As football has morphed from a local pastime to a global spectacle, its financial landscape has undergone seismic shifts, with sponsorships emerging as a pivotal force driving clubs' success and sustainability. Football sponsorships have become a lifeline for clubs, players, and the sport itself. In this analysis, we delve into the intricate web of football sponsorships, tracing their evolution over the past 15 years and exploring their impact on the modern game.
.png)
Revenue mix evolution in the last 15 years
In the past, football primarily drew fans based on geographical affiliations with clubs. However, it has now evolved into a globalized sport with a heightened focus on entertainment, leading clubs to emerge as prominent global brands.
This transition is clearly reflected in the changing revenue composition of top football clubs over the past 15 years.
.png)
In the 2008/09 season, broadcasting income claimed the largest slice of operating revenue at 42%, closely trailed by commercial income at 32%, among the top 10 clubs by operating revenue. However, the tables had turned by the 2011/12 season, with commercial revenue outstripping broadcasting income.
Fast forward to 2022/23, and the commercial segment has nearly reached a 50% share of the total operating revenue, underscoring the escalating significance of commercial endeavors in the football industry.
The commercial aspect of football appears to have boundless potential, fueled by the global reach and allure of top clubs and their star players. In contrast, the broadcasting facet is showing signs of reaching a saturation point or plateau.
This becomes evident when analyzing the latest English Premier League (EPL) deal in more detail for instance. The EPL recently finalized the sale of broadcasting rights for the 2025-2029 cycle for a substantial sum of GBP 6.7 billion.
While this figure represents an absolute improvement compared to the previous cycle, it actually signifies a relative decrease. This discrepancy arises from the new cycle being extended by one year and including more matches overall, leading to a reduction in the value per match.
Commercial revenue landscape
In the 2022/23 season, FC Bayern München led in commercial revenue, reaching €419 million, which accounted for 56% of the club’s total operating revenue. Paris Saint-Germain FC and Manchester City FC rounded out the podium, both coming very close to the €400 million mark in commercial income. As expected, the impact of commercial income on total operating revenue is significant for these top clubs, with none falling below 41%.
Overall, the EPL is the most represented league with 4 clubs in the top 8 list, all of which are exclusively dominated by the Big Five clubs. Serie A is the only one among the Big Five leagues that is not represented.
.png)
Juventus FC and AC Milan are the closest Serie A clubs to make the list, ranking 10th (€215 million) and 12th (€146 million) respectively. This raises the question of why Serie A appears to be falling behind in this regard.
The top Serie A clubs continue to heavily rely on broadcasting revenue, in contrast to the trend observed among Europe's leading clubs. Juventus FC are the sole exception, where the revenue component from commercial activities accounts for half of the club's total operating revenue.
Juventus is also the only Serie A club that exceeds the €200 million mark in commercial income, which is facilitated by its main shirt sponsorship deal with Jeep, a brand that is tied to the club's ownership. In total, approximately 45% of Juventus' commercial revenue originates from their main shirt sponsor (Jeep) and kit supplier (adidas) deals. However, the agreement with Jeep is scheduled to expire at the end of the 2023/24 season. It would be intriguing to know if Juventus will renew the contract or opt for a different sponsor, along with the figures of the impending deal, as Juventus will return to the UEFA Champions League in 2024/25.
Overall, Juventus FC, AC Milan, and FC Internazionale Milano are the only Serie A clubs that surpass the €100 million threshold in commercial revenue.
.png)
AC Milan and FC Inter have recently been enhancing their performance on the international stage, particularly in UEFA competitions such as the UEFA Champions League. This positive trend is expected to have a favorable impact on their commercial activities.
For instance, AC Milan have recently renewed their partnerships with PUMA and Emirates at improved terms. On the other hand, FC Internazionale Milano faced challenges with payment issues from their previous main shirt sponsor, DigitalBits. They have then secured a short-term deal with Paramount+ for the 2023/24 season and are now expected to finalize a multi-year agreement with Betsson Group starting from the upcoming season.
Jersey value
A reliable indicator of a club's commercial prominence on the international stage is the "jersey value," which represents the combined values of the main shirt sponsor and kit supplier deals.
Unsurprisingly, Real Madrid CF lead the way with a jersey value of €190 million, attributed to their lucrative partnerships with Emirates Airline and adidas.
.png)
It is worth noting that while FC Bayern München topped the list in terms of total commercial income, a relatively small portion of this revenue comes from the main shirt sponsor and kit supplier. This underscores the club's adeptness at bolstering its commercial position through various revenue streams.
Once again, no Serie A clubs feature in this ranking, highlighting the challenges faced by Italian clubs in securing high-value sponsorship deals on par with their European counterparts.
Sponsorship ratios
Examining deal values in absolute terms can be misleading as they offer insight into a club's commercial prominence but do not reveal the relative significance of each deal for the clubs.
Despite different deal values in absolute terms for these selected clubs, it is important to note that the ratio of the kit supplier value to the main shirt sponsor value falls within a narrow range instead, from 1.0x to 1.7x.
Real Madrid CF and AC Milan serve as the boundaries of this range. Real Madrid CF's figures are influenced by their record deal with adidas. At the same time, for AC Milan, this underscores the importance of boosting commercial performance by increasing the kit supplier value relative to the main shirt sponsor value, aligning with the group average.
.png)
A similar analysis can be conducted between the main shirt sponsor and the sleeve sponsor. In this case, the range is broader among the selected clubs, spanning from 4.0x to 7.0x. This variance is largely attributed to the comparatively lower prominence of the sleeve sponsor. It's worth noting that sleeve sponsorships are a relatively recent addition to the football market, previously restricted by regulations. Consequently, there is potential for untapped growth in sleeve sponsorships.
Top industries in football sponsorship
When it comes to sponsor industries, airlines stand out as the sector making the most significant contribution to the commercial income of the Big Five leagues through main shirt sponsors. With just 7 active contracts, their deals are valued at nearly €350 million.
In contrast, the technology, communication, and media industry boasts more than double the number of active deals (17), but falls short of reaching the €300 million mark in total value.
.png)
The impact of regulations on the commercial framework of football is also evident when examining the potential consequences of the ban on betting sponsors imposed by the English Premier League.
Betting is the fifth largest industry by combined annual value of active sponsors (€84 million) and the second largest in terms of number of active deals (12). Currently, 8 EPL clubs have deals in place with betting companies, and the consequences of the ban starting from the 2026/27 season are expected to be significant.
Similarly, Serie A has implemented the "Decreto Dignità" regulation, which bans betting companies from appearing on clubs' jerseys. This is already generating discussion around the rumored deal being negotiated between FC Internazionale Milano and the Betsson Group.
What does the future hold?
Whether the trend observed over the past 15 years is expected to continue will depend on several factors linked to consumer perceptions of the sport.
While the shift of football towards entertainment, global fan engagement, and the transformation of top clubs into global brands suggest a continued dominance of the commercial component, it's essential to consider the impact of new football regulations and evolving media landscapes.
Additionally, the emergence of novel ways to consume the sport through digitalization may further shape the relative importance of different revenue streams in the future.
