Applying the mars method to the sponsor contract negotiations

ABSTRACT

Sport is nowadays an important part of social and economic life. It contributes to economic growth and employment, increases expected life span of people and facilitates better lifestyles. It also helps to avoid healthcare costs. In 2020, the global sports market was valued at nearly US$388.3 billion with yearly growth averaging at 3.4% (since 2015). However, it must be emphasised that the market value fell from US$458.8 billion in 2019 at a-15.4% rate. The lockdown and social distancing norms as well as economic slowdown due to the COVID-19 is found to be the major reason for this decline. Though, the market is expected to revive and reach the value of nearly US$600.0 billion by 2025, and by 2030 – US$826.0 billion. The sports market is divided into segments by revenue source into the following ones media rights, sponsorship, merchandising, and tickets. The largest segment of the sports market, reaching 38% of the total in 2020, is media rights. However, sports sponsorship market is booming it was worth of US$57.0 billion in 2020 and it is projected to reach the level of US$89.6 billion in 2027 (at a rate of 6.72%). According to Brandessence Market Research athlete endorsements have been shown to generate a 4% increase in sales (an average of US$10 million in additional sales annually) and nearly a 0.25% increase in stock returns. It is therefore obvious that behind the physical activity sport is a big business now and negotiations, for example with potential sponsors, are an indispensable part of this business. It is extremely important in a negotiation process to learn about the preferences and expectations of the decision-maker as well as build a negotiation offer scoring system facilitating the conduct of negotiations. These are exceptionally challenging but necessary tasks. Therefore, this article aims to present the application of one of the multi-criteria methods, namely the MARS method, for this purpose. More specifically, MARS will be applied to evaluate the negotiation template for sponsor contract negotiations. The method can ease and accelerate the negotiation process due to its properties such as, for instance, clarity, fit to reality and user-friendliness. © JPES.