Already this year, an estimated US$1.7 billion has been spent by media owners to secure the (mostly TV) broadcast rights globally to the FIFA 2014 World Cup in Brazil, and hundreds of millions of dollars more spent by both multinational and local brands to sponsor the world’s largest single sporting event. And it’s easy to see why when a measured audience of 530 million watched the 2010 World Cup final between Spain and The Netherlands, an audience that is widely estimated to have actually been closer to one billion when viewers in public places are added.
Here in Asia Pacific over US$18 billion will be spent in sports sponsorship in 2014, according to a PricewaterhouseCoopers report. This figure is also forecast to grow at a compound annual growth rate (CAGR) of 4.4 per cent, all adding up to a very lucrative, and growing, association between global and local brands and sport.
Two thirds or US$12 billion of this expenditure will be spent in sports sponsorship by brands, with the remaining six billion dollars spent by media owners for the broadcast and digital rights for major sporting events.
There is no shortage of sports events with which brands can associate themselves, with 2015 presenting the rugby world cup in the UK and here in our region the International Cricket Council (ICC) Cricket World Cup in Australia and New Zealand, the Netball World Cup in Sydney, Australia, and the 2015 Asian Cup (soccer) also in Australia.
Sport transcends political, geographical, ethnic and economic divides, and some would say it actually unites disparate even warring ‘tribes’ in the unified support of their chosen sporting team. The long history and legacy of participation in sport from childhood parks and strips of dirt fashioned as pitches, to the multi-billion dollar stadia built for the Olympics, world cups and domestic sporting leagues, ensure sport will continue to be an attractive environment with which to associate your brand.
From the industry perspective, sport continues to be a competition for the consumer dollar. The rich television broadcast rights contracts are proving to be the foundation for investment back into the marketing and development of each code, as soccer, cricket and basketball in particular across Asia compete with each other and with other codes such as rugby, tennis, motorsports and the rise of mixed martial arts.
Adding to the revenue from broadcast rights, sporting codes and teams compete to tap into the rich veins of ticketing, merchandise sales – where one marquee player can sell thousands of shirts – strip sponsorship and ground signage sales, all adding up to a multi-billion dollar opportunity for the codes and teams themselves.
The media owners themselves have to monetise their own expense in securing the lucrative broadcast rights to their domestic sporting leagues, leveraging the live event nature of television sport to attract large audiences to then cross-promote other entertainment content.
The sports marketing and sponsorship industry looks set to grow in expenditure, investment and competitiveness to secure loyal audience following and brand advertising dollars.
Paul Fisher is Nielsen's managing director of the Sports Industry Group for Southeast Asia, North Asia and Pacific