FIFA to reap US $1.4 billion in sponsorship revenues from Brazil 2014
What: Brazil 2014 sponsorships will reap FIFA revenues of $1.4 billion
Why it matter: Because the FIFA World Cup is sponsored by 24 leading brands, most notably Coca-Cola, the sponsor with the highest demand among all South American teams.
Translated by Candice Carmel
With only a few months to go before the start of the 2014 soccer world cup in Brazil, there is already a clear winner: the Fédération Internationale de Football Association (FIFA), which will rake in at least $4 billion (3 billion euros) in sponsorships and television rights for the sporting event.
The revenue projections were made by FIFA secretary general Jerome Valcke above, who said that $2.6 billion (1.95 billion euros) of the total will come from worldwide TV rights of the matches, with the other $1.4 billion (1.05 billion euros) raised from sponsorships deals with 20 major companies, most notably Coca Cola, the sponsor in highest demand among the different participating teams.
Sponsorship revenues projected by FIFA are 10% higher than those obtained in the last World Cup in South Africa, and are divided among three categories of affiliated marketers: partners, national sponsors, and international sponsors.
In the first category, the partners are Adidas, Coca-Cola, Hyundai, Emirates, Sony, and Visa. They are followed by international sponsors: Budweiser (which will finally be able to sell beer, despite the fact that Brazilian law prohibits its consumption in sports facilities), Castrol, McDonalds, Continental, Johnson & Johnson, Oi, Moypark, and Yinglisolar.
The third group is composed of national sponsors: ApexBrasil, Centauro, Garoto, Itaú, Liberty Seguros, WiseUp, Fifa.com, and Football for Hope.
In the 2010 South Africa World Cup, FIFA earned approximately 2.73 billion euros in television and sponsorship rights, and posted expenses of 970 million euros. For Brazil 2014, FIFA expects to post revenues of 3 billion euros, or 10% more than the last World Cup, confirming that even in times of crisis, elite soccer continues to be big business.
Protecting the brand
FIFA also reported that revenues from ticket sales are a minor source of income compared to the previous two categories, since TV rights and sponsors are the main revenue sources of the international soccer body, which is more than willing to protect its business and take action against piracy.
Valcke said that FIFA will intensify its fight against piracy in Brazil, because in the past six months, the soccer body presided over by Joseph Blatter has detected "some 100 cases of brand infringement in Brazil."
Eighty percent of those brand infringement cases come from small businesses "using the mascot or emblem of the World Cup," which cause only a small economic impact. "The remaining 20% are caused by large corporations, who are aware of what they are doing, and it is this group that we will pursue through legal action," said Auke-Jan Bossenbroek, head of brand protection for FIFA.
In addition, FIFA wants to limit the peddling of World Cup-related products in and around the soccer stadiums where the matches will be held. During all games, two or three members of the organization will tour the perimeter of the stadiums and remain in contact with the authorities to avoid any unauthorized commercial activity.
The top banana of sponsorships
Coca-Cola is one of the most solicited brands for sponsorships by the soccer teams participating in the World Cup. In fact, it holds the most sponsorship contracts among the South American teams. The multinational is one of the official sponsors of the Argentina, Chile, Uruguay, and Ecuador soccer teams―four of the six teams selected by CONMEBOL, the South American Soccer Federation, to play in the world championship starting in June.
The six South American teams will receive a total of $180 million from their sponsors, according to a study by Euroamericas Sport Marketing, a marketing agency.
The firm notes that this is the highest sponsorship investment in the history of the World Cup, surpassing that of many European teams that will be participating in the event.
After Coca-Cola, the most prominent sponsors include Adidas, Claro, Gillette, and SanCor. The countries whose soccer teams have snagged the largest sponsorship contracts to date are Argentina, followed by Brazil, Colombia, Ecuador, Chile, and Uruguay.
And the beer?
Beer will enjoy the greatest product sponsorship presence at the World Cup. The Budweiser brand will be visible in Brazil 2014 thanks to its contract with FIFA, while each national team from the region will have its own local beer sponsor: Argentina with Quilmes; Colombia with Águila; Chile with Cristal; Ecuador with Pilsener; and Uruguay with Pilsen.