World Cup Sponsors: A Primer

With the World Cup on the doorstep, we thought we would discuss some of the sponsors and sponsorships that are an enormous part of the money making power of the tournament. Our survey of non-soccer fans has identified Gatorade and and Red Bull as prominent soccer sponsors, yet neither will feature prominently during the World Cup.  FIFA sponsorships are big business and only a select few can join those storied ranks. Click on our Twitter feed on the right to see some of the new World Cup commercials from around the world.

Tier-One FIFA World Cup sponsors pay almost $125 million for the right to reach 30 billion sets of TV eyeballs and almost 3 million stadium attendees.  Add in the enormous investment necessary to leverage the FIFA relationship (through ad materials, hospitality events, commercials, etc…) and only a serious company can join the elite group of eight World Cup partnerships offered by FIFA.  It was therefore surprising when it was announced that little known Chinese renewable energy company, Yingli Green Energy,  had joined titans such as Budweiser and McDonalds in the upper echelon of sports sponsorship.  The deal entitles Yingli to stadium advertising, the use of the FIFA mark, prime real estate in fan zones and much more.

Few events offer the worldwide reach of the World Cup and Yingli is taking an enormous gamble that sports fans will bring market share.  According to the Sports Business Journal, “Yingli signed its World Cup sponsorship because it believed soccer’s popularity would help the company raise brand awareness in key markets such as Germany, Italy and Spain, and potential markets such as Brazil and Africa.”  In addition, Yingli is hoping to develop relationships with other business and business leaders to increase brand awareness and sales.   Yingli develops, manufactures and sells photovoltaic modules and trades on the NYSE.  The company joins new MLS sponsor Continental Tire (a lower level World Cup sponsor) under the FIFA umbrella.

Some other World Cup sponsorship notes:  McDonalds will be leveraging its World Cup sponsorship around the world….but not in the United States.  For a new adidas ad, click here.    For an entire list of FIFA sponsors, click here.

Selling the Gear: A Look at Soccer Merchandising

On the move for the next couple of days, so here is our quick take on a recent article about the sale of soccer merchandise in the United States and around the world. OregonLive presents an interesting article on Adidas marketing efforts for the 2010 World Cup.  The article provides in depth analysis on the soccer apparel industry and efforts to sell sporting goods in the current market.

The article focuses on Adidas’ worldwide efforts to market its product and the importance of the World Cup in spreading brand awareness.  Sales for the sporting goods giant are down significantly, and World Cup 2006 provided a significant boost that Adidas hopes to equal or surpass. However, for MLS fans, there is this juicy quote:

“To build its U.S. soccer edge, Adidas paid a reported $150 million over 10 years to sponsor and outfit men’s Major League Soccer, which is expanding to 18 teams and drew 3.6 million spectators this year. Stu Crystal, MLS marketing vice president, said annual sales of league-licensed merchandise has grown more than 600 percent, to $300 million, since the Adidas partnership began in 2005. “Being connected to Major League Soccer gives Adidas exposure to millions of soccer fans and reinforces its position with the sport,” he said.”

While the Beckham effect is certainly an enormous contributing factor to the exponential growth referenced above, this is obviously a good sign for the league.  Selling merchandise can have a snowball effect, as brand awareness can ultimate increase sales.  The article provides some great data and we recommend the read.

Business Bits: US Qualifier and Big Apple Soccer

The United States continued its qualifying campaign in Nashville Tennessee with a match against Trinidad & Tobago.  ESPN2 televised the game in prime time on the East Coast and added a 30 minute pre-game show with Stone and Lalas (and an over-hyped cameo from Barack Obama).  There was a wide range of national advertisers for the game including Castrol, Cooper Tires, Dunkin Donuts, Irish Spring, AT&T  Bud and Heineken.  Captain Morgan, so present during the El Salvador game, was not featured.  ESPN2 also added Pedro Gomez as a sideline reporter which enabled a halftime interview with Bob Bradley.   Disappointingly, attendance was announced at just under 30k

SBI is reporting the formation of a USL-1 side in New York for 2010.  The team will play at Hofstra’s 13,000 seat football stadium. The ownership group is fronted by Doug Petersen and Jo-Ellen Treiber, longtime residents of the area.  In addition ot Hofstra, the team expects to play at additional locations in the New York City area.   However, Petersen has indicated an intent to construct a soccer specific stadium in Queens.

The addition of  a New York franchise is important for a USL that has been losing teams to MLS at an alarming rate.  Three of the most successful franchises: Portland, Seattle and Vancouver, are slated to join MLS by 2011.   However, this may also crush dreams of a second MLS franchise in New York.  There had long been rumors of interest by New York Mets owner Fred Wilpon; a USL franchise in Queens would certainly seem to preclude such an option.

In Portland, the Oregonian provided some detailed reporting on the newly granted Portland franchise.  Specifically, the article focuses on the apparent funding gap between Merritt Paulson’s proposal and the available funds.  According to the article, there is more than a $28 million funding gap to fill if the City is able to sell more than $35 million in bonds in a tough market (if not, the gap is much larger).  MLS has cast its lot in Portland and now must make it work.  The announcement of a Portland/Manchester United relationship could add some funds to the deal, but it is important for the League and ownership group must make this work.  pge

Business Bits: Bye Bye Barca

barcaMLS and FC Barcelona announced today that the storied Spanish Club is withdrawing its bid to enter the League in 2010.  Citing the economy and market conditions, the parties mutually agreed to walk away from the proposed Miami franchise.  We have previously posted about the viability of the South Florida market. With Barcelona out of the way, things are definitely looking up for Vancouver, St. Louis and Portland. According to this post at the 24th minute, Vancouver and Portland have wrapped up the slots for the next round of expansion.

In other news, tickets for the June World Cup Qualifier against Honduras have gone on sale.   The game is scheduled for Soldier Field, and interestingly, will be shown on ESPN Classic and Galavision.  ESPN seems to be playing games here.  There is no good reason this game isn’t on ESPN or ESPN2, other than using Classic as a pseudo pay per view.  Based on the ratings from the last qualifier, the Sports Leader is counting on a big increase in subscribers for Classic because of the game.

Finally, according to a story in the Daily Free Press, the Revs seem to be weathering the economic slowdown quite well.  The paper interviewed Liz Summers, the Revs’ director of communication:

“[Soccer] have not been affected as you may have seen others,” she said. “It’s an entirely different season ticket pack, discounted regardless of the economy. We’re a different entity because our value point, our price point, is at a much different level.”

Individual ticket prices range from about 15 to 20 dollars Summers said, and the Revolution also offers free parking, which helps keep them “a little bit of a different entity.”

“Season ticket sales are on par, if not ahead,” she said. “In ticket sales we’re doing very well. Soccer is still growing. There’s a line of cities trying to get into the door to get teams.”

Summers also said the Revolution has long-term deals for advertising and are increasing their advertising to online, adjusting to where the marketing deals are. That specific move has nothing to do with the economic issues, she said.revs

T.V. Tidbits: US/Mexico TV Ratings & Red Bull Rights Deal

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MLS ratings may be flat, but the U.S. National Team continues to draw well on TV.  In televising the  US/Mexico clash on Wednesday,  ESPN2 logged a .8 rating (over a million viewers) setting a new record for a World Cup Qualfier.  Add in the more than 5.5 million viewers on Spanish Language TV and close to 7 million people in the States watched the 2-0 US win on television.  As we have said before, there is a big audience for soccer in this country, MLS just needs to find a way to capture those eyeballs.

msg Meanwhile, according to reports, the NY Rebulls have signed a three year rights deal to televise Red Bull games on the MSG network.  While financial terms were not announced, New York fans will be pleased to have a destination for local broadcast of at least 20 games.  The deal also includes a studio show and Shep Messing!red-bulls2