Sponsorship in Football Falling, Except for the Elite

Coca-Cola World Cup sponsorship

The Irish Times has an interesting piece that paints a picture of the changing landscape of sponsorship in the football world. Tony Ponturo, for a  couple of decades one of the most powerful men in the sports business world due to his role presiding over the estimated annual $378 million sports marketing budget of Anheuser-Busch, says that “Over the last few years we started to pick up something from our sponsorship research that said the consumer more than ever questioned the whole concept of Official Partnership.”

“There was a time when they felt that because a brand was the official mobile phone or the official beer of the league, that it said something special about you,” Ponturo continued. “But now they realise it was something that was purchased. It doesn’t mean you are the best or that the league or team values you: you were just the guy who ponied up the money.”

This has serious implications financially across the line for the football world, which is now massively reliant on income streams from sponsorship. This all began on a serious level in the 1970s, from the first selling of space on shirts to the crucial purchase by Coca Cola of sponsorship rights to the 1978 World Cup in Argentina.

According to the report, it’s the elite global events that are increasingly attracting a greater share of the sponsorship pie from a handful of elite global brands.  Official partnerships appear to have much lesser appeal at local levels, but much more in terms of exclusivity at the highest level — which is why FIFA is cutting the number of marquee sponsors for the next two World Cups from 15 to 5. Global events and brands are attracting ever big slices of the pie for the best global properties. And this has consequences all the way down the line in world football.

Jobsite

Though the article doesn’t go into it, this also plays out in the Premier League, for example. The few teams that have a global appeal are able to attract huge investment — such as AON Corp’s recent deal with Manchester United — while those teams with only relatively parochial appeal struggle to find a sponsor at all.

Sponsorship revenue fell in the Premier League this year for the first time in a decade (despite the considerable new role played by betting companies getting into the market, which somewhat ameliorated the massive hit from the recession), and it was at the mid-to lower tier that the hurt was most felt. The disparity between Portsmouth’s £250,000 one-year deal with Jobsite to Manchester United’s £80m four-year deal with AON is obviously extraordinary for two club’s in the same league.

Incredibly, the top six Premier League clubs actually account for £53 million of the £65m total sponsorship this season: Manchester United, Manchester City, Chelsea, Liverpool, Arsenal and Tottenham Hotspur are all simply blowing away the rest of the league.

For a long time, the relative equality in television revenue in the Premier League was touted as critical to the competitiveness of the league, despite the domination of the big four. But the growing gap between those few clubs with truly global appeal who can attract global brands (even if Manchester City’s case, it’s bought at an expensive price) and the rest looks set to grow and grow not just in sponsorship, but of course, also in merchandise and high-profile friendly tours.