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International Sports Federations

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Table 2. Top 20 International sports federations by sponsorship income
Top 20 sports federations by sponsorship income

UEFA sponsorship income

Table 2 shows that UEFA is the leading earner among international federations with an estimated total sponsorship income of $468m per year. 2011 accounts show a figure of $355m for commercial rights, however, since then rights to the Champions League in particular have risen with most partners re-signing for the period 2012-2015. Russian energy giant, Gazprom has also joined the ranks of tier one partners and sponsorship income from Euro 2012 has driven up total annual earnings.

In comparison with most other international federations, UEFA benefits from staging events on a weekly basis. With soccer being the most popular sport in the world, and Europe being home to the leading clubs, the global interest in, and TV coverage of, the Champions League is massive.

The Champions League is also arguably the most glamorous of soccer’s many formats, with the likes of Barcelona, Chelsea, Real Madrid and Manchester United featuring regularly in the latter stages of the competition.

The image is therefore highly desirable for brands such as Playstation, Heineken, Ford, MasterCard, Unicredit and Adidas.

The Europa Cup, the secondary club competition in Europe, is proving more of a challenge for UEFA. For many teams, especially in the early rounds, it is seen as a distraction from more important fixtures and weakened teams are fielded. The matches also tend to be played on Thursdays, close to the weekend fixtures and managers are reluctant to risk their best players through fear of injury and tiredness. The result is low attendance, modest TV figures and, inevitably lower income from all revenue streams including sponsorship.
In the autumn of 2012 there were rumours that the competition would be dropped in favour of the Champions League being extended to 64 teams. However, UEFA has dismissed the speculation and sought to bolster the format of the Europa Cup through offering Champions League places to the winners and possibly also to the runners up.

This is unlikely to be enough on its own to rejuvenate the competition. Quite simply most clubs will consider that the chances of reaching the final are quite slim. They might also consider that the better chance of reaching the Champions League is through marshalling resources more carefully to ensure Champions League qualification through their domestic league position. Unlike a knock-out format, the element of fortune is diluted.

UEFA needs to inject glamour and interest in the event and this can arguably be achieved only through increased prime-time television coverage – perhaps by bringing the matches forward to Mondays and tying the deals into TV contracts with major Champions League broadcasters to insist that at least once per month a Europa Cup match takes precedence. TV schedules and fixture congestion will make it a tricky balancing act, but unless radical reform is undertaken, the Europa Cup is in danger of petering out.

FIFA sponsorship issues

It is no secret that allegations of corruption have tested the patience of several FIFA sponsors in the past two years. While this is not the forum to discuss the merits of the allegations, it is important to examine the likely impact on future sponsorships.

Emirates has been the most outspoken critic of FIFA during this period. In autumn 2012, Emirates senior vice president Boutros Boutros, said the airline had yet to see enough progress since FIFA President Sepp Blatter set up a reform of the organisation to prevent corruption:
"So far they talk a lot about them, but we are yet to see," Boutros Boutros said. "They look serious about it and we are optimistic. We hope they will work on it and do what the public want ... we are waiting until after 2014 [when the Emirates deal expires] to evaluate."

Emirates had previously hinted that it would not renew its FIFA sponsorship, so the signs are encouraging for FIFA – the pressure is reduced but the statement is still firm. Emirates is one of the world’s biggest investors in sponsorship and it has recently committed to a major increase in its sponsorship of Arsenal and there are rumours that it will take naming rights to Real Madrid’s Bernabéu stadium. If the airline finds that its FIFA deal is in any way tarnishing its image, its rights acquisition budget might be considered to be stretched far enough as it is.

The danger for FIFA is that come 2014, when several major deals come up for renewal, if there is not a perceived improvement in FIFA’s image, one sponsor pulling out could lead to a domino effect with others following suit. Given the nature of the global partners; on the whole they are leading players in a two horse race (Coca-Cola/Pepsi, Visa/MasterCard, Budweiser/Heineken etc), it will be very difficult to find replacements willing to pay similar sums and certainly the image for FIFA of partnering a series of number two brands is far from ideal.

The likelihood is that the bad publicity will peter out and that the Brazil 2014 World Cup should be a major success. The country is synonymous with entertaining football and passionate fans. With impressive new and refurbished stadia and one of the few booming western economies, the recipe for a fantastic event is in place. Should this happen, the appetite among global partners might remain strong, even if there are serious concerns about staging the event in Qatar in 2022. It will, however, be interesting to see the small print on the morality clauses of any renewed deals.

Aside from the problems confronting FIFA, it has had more success than ever in signing secondary and domestic deals for the 2014 World Cup. Brazil’s domestic companies have shown a willingness to invest very large sums in major events – some local deals for the 2016 Olympic Games, for example, are more than twice the equivalents for London 2012 despite Brazil being a much less mature sponsorship market.

The likes of food group Seara and telecommunications company Oi have joined the ranks of FIFA’s global second tier sponsors bringing to eight, the total number in this category. It is estimated that second tier sponsors pay up to $26m per year for their rights and this has helped FIFA to increase commercial income significantly over the past four years.

The Olympic sponsorship challenge

Michael Payne, the former commercial head of the International Olympic Committee is credited with changing the global sponsorship landscape in the 1980’s when he was largely responsible for devising the TOP sponsorship programme. In short, the programme identified the potential for commercial income from a limited number of brand categories. The big gamble, which paid off spectacularly, was to tell the brands that they would receive no trackside signage and that instead they would benefit from their activation programmes.
It moved sponsorship onto a new level and was instrumental in changing the fortunes of the Games themselves, which were being used as political pawns and saw host cities losing vast amounts on staging the Games.

It is arguable that the time has now come for further radical Olympic sponsorship change. The TOP programme continues to work well for the global partners, but categories offered by local organising committees for domestic sponsorships are now seeing rights values exceed those of their global equivalents. For London 2012,

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