Cooperation with sponsors brings football clubs financial revenues. Athletes are the new rock stars, adored by millions of people. They are role models, idols, and ideals. Partnering with people of such fame is an honor for every brand and company.
The value of contracts steadily increases year after year. Clubs get more and more exciting offers. The most lucrative agreements go to the European football leagues. The most considerable earnings come from the football sponsors of the English Premier League, Bundesliga, Spanish Championship, Serie A, and the French Championship clubs, which are also the most popular leagues here. They all receive multi-million dollar sponsorship deals.
How sponsorship came about
The practice of sponsoring football clubs first emerged at the Olympic Games. Gradually it gained popularity by introducing the concept of "sponsorship deals" into the sporting world. Today, football clubs derive their revenue mainly from agreements. They are considered to be the most lucrative industry for professional teams. Famous football clubs can earn around 3 million euros per year.
Sponsorship and advertising should not be confused. The exclusive right defines the former for the sponsor. Any company can advertise products at a match, but if the club has an investor, the team will only use a specific category from the sponsor. For example, to drink one manufacturer's mineral water, wear his uniform or use his company's equipment for training.
How the value of the sponsorship agreement is determined
The amount to be paid for the sponsorship package is agreed upon between the two parties. It is the revenue the club will receive each year during the contract.
The price negotiation phase is considered the most difficult, as both parties have to assess the prospects of working together. Several criteria help in determining the value:
- Level of fame of the club;
- The sporting success of the players (cups, championship victories, titles, etc.);
- The opportunities in the region in which the club is based;
- Size of the fan base;
- The number and level of matches planned for the season.
Brands are picky. Without an army of loyal fans, the football team has no value. The more fans, the higher the cost of cooperation. No one will work on altruism. If the players have prospects to reach the world arena, football clubs' sponsors will see it. Even if a team is playing at the city level today, it may be attractive to a sponsor who sees the potential in developing the athletes.
What is included in a team's sponsorship agreements?
The key to success in finances is the structure of agreements.
Modern sports involve the activation phase of the sponsorship agreement. It includes:
- The use of stadiums, training bases, and administrative buildings as advertising venues;
- Joint promotions between sponsor and team;
- Gaining a competitive edge;
- Opportunities to involve players in promotional campaigns.
Sponsorship portfolios are formed based on the size of the loyal customer base. One of the world's most famous clubs, Manchester United, has four lines of partners: global, regional, communications, and financial.
A sponsorship agreement is not just about cash payments. It can also be barter contracts. For example, you are shooting commercials, participating in feature films, getting uniforms, equipment, and other equipment for the team.
The supply of uniforms with the technical sponsor's logo is considered a versatile package. The uniforms are designed for each upcoming season with the official sponsor's logo for the players. Members of the team may not take to the field in uniforms without the logo of the title sponsor or any other brand. Violation of the contract results in heavy fines and termination of the agreement.
Formats for sponsorship
There are several types of sponsors in football that determine the amount of investment and the rights of advertising integration.
A technical sponsor is a company that has received the rights to sew the outfit and put the logo on the sports uniform.
The title sponsor is the full sponsor of the team. He is the one who finances the team for 100% and receives the company logo on the players' uniforms. This type is considered the most prestigious. Title agreements along with technical sponsorships are the most lucrative.
The general sponsor covers up to 50% of training costs, away matches, and preparation for them. He gets the right to naming rights. These are often the names of stadiums and training centers.
A growing trend among sponsorship contracts is transferring the naming rights to your home stadiums. Clubs give the right to name their stadiums after a brand/company/sponsor.
Modern football also can sign deals with financial, communication logistics, and other companies. Such agreements are called segment agreements. They can be either on an economic or a barter basis.
Sport is one of the most popular sponsorship niches in every country. Every year, the demand for collaborations only grows to make the contracts. Clubs can get cash deals based on advertising integrations and partnership agreements on a barter basis.