Kulikowski: Boston Bombing Tests Corporate Sponsorships

NEW YORK ( TheStreet) -- Are corporate sponsorships of big sporting events still worth it?

While federal authorities and the city of Boston still figure out exactly what happened at the Boston Marathon on Monday in which two explosions left three people dead and more than 100 injured, one has to wonder -- even in the early days -- is it worth it to be a backer of a big event when a major tragedy like this hits?

The bombing, which is now officially being treated as an "act of terrorism" by the Obama Administration, isn't exactly the kind of press a corporate sponsor wants at an event it's backing.

Major sponsors of the Boston Marathon include: John Hancock Financial, the event's longtime main sponsor and a division of Manulife Financial ( MFC), AT&T ( T), JetBlue ( JBLU ), Samuel Adams (its parent company is Boston Beer Co. ( SAM)), Gatorade, a division of PepsiCo ( PEP), EarthLink ( ELNK), Nissan Motor Corp. ( NTANY) and Adidas.

So far there isn't much talk about corporate sponsors backing out - the corporate line from several companies was mainly of support, condolences and making sure their own employees at the event were accounted for and safe.

In fact, the high-profile marathon is likely to attract even more sponsors next year, if only to show their "support" to the city and the event itself, experts say.

"Will people come back next year for sponsorships? Probably more so," says Dr. George Belch, marketing professor and department chair at San Diego State University. "In many ways it will probably be a more valuable sponsorship opportunity. I don't think you will see anyone dropping out. The publicity from dropping out could be even more negative ... at least in the short term."

Longer term, without the proper security controls and contingency plans in place, companies are likely to take a closer look at the percentage of their ad budgets spent on major sponsorships, experts say.

"There will always be companies willing to go in there and compete for the sponsorship opportunities. In the short term I don't think it's going to move companies away from sponsorships, but they're going to have to think ... what risk are they taking in terms of activation costs and do they want to allocate those monies a different way moving forward," Belch says.

Of course, stadium-centric sporting events like the Super Bowl or World Cup are, by their nature, easier to secure. Inevitably, security surrounding marathons will be coming under closer scrutiny.

"These are issues probably being addressed in many events ... but now they're going to be looking at marathons more closely .. then a sponsor can make a decision of whether they feel comfortable" participating, says Glenn Kelley, owner of Kelley & Cohorts in Wellesley, Mass., and a lecturer at nearby Babson College.

While a traumatic event like the Boston bombings is an exception, Belch believes a bigger issue related to sponsorships is the unpredictable weather seen in the U.S. over the last few years. Hurricane Sandy in October 2012 was so destructive to New York and New Jersey that it forced New York City to cancel its annual marathon, sponsored by ING ( ING).

Weather is "so unpredictable," Belch says. "It does make a company probably sit back a little bit and perhaps question" if they should be tying up a big part of their marketing budgets on sponsorships, given that companies likely can't recoup costs if the event is cancelled.

"Where the investment dollars put zeros behind those numbers, that's where it starts to become an issue," he says.

For now though, corporate sponsors of the Boston Marathon should be stepping up to the plate, considering the money and resources available.

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"This is a clear opportunity for these companies to really step up and do some positive things here. What you don't want to see happen is a company tries to make it look like they're doing something wonderful and turn it into a commercial mode," Kelley says. "Consumers see right through this."

Rather, it's an "opportunity to really step up and put a human face on their company and help in any way they can -- put the focus on helping the city, helping the families, there is some real opportunity to do some interesting and innovative things that could raise money ... things that don't necessarily tie it back to" buying products, Kelley says.

Even small, emerging brands that might be new to the corporate sponsorship scene can use the tragedy as an opportunity to do good, which "in the right way could be very beneficial," he adds.

Making it very transparent that the company is supporting the event, the community and the victims and helping in whatever it can, "will pay huge dividends," he says.

JetBlue, for isntance, activated its "incident operations center" to locate crewmembers that were participating in or watching the marathon and to monitor "operational impact" at Boston's Logan Airport, spokeswoman Allison Steinberg wrote in an email on Monday.

Steinberg referred future correspondence to JetBlue's customer blog BlueTales, where it has information posted about travel information in and out of the Boston area, as well as fee waivers for those needing to change their flights.

"As a sponsor of the Boston Marathon with a large number of the JetBlue family based in the city, our thoughts are with the Boston community during this difficult time," the Queens, N.Y.-based company said in a statement.

Other companies also expressed their sympathy.

"We are shocked by the terrible news coming out of Boston," Adidas said in a corporate statement Monday evening. "Our hearts and prayers go out to runners, spectators and their families at the Boston Marathon. We are monitoring the situation carefully and are currently in the process of ensuring all of our employees are safe."

"We were stunned and saddened to learn of the tragic bombings this afternoon near the finish line of the Boston Marathon," Boston Beer Co. said in a statement on Monday. "For more than 100 years this event has been a cherished part of Boston history. Samuel Adams is a sponsor of the Boston Marathon and had dozens of employees at the race who we believe are safe. All of us at BBC are heartbroken and our thoughts and prayers go out to the victims and families of those affected by today's incident."

Of course, while it's anybody's guess what the sponsorship lineup will look like next year at the Boston Marathon, an interesting bet to place could be which new companies decide to show their support of the race.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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