The football World Cup is the world’s biggest sporting event, with the final regularly attracting more than a billion viewers. The popularity of the competition is such that in recent years there have been multiple bids from nations keen to host the tournament. Such is its pull as a spectacle that it has even led to some controversial decisions about where it should be staged.
Qatar will be hosting the 2022 tournament and seen by many as an unusual choice for a heat-intolerant sport played outdoors in summer. In response to this demand, FIFA has introduced new measures to ensure that any nation wishing to host future editions of the tournament must first demonstrate that they meet a set of predefined criteria regarding their ability to do so.
These “bid documents” include details on how and where sponsorship will be sourced and how much exposure individual stadiums can offer potential partners. While these are primarily focused on domestic sponsorship opportunities, international ground naming rights deals remain a lucrative option for interested parties.
Owning the naming rights in European football
European football is big business. And like any big business, there are plenty of companies and individuals looking to cash in on the sport’s popularity. One way they do this is by buying the naming rights to football stadiums. This means that the stadium is named after the company or individual that purchased the rights.
Some notable examples include the Allianz Arena in Munich (named after the German insurance company Allianz), the Etihad Stadium in Manchester (named after the Abu Dhabi-based airline Etihad Airways), and the Wanda Metropolitano in Madrid (named after the Chinese conglomerate Wanda Group).
There are a few exceptions to this rule. The San Siro in Milan is named after the district in which it is located, and the Stadio Olimpico in Rome is named after the ancient Olympic Games.
What are the benefits of owning a stadium?
Stadiums are not only used as playing grounds by their home teams, they also act as significant revenue generators for the host cities and states. Due to the high number of events that take place in stadiums each year (including sporting fixtures, concerts, exhibitions and conferences), stadiums are a lucrative commercial asset.
Ownership of a stadium may also attract other commercial partners looking to leverage the visibility of the stadium for their own benefit. Stadium naming rights are a classic example of this, as sponsors gain valuable exposure through the daily viewing of their logos by stadium visitors.
These kinds of deals do come with their own share of challenges however being an advent follower of sports and statistics do come with perks, such as knowing how to do online sports betting as a hobby.
The Importance of Sponsorship in Football
It is clear that naming rights can be a hugely profitable commercial endeavor. However, they are far from the only way in which sponsors can be drawn into the footballing world. There are a host of other commercial opportunities to be had, including the sale of stadium advertising boards, stadium souvenirs and team kit sponsorship.
The latter has become particularly lucrative in recent years, with Nike, Adidas and Puma all currently paying around $100 million a season to have their logos displayed on the shirts of major European clubs. The growing prevalence of sponsorship in the footballing world has led to the rise of a new profession.
Football sponsorship and commercial experts are increasingly needed to help negotiate and develop these deals for clients. They are also required to explain the nuances of this increasingly complex commercial strategy to clients who may not be fully clued up on the ins and outs of the footballing world.
Why Doesn’t Everyone Do It?
The rise of sponsorship deals has not been welcomed by all in the footballing world. Many fans resent the commercialization of the beautiful game, while some clubs resent the fact that they are not able to cash in on the commercial opportunities that are available to their competitors.
This is particularly true of smaller clubs, which are less able to leverage sponsorship deals due to a lack of global brand recognition. One potential red flag for clubs considering sponsorship deals is that sponsors may wish to extend their commercial relationship with the club beyond the end of the contract.
This has led to some controversial situations in which clubs have been forced to change their names, with Manchester United famously becoming Manchester United Football Club (MUFC) after a contract extension with insurance company AIG.
Stadium naming rights are a lucrative commercial opportunity that is increasingly common across Europe. They are, however, not without their challenges and are often unpopular with fans.
The commercial realities of football mean that they are likely to become increasingly fundamental to the game, with clubs increasingly relying on sponsorship deals to cover the costs of running their association.
In light of this, clubs would be wise to take advantage of this opportunity to boost their income, particularly smaller clubs who are less able to fully commercialize their brand without assistance.