Year In Review: No Signs Of Slowing Down, 2016 Featured New Record-Breaking Deals
The global sports industry has shown no signs of slowing down in ’16, with a number of record sponsorship deals and large-scale marketing campaigns. While ManU’s $71M-a-year deal with U.S. carmaker Chevrolet reigns supreme, other European football clubs were able to significantly increase the value of their sponsorship agreements over the past 12 months. Spanish powerhouse Barcelona recently signed a shirt deal with Japanese e-commerce retailer Rakuten. The four-year deal has an estimated value of €220M ($235.2M), making it the second-highest shirt deal in European football. Barcelona, however, could reportedly receive as much as €61.5M ($65.8M) annually due to performance incentives such as winning the UEFA Champions League. The deal came on the heels of a record-setting extension of its kit deal with Nike. Spanish media reported that Barcelona’s new agreement with the U.S. sportswear company could be worth €155M ($174M) per season. Pressured by such figures, current EPL leader Chelsea took the somewhat unconventional step of terminating its kit deal with adidas ahead of time, with the intention to receive more money from one of its rivals. Nike jumped at the opportunity and agreed to a 15-year, $74M-per-year deal with the Blues, starting in ’17-18. The figure represents a 100% increase on the club’s current contract with adidas, worth “only” $37M annually. Chelsea, owned by Russian billionaire Roman Abramovich, now has the third-highest valued kit deal and shirt sponsorship agreement among European football clubs. In the kit category, Chelsea only trails La Liga sides Real Madrid, which agreed to a $130M-a-year extension with adidas earlier this year, and Barcelona. The Blues’ shirt deal with Japanese tire brand Yokohama, valued at $55M annually, also ranks third, behind ManU and Barça. Sports consultancy Repucom, now Nielsen Sports, said that corporate spending on football shirt sponsorships in Europe’s top six divisions has doubled since '10, reaching €830M ($888M) this year.
FOOTBALL RULES: It was not only club teams that benefited from the increased spending. The German FA (DFB) and the English FA both renewed their contracts with official suppliers adidas and Nike, respectively. The new agreement between the DFB and adidas, which will run until ’22, has an estimated value of $57M annually, making it the most lucrative deal in the federation’s history. Nike in early December reached a new 12-year, £400M ($507M) deal with the FA to supply the Three Lions shirts through ’30. The battle between adidas and Nike for European football supremacy has shifted from quantity to quality. Both companies have drastically reduced the number of partner clubs and federations, instead fighting for the crown jewels among Europe’s football elite.
ALL ASIA: The influx of Asian money that dominated the headlines in ’15 continued throughout ’16, although on a noticeably smaller scale. After acquiring a 20% stake in Atlético Madrid in ’15, China’s Dalian Wanda secured the naming rights to the club’s new stadium for an estimated €100M ($105.5M) over 10 years. Wanda also signed a deal with basketball governing body FIBA to sell and market int’l sponsorship and licensing rights until ’33. Another Chinese company, Alibaba, agreed to an eight-year partnership with scandal-plagued FIFA as the presenting partner of the annual Club World Cup.
CORPORATE RESPONSIBILITY: In a year that continued to raise questions about the integrity of sports governing bodies, including FIFA, the IOC and the IAAF, corporate sponsors largely failed to use their financial leverage to demand change. While some sponsors came out calling for more transparency, only a few actually severed ties with the beleaguered bodies. Nestle and adidas, which both ended their deals with the IAAF following doping and corruption scandals, were exceptions.
GLOBAL EVENTS: Euro 2016 and the 2016 Rio Summer Olympics dominated the summer months, and official as well as non-official partners took advantage of the billions of eyeballs watching the global sporting events. Beer brands spent their money on advertising campaigns surrounding the football tournament in France, while official IOC partners such as Visa, Samsung and P&G set their sights on Copacabana Beach to woo people with creative and emotional campaigns. After a year with two high-profile sporting events, corporate marketing departments and agencies are already prepping for ’18, which features the PyeongChang Winter Games and the FIFA World Cup in Russia.