsorship

In GCSE Business (Edexcel) we explore sponsorship as a type of promotion a business may adopt. There are many potential benefits that sponsorship of teams, events or individuals may bring to a business. However, it is important to be aware of the risks and potential downsides of sponsorship, such as where there is bad publicity.

Key Terms

Promotion	Methods a business uses to encourage potential customers to purchase their goods or service.
Sponsorship	A business donates money to a team, event or person in return for their name or logo being displayed.

Free downloadable Key Terms document to support GCSE Business (Edexcel) is available under Business Resources.