With Euro 2016 on the horizon, domestic leagues across the continent reaching their conclusions – some featuring closer title races than others – and May’s UEFA Champions League final approaching, Marco Nazzari, Repucom’s Chief Revenue Officer in Europe and the head of Repucom’s Italian division, offers his assessment of the commercial health of the European sports sponsorship market.
Power play: the mega-clubs
“They are powerful as probably never before,” says Nazzari, reflecting on the major European football clubs. Indeed, the term ‘club’ may even be a little outdated: the continent’s heavyweights, the likes of Real Madrid and FC Barcelona, Bayern Munich, Manchester United and Manchester City, are first and foremost sports teams but have also evolved into media houses, sales machines, digital activation agencies, major retailers and, above all, huge global brands. “They are truly global properties with wide international fan bases that they have started to monetise in quite an effective way,” notes Nazzari. “In the past Real Madrid, for example, turned themselves into the galacticos even when they were not winning, putting together the best players; they built the brand! What I perceive now, even from other top properties like Formula One is that they look at football clubs as potential competitors.
“A club like Manchester City, with a network of clubs around the world, is a really great sponsorship platform,” he adds. “In future, there will be more and more big investments in top properties than middle-sized investments in middle-sized properties; they are winning the battle, because for a brand who want to be recognised as a worldwide leader it will be easier to go to a Real Madrid than to have a football sponsorship strategy based on ten different clubs around Europe. It will be more effective and easier to get in touch with the huge amount of fans a Manchester United or Real Madrid has around the world.”
Closing the gap to the truly elite level clubs will become more difficult by the season, such is the global brand appeal of the top teams. But, pointing to an example from his homeland, he insists it can be done. “Juventus, for example, doubled its turnover in the past five years, through sporting performances but also great organisation, the new stadium and by using opportunities around the team to the best effect.”
In the right region
Manchester United were the pioneers of the regional or territory-specific partnership model, a piecemeal commercial approach which has been replicated by the major clubs in the Premier League, La Liga and the Bundesliga in the past few seasons. Nazzari is certain it is no flash in the pan. “As a club, once you have built your brand you can use your brand as your business card in every market,” he points out.
“It’s like the Olympic rings: if a company has the Olympic rings on its business card it means they are top-level and leading their industry segment. A partnership with Manchester United, Real Madrid or FC Barcelona in many markets has the same effect. If you partner with a Real Madrid as a telecommunications firm in Indonesia you are a leading telco in Indonesia, because you use the power of the brand to boost your business. What I see as the difficult part is to transform that association into business; it might be challenging for a club with many of these types of partners to support the business development objectives of the partners because the association itself is not enough.”
While clubs like Manchester United routinely utilise former players-turned-club ambassadors to help activate its regional or territory-specific deals, Nazzari says it is a major challenge to do more – especially in the cut and thrust of a long domestic season. “Activating on the ground is difficult because you can only organise a pre-season tour in one or two markets – but even with a winter break you cannot be there all the time. Using the players is difficult. Digital can help you get in touch with the fans more easily and activate more effectively.”
The league of leagues
Europe’s five major football leagues – England’s Premier League, Spain’s La Liga, France’s Ligue 1, Germany’s Bundesliga and Italy’s Serie A – tend to dominate European competition, as well as commercial income. And that is not a state of affairs that Nazzari envisages changing any time soon. “I would say Russia, if they can overcome the difficult economic situation, has potential,” he says, “especially if they continue professionalising the league and the clubs. The Netherlands and Belgium are in good shape, but it’s difficult to construct a league like the Premier League or La Liga in a smaller market.
“Even within the top five leagues there is a ranking that is difficult to change,” Nazzari suggests. “The Premier League is absolutely at the top. La Liga is working a lot to become an appealing and interesting league; historically they have based their success on FC Barcelona and Real Madrid but they are trying now to have more appeal around the world. Bundesliga is strong internally but the appeal of German football outside Europe still really revolves around Bayern Munich.
“The Italian league is at risk of being the fifth of the top five, while in Ligue 1 we will see what happens after Euro 2016. At the moment it’s Paris Saint-Germain and the rest are really local, in terms of fan bases, but they have built a lot of new stadiums which is an opportunity for clubs to increase their revenues.”
Euro 2016: opportunity knocks
This June, 24 teams will converge on France for the largest European Championships since the tournament was established in 1960. UEFA’s expansion of the tournament – between 1996 and 2012 there were 16 teams in each edition of the finals – opens up new commercial opportunities, according to Nazzari. “With ten cities, six preliminary groups and more teams, it will really involve the whole of the home country,” he suggests, “and of course TV coverage will be massive, not only in Europe but internationally – that’s good for tournament sponsors, domestic partners and the partners of the various teams involved. There is a huge opportunity to engage consumers around Europe, and for the international, pan-European partners to get huge visibility and capture the attention of the public.”
As well as the usual heavyweight nations, with the notable exception of the Netherlands, the tournament will feature several teams playing in the finals for the first time ever, or the first time in many years. Teams like Northern Ireland, Albania, Wales and Iceland are likely to provide some of Euro 2016’s most memorable storylines and Nazzari expects that to be reflected in sponsorship and advertising campaigns. “We have clients that have asked us already about specific nations who are participating for the first time,” he says. “That idea partnering with a smaller nation, with a great story of participating for the first time could be very effective. If you have qualified for the first time you will be particularly crazy for your team and proud of being part of the tournament, and likely be more engaged.
“There will also be possibilities for big international sponsors to activate in almost every market. Within markets, of course, the performance of the national team will shape the emotional connection to the tournament and that will probably have an impact on sponsoring brands. There may also be some important learnings for brands in terms of activating in many different markets, looking ahead to Euro 2020 [which will be played across 13 European cities rather than in a single host nation].”
Beyond football: pan-European potential
While football is perhaps the only sport that truly straddles the entirety of the continent, Nazzari is keen to point out some of the other pan-European opportunities for brands to make an impact, in 2016. Chief among them is the Six Nations Championship, the 2016 edition of which is shortly coming to its conclusion.
“It’s very interesting because not only does rugby have some good numbers in key markets, but it also has a great image as a sport. There is the opportunity to get in touch directly with consumers throughout the tournament.”
With two years until the next Winter Olympic Games, winter sports is another area where Nazzari senses growth potential. “Despite the most recent season being quite warm [several FIS World Cup events were postponed or rescheduled due to a lack of snow in Europe], there is still a big opportunity to get in touch with the fan. Like with mass participation events, such as Colour Run and marathons, which are growing in popularity, it’s a great platform upon which sponsors can activate.”
On cycling, Nazzari is equally positive. “I am interested to see what happens with the Velon teams [a group of professional road cycling teams who are working collectively to develop the profile and broadcast coverage of the sport]. As a sport it’s still under scrutiny but with the three big tours [the Tour de France, Giro d’Italia and Vuelta a España] all in Europe, plus the historical one-day classics, it’s a sport with tremendous opportunity for sponsors.”