E.V. Kharitonova¹
Master of Teacher Education A.V. Razumova¹           
Dr.Hab., Professor L.A. Rapoport¹
PhD, Associate Professor A.E. Terentyev^1
1Ural Federal University (UrFU), Ekaterinburg

Keywords: sponsorship, public-private partnership, mass physical culture and sports development, sport event sponsoring, event triangle, marketing communications, promotion.

Background. Modern sports and physical education sector have evolved to the industry that engages and serves millions of athletes, thousands of sport clubs and federations, public associations, governmental agencies and businesses. For the mission of the national physical culture and sports sector being successfully fulfilled, they shall be actively promoted by special prudent promotion campaigns designed for every sport discipline and sport brand, and with the relevant government support, sponsorship, advertising and media promotion projects.

Objective of the study was to analyse benefits of sponsorships and public-private partnerships (PPP) as efficient drivers for the physical culture and mass sports promotion initiatives.

Methods and structure of the study. Sport sponsorship has evolved into a commonly recognized and widely popular mechanism, with the sponsors lured mostly by the popular, growing and charismatic sport disciplines and events. Sponsorship for the national mass sports and physical training projects still leaves much to be desired despite the fact that many of them are quite beneficial for the potential sponsors particularly when the increasingly popular and efficient public-private partnerships (PPP) are applied.

As provided by Federal Law #38-ФЗ “On advertisement” of 13.03.2006, sponsor means “the entity that provides or secures provision of funds for a sport/ cultural or other event organizing and/or managing and/or broadcasting service project and/or other employment of the relevant creative product”; and the sponsor’s advertisement means the “advertisement disseminated on condition of the sponsor’s name being mentioned on an obligatory basis” [1]. Furthermore, as provided by Federal Law “On the public-private and municipal-private partnerships in the Russian Federation”, “public-private and municipal-private partnership means the legally documented and binding cooperation, valid for a certain time period, based on joint resources and risk management provisions, of a public partner and private partner governed by the relevant public-/ municipal- private partnership contract reached as provided by the present Federal Law and designed to lure private investments into economy, secure due accessibility of goods, works and services and improve their quality with due contributions from the relevant government agencies and bodies” [2]. In the national physical culture and sports sector, PPP projects are mostly designed to hand over some public construction/ upgrade/ rehabilitation/ operation/ maintenance services to the relevant private businesses.

One of the popular PPP contractual formats is the concession contract with the private concessioner undertaking to construct/ rehabilitate the contractual property owned by the public counterpart and or appropriated by the latter upon the construction/ rehabilitation project for operation and ownership. Such concession contracts are considered beneficial for both parties as they are normally highly cost-efficient provided that the subject property is owned and controlled by the relevant public entity, the tariff policies and practices are transparent, financial performance is improved by the PPP project, and the project brings benefits for the investment climate and social situation in the region.

It should be noted that PPP projects normally yield not only economic benefits. Private partners to the PPP projects and sponsors of the relevant mass sport initiatives and events receive a variety of other benefits including the image-building and long-term PR effects in the target population groups. It may be pertinent to mention that F. Shaaf [3] book “Sport marketing” describes the interactions of participants to sport events, private companies and spectators using such a term as “event triangle”. The same three concepts may be applied to analyse the PPP processes as follows:

1. For a sport event to happen, and for the athletes being duly remunerated for their contribution to the sport show, the project needs to be financed by the government and/or sponsors.
2. “Sponsors need the sport event to promote their goods and services and support their sales process… The sponsor needs such a sport event that can provide the best opportunity to reach the target consumer group” [3, p.54].
3. Spectators also benefit from sponsorships of their favourite sport teams or individual athletes for they heavily contribute to the appeal of events and give every opportunity for support, show and entertainment (3, p.49-55).

When the sponsor’s communication with the target population group via sports and physical culture is systemic enough and designed to engage not only the athletes and supporters but every population group that may have some concern to the event, such communication normally yields the highest benefits.

Sponsorship and PPP in the physical culture and sports sector has its own specifics as opposed to the elite sports system:

• Relatively small private companies may sponsor mass sport events of the relevant scale which claim less costs than the large-scale competitive events;
• Sponsorship shall be focused on the target population groups that may be different for the amateur and professional sport events. Municipal- or regional-level competitive events, for instance the Europe-Asia Race, may attract a wide range of population groups different in ages, income levels and social statuses;
• Sponsors may even design and offer their own mass sport initiatives and events under their own brand names;
• Sponsorship of mass sports and physical cultural events on the district/ municipal/ provincial levels shows good social responsibility standards of the company, and such demonstration may later on contribute both to the corporate image and management reputations. Therefore:
• The relevant regional sponsors may lobby their interest in the local governments and thereby open up new opportunities for the business promotion and expansion;
• Sponsorship of local mass sport events and initiatives including support of the local teams, sport schools and sport facilities in small settlements and towns is normally cost efficient versus the high PR benefits for the corporate sponsors giving the local communities a chance to improve the life quality by healthy leisure-time practices including contributions to the competitions and/or support activity;
• Image of the sponsor is further improved if a sporting corporate culture is established and promoted by the company management; and
• Relatively modest but systemic investments in the local physical culture and mass sports may help the corporate sponsor establish healthy emotional contacts with the target population group, win its respect and interest, build up its loyalty and, hence, further benefit in the long run.

Study results and discussion

Presently the Sverdlovsk region hosts quite a few high-ranking international and national competitions partially financed by private businesses including: Cross-country Race of the Nation Competition; Ural events of the Russian Mass Ski Races “Russia’s Ski Track”; World Cup in Ski Jumping; International Marathon “Europe-Asia” and others.

It may be due to the relatively well-developed legislative and regulatory framework that the Sverdlovsk region was one of the first in the country to support the PPP projects since it was found that such projects, on the one hand, help the government exercise its social liabilities and, on the other hand, create potential “growth points” for progress of the relatively large areas. In the PPP development ranking of the Russian regions of 2015, the Sverdlovsk region was ranked number 8 within the highly-developed PPP group.

A good example of a large-scale PPP project success is the Ice Sport Arena in Verkhyaya Pyshma, with the total Construction Project cost of RUR 506.87 million including RUR 50 million assigned from the Federal Government budget; RUR 244.5 million from the Provincial government budget; RUR 100 million from the municipal budget; and RUR 111.87 million from the local private businesses (dominated by UralElectroMed JSC).

Extreme Park Horizon in Beryozovsky gives an example of a successful concession contract with its construction financed jointly by the municipal government contribution of RUR 15 million and private business contribution of RUR 7 million. The project was designed to employ the private finance for the construction project component, with the Park operation, maintenance and expansion costs covered by the municipal-private partnership. This project design made it possible for the municipality to cut down the municipal assignments for the project construction, operation, maintenance and expansion.

UGM Holding Ltd. may be mentioned as an active local sponsor of the regional physical culture and mass sports in the Sverdlovsk region based on the relevant cooperation contract that sets a frame for the ice hockey infrastructure development in the region with support from the Sverdlovsk region government. UGM Holding Ltd. has undertaken under the contract to construct 8 high-tech ice hockey arenas in the cities of Rezh, Verkhnyaya Pyshma, Krasnouralsk, Kirovograd, Revda, Sukhoi Log, Severouralsk and Yekaterinburg in the period of 2017-18. Moreover, the company provides great support to the national Sambo at Schools Project designed to construct new training gyms, upgrade the existing ones, fully equip the facilities and contract new coaches.

Conclusion

Efficient sponsorships and public-private partnerships may generate great benefits for the local mass sports and physical culture and for the participating local governments and private businesses, with the benefits including the improved project cost efficiency, savings in government budgetary finance, and promotion of the relevant corporate services, goods and images in the supporter communities. Local sport organizations and their physical education and mass sport infrastructure development projects receive the required financial support and new development options. In addition to the direct economic benefits, the corporate and government contributors indirectly benefit from the improved communication and PR with the target population groups, with the relevant image-building benefits both for the local private business and governmental contributors and, hence, for further economic growth with improvements in the local and national investment climate and social situation on the whole.

References

1. O reklame. Federalny zakon no. 38-FZ st. 3. [Regarding advertising. Federal Law no. 38-FZ art. 3]. Available at: http://www.consultant.ru/document/cons_doc_LAW_58968/4f41fe599ce341751e4... (Date of access: 18.08.2017).
2. O gosudarstvenno-chastnom partnerstve, munitsipalno-chastnom partnerstve v Rossiyskoy Federatsii i vnesenii izmeneniy v otdelnye zakonodatelnye akty Rossiyskoy Federatsii. Federalny zakon no. 224-FZ ot 13.07.2015. [On public-private partnership, municipal-private partnership in the Russian Federation and amendments to specific legislative acts of the Russian Federation. Federal Law no. 224-FL 13.07.2015.]. Available at: http://www.consultant.ru/document/cons_doc_LAW_182660/ (Date of access: 19.08.2017).
3. Schaaf F. Sportivny marketing [Sports Marketing] Transl. English. Moscow: Filin publ., 1998, 457 p.

Corresponding author: d_narkhov@mail.ru

Abstract

The study considers benefits of sponsorships and public-private partnerships (PPP) in the physical culture and mass sports promotion initiatives that imply efficient cooperation of private companies and businesses, public institutions and the local communities. Sponsorships and public-private partnerships are analysed as drivers of the regional physical culture and mass sports geared to promote, among other things, the contributing sponsor companies and government/ municipal partners with the public recognition of the private contributions to the mass sports and physical culture events and infrastructure including the sport assets construction and rehabilitation projects. The study analyses a variety of specifics and benefits (including the economic, communication and PR ones) of the sponsorships and PPPs in the physical culture and mass sport sector for every contributor to the process versus the traditional professional sports financing mechanisms. The study gives and analyses a few cases of the mass sport events and projects in the Sverdlovsk region partially supported by the local private businesses.