Sponsorship money is the life blood of major sports in America and the rest of the world. Having sponsorship funding allows athletes and organizations to focus more on the training and production of their sports, as well as reduce the stress that comes with finding money to train and put on events. In some sports such as NASCAR sponsorship presence is very recognizable, but even sports like golf or tennis sponsors factor heavily.
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For athletes in individual sports, a sponsorship can take them from a part-time amateur athlete to a full-time professional. Athletes such as fighters, track and field athletes and race car drivers rely on sponsorship money to allow them to train full time. Without sponsor money, many would be forced to work full-time jobs and would not have an adequate amount of time to train. This leaves them at a disadvantage facing opponents who have the resources to devote their lives to their sport.
From little league baseball all the way up to NASCAR, teams rely on sponsorship money to function effectively. Without sponsors many of these teams would not survive, and the surviving teams would not be able to travel and compete as easily. Without sponsors, team owners and officials would be forced to focus on fundraising, which would take the focus away from building the best team possible. When you see local businesses on the jerseys of a little league baseball team, or sponsor stickers covering a stock car, each of those sponsors paid money or provided a service for that exposure. Money from sponsors allows these teams the ability to plan their season, pay for travel and equipment, and advertise to bring in fans.
Sports leagues as large as the NFL and UFC also function and rely on sponsorship money. Whenever you hear a product being advertised in a commercial as "the official product" of a certain league, you can be sure sponsorship money was paid for that right. Although not as visible as NASCAR decals covering their cars, the NFL receives a great deal of money from sports apparel companies, beverage companies and many other products. Being associated with a league as popular as the NFL is a premier marketing tool for these companies.
If not for his many endorsements it's likely that Michael Jordan would not be as famous for certain products as he is today. Starting with his Nike shoe deal, he's gone on to endorse products from underwear to sports drinks. Appearing in print and video ads has greatly helped to broaden his audience past those who watched him for what he did with a basketball in his hands. People who didn't follow basketball knew who he was from his many commercials.