The changing face of football sponsorship – key players

04.08.2020

The football sponsorship industry has seen huge growth over the past few decades – according to KPMG Football Benchmark data the total value of sponsorship across the big five football leagues in 2020 is more than EUR 3.3bn annually. In our previous article, we have shown how the football sponsorship industry evolved, where it is heading, and analysed the key trends driving market growth. We concluded that globalisation, digitalisation and a developing media landscape have changed the face of top-tier football sponsorship, creating new and exciting strategic and commercial opportunities. While the current Covid-19 pandemic shocked the football sponsorship market as well, on the longer term it is likely to inspire both more cautious and innovative solutions for all market players, including football clubs and players and corporate sponsors alike. In this article, we look at the sponsorship market from their perspective.

A new globally diverse fan base has opened opportunities for international brands looking to leverage the profile, appeal and brand equity of leading football clubs.

According to KPMG Football Benchmark, the Middle East represents the largest sponsorship investor into topflight football at EUR 200m p/a – indeed, Middle Eastern brands have increasingly turned to some of the most prominent football clubs for sponsorship opportunities. Some of the largest European clubs are now lucratively sponsored by the big three Middle East airlines. English giants Manchester City are sponsored by Etihad Airways, PSG, AS Roma and FC Bayern München are backed by Qatar Airways, while Real Madrid, Arsenal, AC Milan and SL Benfica all carry the Emirates logo on their shirts. The UAE airline, whose investment was virtually non-existent less than 10 years ago, has emerged as the third largest sponsor of European football (behind adidas and Nike), investing more than EUR 175m annually across several major deals.

Foreign corporate sponsorship investment into the top tier of global football is not only reserved for brands looking to raise global brand awareness and equity, however. Localised brands are increasingly signing regional partnership agreements with top tier clubs to capitalise on the profile and popularity of the club and its profile in their local market, amongst new and existing customers. For instance, there are no less than 16 regionally focused Middle Eastern brands in partnership with top European football clubs, as they leverage the vast football support in the region to enhance their brands – from Ooredoo the large regional telecom provider investing EUR 4.5m in PSG, to First Gulf Bank (FGB), one of the major leading banks in the UAE, agreeing on a partnership with Manchester City FC that included the launch of the first English football club credit card in the UAE. Other regions, particularly Asia look to capitalise, too. Take Barcelona’s lucrative four-year sponsorship deal with Japanese e-commerce brand Rakuten or China’s LD Sports recent front of shirt deal with Southampton FC. Both are good examples of relatively less known, but ambitious brands capitalizing on the vast exposure and brand-building opportunities that very few other sponsorship properties offer from a global audience.

The Bundesliga presents a further pattern: its clubs typically exhibit a greater degree of loyalty to German-owned brands, particularly when it comes to marquee sponsorship rights such as technical and shirt sponsor. 14 of the 20 Bundesliga club shirt sponsorships are from Germany-based companies. Champions Bayern Munich have long had a history of loyalty towards German brands, reserving its top sponsorships for the trademarks of Deutsche Telekom, adidas, Audi and Allianz.

Increased globalisation of the game and growing international appeal have changed the face of the type of brands involved at the highest level: growing sponsorship values has increasingly limited the types of sectors and companies that can now afford this type of investment. According to KPMG Football Benchmark, shirt sponsorship across the 20 English Premier League clubs comes from only six sectors, including; Automotive, Airlines, Banks, Gambling, Retail and Entertainment. In fact, shirt sponsorship from airlines, banks and automotive brands represent more than half of the total sponsorship across the big five leagues. But this trend will no doubt reverse over the next few years as the fallout from the Covid-19 pandemic materialises, with large implications on many clubs. Will airline, automotive, retail, banking, hotel groups and even tourism destination brands be able to justify spending such vast sums on football sponsorship in the future? A number of sectors and brands have remained relatively immune to the pandemic, others have prospered. It is likely that the composition of football sponsorship industries and brands will change to some degree in the future as a direct result, with perhaps greater investments and number of sponsorship deals observed from the media, telecoms, pharma and food sectors. 

Kit sponsorship across the big five leagues is dominated by adidas and Nike – with a combined total annual sponsorship investment of EUR 679m p/a, they represent 68% of the total kit deal spend. Our chart shows the investment values of the top kit suppliers in the big five leagues.

Both adidas and Nike have superior marketing and distribution capability and an impressive roster of global sports superstars at their disposal to promote the club, player and brand to a new audience globally over various media channels including social media. Although the values seem dramatically high, there are strong economic justifications for adidas to part with EUR 120m p/a to manufacture Real Madrid’s shirt and the EUR 105m p/a paid by Nike to FC Barcelona. Of course, adidas also manufactures and markets the Manchester United shirt for EUR 85.4m p/a, capitalising on the club's international following but no doubt hoping for on-field performances to improve over the long term. Liverpool FC’s move from New Balance to Nike as kit manufacturer from 2020/21 comes as no surprise following their recent successes at a domestic level and in Europe. Although the quoted annual value of the new deal with Nike is said to be lower than the annual New Balance value, the prospect of far superior global shirt sales under Nike and a greater share of shirt sales fee is sure to vastly improve the overall economic package for Liverpool FC. PSG’s comparatively smaller, EUR 25m deal with Brand ‘Jordan’ represents an innovative trend - a partnership that capitalises on shared brand synergies to engage with new customers and fans from not only within football but from the world of fashion and other sports.

Social media is a lucrative playground both for clubs and players. Many top clubs provide sponsors with a vast global online following to leverage as part of its sponsorship activation programme. According to KPMG Football Benchmark, Real Madrid CF has 240m followers across all social media platforms, with the second highest level of online engagement to FC Barcelona, going a long way to justify the large sums that are paid. However, players can also utilise it to increase their profile, generate commercial revenues and stay in touch (indirectly) with their fans. Interestingly in many instances, players have more followers than their teams. The most extreme example is Cristiano Ronaldo, who is followed by almost five times as many people as Juventus FC – a testament to the emerging trend that elite players can build a profile independent from their employers, while also helping raise the social profile of their club.

KPMG Football Benchmark provides a rich source of rights-holder performance metrics including key KPIs of all relevant social media channels in the sports sector and more than 5,200 commercial deals across 400 football clubs and competitions from 35 countries, enabling important sponsorship benchmarking activities, a vital element within the mix of sponsorship evaluation.