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he COVID-19 pandemic has changed the sports sponsorship market forever, according to Ladbrokes-Neds Australia chief commercial officer, Karl deKroo.

deKroo told Ministry of Sport the impact COVID-19 has had on the economy will create an even bigger challenge for Australian businesses and sports, saying: “the worst may be yet to come”.

“It has reset the economy and the worst may be yet to come,” deKroo said, in an interview with Ministry of Sport, discussing COVID-19.

“The reality is a number of medium to large businesses may no longer have the capacity or appetite to include sponsorships as part of their marketing mix and that’s if they survive at all.

“Sponsorship was already a challenged market in Australia prior to COVID-19 and I can see a drop of 25% or more on what sports clubs can expect to be getting for their key assets in 2021 and beyond,” he said.

Speaking on the importance of sports sponsorships for Ladbrokes-Neds, deKroo said it would be difficult to say where they would be as a business without the iconic sponsorships that have made the brands what they are.

“Sport and racing sponsorships have always been a strong component of our marketing mix,” deKroo said.

“While the Ladbrokes and Neds brands are at different stages of their development, our commitment to sport through key partnerships has helped aid brand awareness and trust, and ultimately assisted our market growth.

“Aside from brand building, there is an element, particularly through our diverse range of racing sponsorships, of putting some skin in the game and directly supporting the industry and stakeholders that support us.

“This is over and above the significant product fees and point of consumption taxes that we pay,” he said.

When asked about the effects Ladbrokes and Neds have felt in their sponsorships due to the pandemic, deKroo said the lack of fans at live sports has changed the whole product, but everyone is working hard to be innovative and creative to deliver new value.

“Our core approach hasn’t really changed,” deKroo said.

“Obviously, it has been a challenging period particularly for our sports partners, with so much uncertainty around scheduling and crowd attendance and the flow on effect to their cashflows.

“Like any sponsor we are very focused on driving a return from our investment, and that means we have had to pivot our thinking away from elements such as game day activation, and to focus more strongly on brand.

“All of our partners have worked extremely hard with us to ensure they are thinking of innovative and creative ways to deliver value.

“Having no fans in the stadium has definitely stripped some value out of sport partnerships.

“While there has been some obvious uplift in broadcast and digital audiences, there is an argument that even broadcast has lost some lustre without the atmosphere normally generated by passionate fans in the stands,” he said.