Originally published August 29, 2016. The examples and event information in this article reflect the municipal sponsorship environment at the time of publication.
Many smaller municipalities are under the impression that the sponsorship of municipal assets is limited to larger centres. While almost 100% of municipalities with populations over 100,000 are involved in soliciting sponsorship for a range of facilities, programs, community initiatives and events, that does not mean smaller municipalities are watching from the sidelines.
Survey Findings on Municipal Sponsorship
In a national survey we conducted in 2015, we found that:
- 50% of municipalities with populations under 10,000 were actively involved in sponsorship.
- 50% of those not currently involved were considering it.
- In most cases, sponsorship was managed internally by the department or program area.
- Naming rights and events were the most common forms of sponsorship.
Examples of Sponsorship in Smaller Communities
Examples of recent activity in smaller communities at the time included:
- Lacombe, Alberta (population 12,728): In August 2016, the municipality announced naming deals with Gary Moe Auto Group for the Sports Complex, Can Park Environmental Ltd. for the arenas, Freightliner of Red Deer for the Curling Rink and Central City Asphalt for the Hall of Fame.
- Beaumont, Alberta (population 16,768): The municipality took a professional approach by having an outside firm value its assets and developing a comprehensive strategy through which multiple assets were marketed to companies in the area.
- Summerside, Prince Edward Island (population 14,751): The municipality issued a request for proposals to explore how to maximise revenue. It had had a naming sponsor for the city’s civic centre for the previous 10 years, but wanted to determine the potential of bowling lanes, fitness and convention centres, city hall, fire stations, green spaces and individual pieces of machinery, such as plows, trucks and street sweepers.
- Corner Brook, Newfoundland and Labrador (population 26,623): The city turned down a proposal from Bell Aliant for five-year naming rights to the civic centre at $10,000 per year because it was not seen as providing sufficient value.
- West Kelowna, British Columbia (population 30,892): The city issued a request for proposals for naming rights to its skateboard park and amphitheatre. It wanted to expand on its existing agreement for Royal LePage Place, under which the real estate company was paying $40,000 per year for naming rights.
- Leamington, Ontario (population 28,403): Highbury Canco Corporation acquired the naming rights to the rink after pledging sponsorship of $140,000 over the next seven years.
Three Challenges for Smaller Municipalities
1. Limited Internal Capacity and Upfront Costs
While municipalities of almost every size have similar challenges, smaller municipalities face a few unique ones. First, it is not always possible to have trained or dedicated internal resources available to do the work. It can also be difficult to hire outside consultants unless there is some confidence that the revenue potential will cover the costs.
This creates a “chicken and egg” scenario: a municipality needs someone qualified to determine what its assets may be worth before proceeding to strategy development or implementation. My advice is to bite the bullet and complete the asset inventory and valuation properly, because this is the market intelligence needed to get it right the first time.
2. A Smaller Pool of Prospective Sponsors
The second major challenge is that smaller communities typically have fewer companies with strong ties to the community and the resources to afford multi-year sponsorship or naming rights agreements. If local competition is limited, it can also be difficult to motivate a company to support a program unless the municipality can identify another value proposition that appeals to that company.
Prospects for large sponsorships may be limited, so municipalities need to focus on fit and develop a specific strategy for each company. Remember, you usually get only one good opportunity to make the case, so it needs to count.
3. Fair Market Value and Revenue Expectations
The third major challenge is identifying the fair market value of municipal assets, recognizing that every municipality is unique, while also managing revenue expectations among senior management and council. This may be the biggest challenge: taking the guesswork out of revenue estimates and arriving at realistic goals for the program.
Original 2016 Event Context
At the time of publication, the sixth annual Municipal Forum on Sponsorship was scheduled for October 27, 2016, at the Grand Hotel and Suites in Toronto. It addressed these and other topics relevant to municipalities of all sizes, providing an opportunity to share best practices and learn how other municipalities were applying effective sponsorship principles in their own environments.
For smaller municipalities, the Municipal Forum on Sponsorship offered an affordable way to learn about the sponsorship development process, how it was evolving and what was working in other communities.
Questions About Municipal Sponsorship?
Every municipality has different assets, prospective partners and revenue expectations. If your municipality is exploring sponsorship or naming rights opportunities and has questions about where to begin, contact CEPSM to discuss your needs.
