Storms to fill in sponsorships to resume normalcy
It will be business as usual if Melbourne Storm can fill up all the lost sponsorship within weeks.
Before the salary-cap scandal hit, Storm has attracted large television audiences and generated an estimated $5 million a year.
According to commercial officer John Poulakakis of Melbourne Football Club, Storms may have its comeback if it can produce or replace its old sponsorships with new ones in four to six weeks.
"The corporate sector is astute enough to know the difference between a player doing the wrong thing and management doing the wrong thing, and once the club cleans up its act, it will be business as usual again," he said.
Jayco, a trailer and campervan retailer, was one of the third-tier platinum sponsor of Storm but has taken advantage of the company's discount rates and rose to a major sponsor status. Jayco said it will continue to give support the club while it is rebuilding.
"It's been a solid partnership over the last 12 years, and we plan to stand by the team while it rebuilds after this difficult period," Jayco said.
However, other sponsors such as ME (Members Equity) Bank, sportswear brand Skins, and Hostplus thatfunds hospitality and tourism employees, have decided to pull their plugs. Suzuki and Gatorade are speculated to withdraw their support as well.
Martin Hirons, a sports business consultant, said that Storm will take more than a month to recover its $2 million loss in sponsorships alone.
"The scandal will impact on the value of the brand into next year. It will take time to gain the trust of sponsors and investors. But a new management team and a reinvigorated focus will see the fans stand by the team, which means that brands will return in time," Mr. Hirons said.
Advertising Agency BWM Melbourne said that it is risky to sponsor sports clubs or individuals but it generates high returns.
BWM further suggests that sponsoring or broadcasting events may minimize the risks instead.