Sponsorships and strategic partnerships are great ways for companies to build their brand, expand audience reach, and support organisations or causes that are important to them. The beneficiary meanwhile receives much needed financial and other support to operate.

But what happens when it goes wrong? And do you have crisis communication and risk management in place?

There has been a recent uptick in sponsorship related missteps making the rounds in the media. Mining billionaire Gina Rinehart’s decision to pull her company’s sponsorship arrangement with Netball Australia has caused ‘lively’ debate both online and in boardrooms across the country Australian Men’s Test Cricket Team Captain Pat Cummins’ voicing of ethical objections relating to Cricket Australia’s partnership with electricity and gas company Alinta has also reportedly contributed to the end of a deal worth almost $40 million.

And it’s not only sport. In recent years, there has been increasing pressure on the arts community to break ties with sponsors who, for social, ethical or environmental reasons, are ‘on the nose’ with their audiences. For a sector that is often severely underfunded, arts administrators can find themselves caught between principle and survival.

So, what’s the lesson here? There’s a lot of opportunity in sponsorships but also an inherent risk. Here are a few things to consider if your company is considering entering into a new sponsorship, or already has a few partnerships in place.

Choose your relationships wisely

It seems a no-brainer, but this is often overlooked. Before hitching your corporate wagon to a particular star, you need to ensure there is good sponsorship-brand fit. For a partnership to be truly effective, there should be an alignment between goals, values, and vision. Also consider that any actions of a person, brand, or event you sponsor will be linked back to you. Sport sponsorship may offer access to a highly diverse, mass audience but teams and individual athletes are people. And people sometimes make mistakes.

Who you choose to sponsor will also send a strong message to customers about what your organisation stands for, so don’t take the decision lightly. If you have existing sponsorships, perhaps it’s time to re-evaluate the relationship to make sure your values still align. Read more about aligning sponsorship with brand in a previous blog post BBS has done here.

Have a crisis communication strategy in place

With so many stakeholders given a voice online and the volatility of the digital media environment, it is not a question of if you will encounter a problem, it’s more likely when. When an issue arises, you never want to be caught off guard or be slow to react. Consider a risk audit on existing relationships, to identify and plan for reputational risks, and address any gaps you find.

Clarify mutual expectations in advance and ensure your key stakeholders are on board – not just your staff but also other organisations that you sponsor. They don’t need to all like each other, but you do need them all to be in step with you. Remember, that while sponsorship risk cannot be eliminated totally, it can be managed.

Keep an eye on community sentiment and social trends

Perhaps one of the most important skills organisations need to have, especially when there’s risk you can’t exactly plan for, is adaptability. Be proactive in identifying potential media trends and how it might affect your sponsorships.

For example, an Australian-led athlete movement called The Cool Down, is calling for serious climate action. That doesn’t mean abandon the idea of sports sponsorships – or all sponsorships – but rather consider how this growing acceptance and encouragement of public figures to share their personal commitment to an issue may impact your sponsorships.

Sometimes, an unemotional and objective opinion is helpful when reviewing or entering corporate partnerships…someone to ask the question, “what if” or “have we considered…”

Our team has 30+ years’ experience establishing, managing and auditing corporate partnerships, as well as providing support when things go wrong via crisis communication and risk management. So, if we can support your team in this regard, please get in touch today.