By / April 14, 2022

Sports Sponsorship and Business Opportunities in CBD

Regular readers will be familiar with the increasing adoption of CBD by a wide range of sports athletes. We’ve published extensive coverage of its benefits in terms of sporting performance, recovery, and overall health and wellbeing. However, despite this, we’re still yet to cover the emerging business and endorsement/sponsorship opportunities it presents.

Of course, the business, sponsorship and endorsement opportunities aren’t the primary reason athletes are turning to CBD. In fact, a vast majority of athletes are simply turning to it as they would any other treatment or supplement. That is, for a majority of athletes, CBD is just like ice baths and compression stockings — great for performance and recovery, but of no great commercial interest.

However, for those with a more entrepreneurial mindset, CBD presents some big opportunities that extend well beyond the usual endorsement type deals. In fact, as the market for CBD products amongst athletes develops, we’re starting to see signs that it may only be a short amount of time before even the smallest amateur clubs and athletes can get in on the action. Let’s take a look.

First things first: A Brief Recap of CBD in Athletic Performance and Recovery

In the world of sport, more and more athletes are turning to natural methods to treat their ailments or find a competitive edge. Of course, one such product is cannabidiol, or CBD as it has become to be known.

For the unfamiliar, CBD is one of the molecules contained in cannabis, just like the now-infamous THC. However, unlike THC, CBD does not provide any “euphoric” effect. In other words, CBD use does not leave users feeling “stoned” as is usually the goal with other cannabis products.

The major advantage to this is that it allowed the World Anti-Doping Agency (WADA) to remove it from its banned list of substances in January 2018 — a move that opened the door for professional athletes to start experimenting with its benefits. Since then, its popularity amongst athletes has only gone from strength to strength, with many athletes integrating CBD into multiple aspects of their regimes.

For example, CBD’s anti-inflammatory properties make it popular as a recovery aid for both post-training, and post-injury recovery. It is also finding enormous popularity for its calming, anti-anxiety properties — the perfect pre-game supplement to help athletes performing in high-pressure tournaments regain composure and focus.

Why Are Athletes Launching Their Own CBD Brands?

An interesting phenomenon to observe in the world of athletes and CBD is that a growing number are starting to launch their own product ranges.

Of course, an athlete pursuing business ventures off the field is nothing unusual — we only have to look at the number of athlete-branded (Air Jordans, for example) or athlete-endorsed (Terry Crews and Old Spice, for example) products to see this. But what is unusual with CBD is the number of athletes that are launching entirely independent ventures.

One reason driving this is the need for CBD formulas to address athlete concerns. For example, while WADA may have permitted CBD in 2018, THC is still well and truly forbidden. This has seen some athletes who adopted CBD failing drug tests due to overly THC-heavy formulations, creating a need for certified low-THC cannabidiol products.

However, while the obvious need for athlete-specific CBD formulations goes some way to explaining athletes launching their own CBD brands, it misses the bigger point.

That bigger point, of course, is that CBD is still a new, emerging category of products. This means that, unlike something like sneakers where there is already a brand for just about every taste/belief/religion/style/etc., CBD still has plenty of holes that need filling. This means that there is an absence of products to just endorse, creating additional motivation to go out and start something from scratch.

Athletes Going it Alone Equals Greater Opportunities

The great thing about the CBD space is that, as an emerging market, it allows for much greater freedom both in terms of the brands that are created, and in terms of how those brands are marketed. An example of this can be found in the sports CBD brand ORA, which was co-founded by pro Rugby player Liam Messam.

Of course, being an athlete-founded brand, having 0% THC is a feature of its promotion. However, while important, this feature is more like an essential checkbox rather than a brand highlight; no serious CBD brand can market itself to athletes without it. What’s more interesting is the story of its origin, being founded in France by a proud Maori native. This creates an interesting brand story that goes much deeper than just its product’s performance benefits, and we see this embraced in the product’s promotion, with dry, clinical western science blended with traditional Maori spiritual and cultural values.

The beauty in seeing brands like this emerge is that they’re much more aligned with how consumer markets are developing. Now, instead of looking to big brands as the sole source of everything, more consumers are seeking more genuine connections with the products they support. It could be a personal connection to the athlete behind it, or the brand’s alignment with their personal values and belief system.

How this Opens Opportunities for Smaller Clubs and Athletes

The growing importance being placed on more personalized brands ultimately means that the promotion of these products will no longer rest on the shoulders of the biggest athletes alone. For example, seeing Michael Schumacher endorsing Messam’s ORA brand would not only be highly unlikely — it would be downright incongruent.

What this means is that we’re likely to see a growing number of small amateur and semi-pro athletes and clubs getting involved in the promotion of these products. In other words, community influencers whose public image is rooted not in superstardom alone, but in genuine belief systems and community connections.

Returning to Messam’s brand again, more meaningful endorsements are likely to come from, let’s say, smaller rugby players and clubs in both France and New Zealand, particularly among the athletes whose fans can share in Liam’s value system.

The Space for Amateurs and Semi-Pros not Quite Ready Yet

Of course, while one ideal endgame for the promotion of this new breed of athlete-driven brands is the opening up of opportunities for smaller athletes and clubs, we’re not quite there yet. The unfortunate problem that still plagues this space is the work that comes with onboarding influencers and endorsees.

At the top end of town where deals start at six figures, this administrative burden is just another sunk cost that, proportionately, works out to zero. But once we start talking about deals worth hundreds of dollars — or even low-thousands — the admin burden can quickly eat into any benefits the promotion might have delivered.

However, that’s not to say all hope is lost. As with many things, technology can solve most of the problems here, and one possible solution has been hinted at with another deal Liam Messam has entered into — this time with the sports marketing technology company CXSports.

Is CXSports Opening the Doors for Amateur and Semi-Pro CBD Endorsements?

We can’t say whether Liam’s signing with CXSports was partly motivated by an opportunity to promote his CBD brand. But, for speculation’s sake, let’s just say that a closer look at the company’s sports marketing technology does reveal some big opportunities for all involved.

To see how this would work, the first thing to understand is that CXSports is fundamentally about opening up online marketing and “sponsorship opportunities” for sports clubs and their athletes, no matter how small. In essence, clubs and athletes can subscribe to and promote numerous brand deals through a series of subscribable modules, with all the administration (contracts, payouts, etc.) being administered predominantly through its SaaS platform. What this means is that a club or athlete can become a paid brand ambassador with nothing more than a simple form and a few clicks.

To make this feasible, most of the deals work through what’s known as affiliate/performance marketing, meaning athletes are paid for the results they deliver. In other words, unlike the usual athlete deals that involve x dollars for y years, athletes are paid for sales/subscriptions/etc. they deliver — something that is, again, made possible through the advent of technology.

A Closer Look at the CXSports Opportunity in CBD and Beyond

Translating this to the CBD space, we could soon see brands like Messam’s ORA CBD opening themselves up for other athletes to become advocates. If this were to happen, we could quickly see everyone from semi-pro rugby clubs to amateur Maori athletes from other sports jumping behind it as brand ambassadors.

This would essentially open the floodgates of the CBD opportunity to everyone given that such promotion would likely be highly effective. With athletes closely aligned with brands that speak to the core values of their fans and communities, real opportunities open up for amateurs and semi-pros to generate sales of CBD products that are mutually beneficial to all involved — something that many other product categories might fail to deliver at this sort of scale.

(Featured image by Nataliya Vaitkevich via Pexels)

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