Sponsorship budgets cut by more than 50% of firms

NEW YORK - Companies are planning to cut their sponsorship spending this year and look at ways of getting out of existing sponsorship deals, a US survey by WPP Group-owned sponsorship agency IEG has found.

The survey found that 51% of companies were planning to spend less on sponsorship in 2009 than last year and that 47% said they would like to get out of current deals.

A further 36% said that they were planning to keep spending at 2008 levels.

It also revealed that companies would be spending less on marketing their sponsorships.

Previously, IEG had found that companies spent on average $1.50 (£1.09) on activating their sponsorship deals for ever £1 (73p) spent on rights. That figure is now $1.40.

Sports, particularly Formula 1, have been hit as companies cut back on their sponsorship budget.

Royal Bank of Scotland has cut its spend on sports sponsorship from £200m to £100m this year, while .

Beyond the UK, companies including General Motors and FedEx have cut back on sports sponsorship.

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