By definition, sponsorship in football entails a collaborative arrangement between a football club and brand where the club offers its platform for promoting the brand in exchange of financial or in-kind support
Sponsorship constitutes a significant share of the commercial revenue generated by the club. In a broad scope, clubs with global fan presence attracts the bigger brands and subsequently highest financial returns. A club with more concentrated local presence, as a result, attracts attention from the local brands
In this post, we will decipher the relationship between brands and clubs resulting in the commercial revenue growth
Growth in Big 20 Clubs
The accumulated concentration of brand-pulling power in the twenty highest revenue generating clubs is so strong that it corners half of the entire commercial revenue generated by 730+ top tier European clubs. That is of the estimated €8.5bn total commercial revenue, €4.43bn is accumulated by the twenty clubs
The strength is increasing with each passing year growing at a CAGR of 4% y-o-y. From generating €3.68bn commercial revenue in 2018/19 to €4.43bn in 2022/23, a straight 21% increase in 5 year period!
Zooming further in the list of twenty clubs, there are precisely 13 clubs spread across the big five leagues who hold the actual ‘commercial’ power. This subset, including the biggest club brands, accumulated €3.91bn in commercial revenue which is
- 88% of the commercial revenue generated by top 20
- 52% of the commercial revenue generated by the big five leagues combined
- 46% of the commercial revenue generated by 730+ Europe’s top tier league clubs
The comparison between average commercial revenues between the 13 clubs versus the average for the rest of the league clubs paints a very one-sided picture
LALIGA demonstrates the most drastic picture with Real Madrid and Barcelona towering over with an 18X average commercial revenue value over the average revenue for rest of the clubs. In other leagues, the delta ranges between 6X – 8X
Globalization and Football Sponsorship
The big five leagues have established itself firmly in the broadcast perimeter and is estimated to be available in over 200 countries. This translates to an increasingly global fan following. However, Premier League can be considered to have become the league with highest top-of-mind recall with the argument of having the most internationalized sponsors in their most coveted front-of-shirt sponsorship
The chart details the picture of shirt sponsor origin countries
- Premier League – 15% domestic companies & 85% international
- LALIGA – 58% domestic
- Bundesliga – 78% domestic
- Serie A – 53% domestic
- Ligue 1 – 78% domestic
Conclusion
The relationship between brands as sponsors and football clubs as rights holders has been and will always be strong and growing. The world of consumers who are fans and vice versa are forming a homogenous mixture with football clubs taking on the role of media entities, thus creating a potent channel presenting the brand positively
With the new technological developments and data analytics becoming catalyst for the relationship growth, brands look more synergized towards the use of data in understanding fans better and thus creating a better brand experience for them
We are bound to see a much stronger growth in this space in the coming future
Image: Photo by Nelson Ndongala on Unsplash
