Novadays almost every sport club or athlete have sponsored by companies. This situation creates complex sport ecosystem, and analysing it’s advantages and disadvantages is challenging.
There are two main advantages of companies doing that. First one is that athletes and teams need to be financed, and with just merch and spectator revenues it is really hard for most of them. By sponsoring, companies give great amount of money to teams/athletes and solve their financial requirements. For example football teams have company names in their shirts, and they are taking money for that. Thanks to that, they can make transfers and pay salaries. Second one is that companies can be motivated for developing teams and general ecosystem. When companies are making decision the first criteria is its benefits. So when a companies give their money to teams, they seek benefits. For example think about a company that sponsored a footbal club; it wants to increase its benefits, become more public etc.
On the other hand we have 2 disadvantages of companies using sport for advertising themselves. Firstly, companies can restrict teams just because they have given their money. For example, when companies sponsoring they sign an agreement with them, and they can restrict teams freedom by using their financial needs. Secondly, it can create less competitive environment. Companies tend to sponsor succesful teams; and this makes succesful teams more succesful. Ultimately, it creates less competitive environment.
In conclusion, companies sponsoring sports as a way of advertising themselves can encompass teams financial needs and helps them to develop, but it can also create less competitive environment and restrict teams.