Crowded Baltimore sponsorship market strained by new sports entities

Baltimore's reputation as a sports city continues to grow, thanks to the Super Bowl champion Ravens and the surging Orioles. It's also known for losing corporate headquarters, making it the largest U.S. city without a Fortune 500 company.

That disconnect means competition for corporate sponsors who underwrite sporting events and venues is intense, and some worry that supply is outpacing demand.

This week, organizers of the Grand Prix of Baltimore acknowledged they won't be able to land a title sponsor for the Labor Day weekend car-racing event. Other event planners are still searching. The LPGA, which will host a tournament in Owings Mills next year, has invited prominent business leaders to the course for a presentation Monday meant to generate interest in the event.

The Colonial Athletic Association, which in 2014 will begin a three-year stint of holding its basketball tournament in Baltimore, also is on the hunt for sponsors. And venues such as 1st Mariner Arena are looking for companies willing to pay to put their names on the buildings.

Sponsorships can be a difficult sell here, said Leffler Agency founder Bob Leffler, who has worked in advertising and marketing in Baltimore for more than 30 years.

"It's a back-office town," Leffler said. "There are very few people here these days with the authority to decide their company is going to spend six figures on a sponsorship deal. And if they're having to run to New York or somewhere to pitch the idea, it's not going to resonate as strongly with the people there."

Leaders in local government and the business community envision Baltimore as a destination for more large-scale sporting events, such as the Grand Prix, NCAA lacrosse games and possibly even Olympic events. But decision makers for sports organizations may be reluctant to choose Baltimore if the market for sponsorship dollars becomes oversaturated.

"Given the competitiveness of the market, an event or entity can't expect to come into the market and easily find the sponsorships they need," said Marty Conway, an adjunct professor in Georgetown University's sports industry program and a former executive with marketing firm IMRE and the Orioles.

"All markets are more segmented than they've ever been, and there's tremendous pressure on the Baltimore area right now."

Conway said Baltimore's push to become a sports destination — with events like Sunday's Gold Cup soccer games — has lacked the sort of cooperation between government and business leaders that made previous projects, such as the building of Camden Yards and the NFL's return to the city, possible.

Others say the city has been proactive in pushing for support. Tom Chuckas, president of the Maryland Jockey Club, said Mayor Stephanie Rawlings-Blake has advocated on behalf of the Preakness, the second leg of horse racing's Triple Crown. Terry Hasseltine, the director of the Maryland Office of Sports Marketing, said one of his primary duties is connecting sports event organizers to the business community.

"It's a tight, tight market, for sure," Hasseltine said. "So that's one of our challenges, bringing people together and making sure the money is there. But it's something we've been doing and will need to continue to do."

While businesses are still interested in sponsorship packages, many have smaller budgets and numerous options for reaching customers. Marketing budgets were cut during the recession and have yet to see a major rebound, experts said.

Meanwhile, the number of sports entities seeking support has grown.

The Grand Prix, in its third year, has never secured a title sponsor. Organizers said they are still seeking a company willing to pay more than $1 million to put its name on the race in 2014.

Lesser Grand Prix sponsorships — including from local companies Esskay and Maryland Live Casino — have increased, and Debbie Bell, the event's vice president for sales and marketing, believes more local companies will invest in the near future. And the race weekend does have a presenting sponsor, SRT, a racing-focused subsidiary of Chrysler brought on by Andretti Sports Marketing.

J.P. Grant, managing partner in Grand Prix organizer Race On LLC, described a climate in Baltimore where companies are hesitant to spend marketing dollars on anything but established events and organizations. He has urged more investment in upstart projects.

"You've got to think about what life is going to be like in 15 or 20 years, and about making the city into what it can be," he said. "There's got to be some long-range vision."

Race On officials have said repeatedly that the success of their event depends on the ability to generate revenue via sponsorships, particularly at the local level.

The Colonial Athletic Association also has been trying to sell naming rights for its three years of Baltimore-based tournaments for $200,000.