The global value of world sports is estimated at US$40 billion. Around half it it may be sponsorship. But no one currently knows 

Top 20 sponsoring brands revealed

Estimates of the global value of annual sports sponsoring have up to now been guesses. But this most important statistic is now being calculated in a major project by researchers of this magazine. In fact SportsPro researchers and writers are currently on a mission to find the true figures, ready for a major report in April this year. Here is a taste of what is to come. 

It is estimated that last year the top 20 sponsors spent US$6.525 billion sponsoring sport. Currently this magazine is a third of the way through a research project that will lead to a major article in April, detailing the sports sponsorship activities of the world’s top 1,000 sponsors. Until that is completed, a total accurate global figure for sports sponsorship is difficult to calculate.

The project currently being researched is a ground-up estimate. It starts at the beginning, at the bottom, by working out each of the 1,000 sponsors’ spending and then adds it up to get a global spend. It is the only serious way of ending up with an accurate figure. Anything else is just guesswork – which up to now is what has been available.

However, it was recently estimated that the whole global sports business had a turnover of US$40 billion. That may or may not be an accurate figure. But it is a good estimate, as once again it was made by this magazine. With the clear caveat that it was only an estimate and not a calculation.

It is fair to say that of this US$40 billion, sponsorship is half of it, which strongly indicates that global sponsorship of sport is worth US$20 billion in broad ballpark terms.

With that in mind, and with the reasonably sure knowledge that the top 20 spent US$6.525 billion – just under a third of the sponsorship total – that figure looks less credible. In fact the top 20 are likely to have spent around 25 per cent of the whole which indicates that the whole sports sponsorship cake could be higher than anyone realises, at nearer US$25 billion. Or it indicates that the global sports business, as a whole, is smaller than most estimates.

Another factor to consider is that activation is generally thought to take another 50 per cent of the spending, effectively doubling the US$25 billion figure to US$50 billion.

It is those figures that have to be investigated and proved. Of course, activation is a far more intangible figure and must wait for a lot more research effort. For now, it is just a guestimate. But sooner or later, for the sports business to really know about itself, that activation number must also be properly quantified. We promise to get round to it sooner rather than later.

For now, here is a synopsis of how much the top 20 spend and what they spend it on.

Nike – Annual spend: US$800 million

As the world’s biggest spender on sports sponsorship, Nike has become the world’s most recognisable and visible brand. It has an emphasis on personal sponsorship. The sportswear manufacturer is active in at least 13 different sports, sponsoring a variety of teams and personalities. Its most prominent activities are in soccer, tennis, golf, basketball, baseball and football. Nike has a reported advertising budget of US$1.7 billion annually, of which it spends around half on sponsorship and endorsement deals. But in reality its advertising and sponsorship are inextricably linked. Tiger Woods earns US$20 million to promote the company’s range of golf wear and equipment while NBA star LeBron James is paid US$13 million a year in a similar ambassadorial role. In total, Nike spends around US$500 million per year in personal endorsement deals, part of an overall sponsorship spend of at least US$800 million.

Adidas – Annual spend: US$700 million

In soccer, Adidas has deals with a host of top European clubs and players, and it is seeking the same soccer dominance in America with deals with every Major League Soccer team. The MLS deal, signed in 2004, was a 10-year deal worth some US$150 million, or US$15 million per year. In addition to the sponsorship of events, leagues and teams, the company has a number of highly lucrative deals with professional sports people including David Beckham.

The company has a large number of similar partnerships in tennis, rugby union – including the sport’s two most prized assets, Jonny Wilkinson and Dan Carter – and a large presence in the NBA and golf. Adidas sponsors the Australian cricket team, the New Zealand rugby union team and the New York Yankees. In September last year it confirmed it would be one of the tier one category sponsors of the London 2012 Olympic Games, a four-year partnership worth some US$50 million per year. It is the largest single sponsorship investment by the company in the United Kingdom.

Coca-Cola – Annual spend: US$550 million

Coca-Cola has an advertising budget of some US$1.6 billion. It doesn’t break out the figures but from close examination of its long-term financial commitments, its annual sponsorship spend is thought to be around US$550 million. It is involved across the board with particular emphasis on its home market and its sponsorship activities are not nearly as developed outside North America. The NFL sponsorship is some US$62.5 million annually. The company has been a major marketing partner of the NBA since 1986, recently renewing its deal for an unspecified period. It has a similar deal with Nascar, which has just been renewed until 2017. Both deals are believed to have an annual value of around US$50 million. It also sponsors a host of individual teams within the NFL, MLB and NBA, as well as several golf events. There is a further US$17.5 million annual outlay for Olympic Games sponsorship until 2020 and a deal with Fifa for the soccer World Cup, worth around US$60 million.

Red Bull – Annual spend: US$500 million

The beverage company founded by Dietrich Mateschitz has made its name on the back of a major marketing campaign centred on sport, mainly motor racing. Sport was and remains an obvious fit for a company seeking to corner the youth market. In Mateschitz, the company has one of the most forward thinking marketing experts on the planet. After initially focusing on extreme sports and extreme sportsmen and women, the past few years has seen the company expand its investment into more mainstream sports. In Formula One it bought the Jaguar team and then added a second team when it bought Minardi. In 2007 it spent some US$243 million on Formula One. It also bought an Austrian soccer team. In the same year it bought the Major League Soccer’s New York franchise, the MetroStars, for around US$50 million from Anschutz Entertainment Group. The team has since been renamed New York Red Bulls. Reportedly there was a further US$50 million investment in stadium naming rights.

The company entered Nascar in 2006, again as a sponsor rather than an owner, and is likely to have spent some US$50 million on its first-year Nextel Cup campaign in 2007. Red Bull logos were also seen in the America’s Cup last year, as part of a swap deal with the Metro newspaper group for Formula One sponsorship.

Pepsi – Annual spend: US$385 million

The Pepsi brand has non-cancellable marketing commitments of some US$453 million for 2008/09, according to its 2006 annual report. Its annual sports sponsorship spend is thought to be around US$385 million of that.

It has individual deals with a huge range of NBA, NFL and MLB teams as well as personal endorsement agreements with baseball’s top star Alex Rodriguez and four-time Nascar champion Jeff Gordon amongst others. Pepsi also has a deal with the Major League Baseball itself, signed in 1997 at a value of US$50 million.

Honda – US$370 million

The Japanese motor manufacturer, much like its bitter rival Toyota, uses Formula One as a vehicle to sell more cars. The company spent some US$270 million on the sport in 2007, mainly through its works team but also in its support for Super Aguri, effectively the Honda B team. It is a major investment that, one lucky win apart, has failed to produce the goods since the company bought out the BAR team at the end of 2004. Taking into account Honda’s other motorsport activities, notably the Indy Racing League and particularly MotoGP, where it operates a works team and several satellite operations, its overall sponsorship spend is some US$370 million per annum.

Midway through 2007, Honda announced it was ending its other major sponsorship, with Major League Soccer, which was reputedly worth some US$7.5 million per year after 12 years.

General Motors – US$350 million

In 1997 General Motors signed a 10-year deal worth an estimated US$900 million with the US national Olympic team, one of the largest deals of its kind. The partnership will end in 2008 after six summer and winter Olympics. GM also has a significant presence in Major League Baseball, with major sponsorship agreements in place with 11 teams as well as the league itself. There is also a multimillion dollar investment in Nascar through car supply and team sponsorship. It is so important that it retains Chris Lencheski’s Ski & Co agency simply to maintain that involvement in motorsport.

Anheuser-Busch – Annual spend: US$310 million

The Budweiser brand has always been one of the most proactive global sports sponsors, in recent years due to the work of its long-time global sponsorship supremo Tony Ponturo. In 2007 it was active in at least 22 different sports, including activities as diverse as cycling, lacrosse, boat racing, hockey and even rodeo. Of more importance, and greater value to the brand, are deals with some 26 Major League Baseball teams, as well as a partnership with the league itself; 25 deals with NBA franchises and the NBA itself; 28 NFL teams and the league. Significantly it is the “exclusive alcohol beverage and non-alcohol, malt-based beverage sponsor” of the Superbowl in a deal that runs until 2012. Budweiser is the official beer of Nascar and switched its primary car sponsorship from Dale Earnhardt’s team to the new Gillett Evernham Motorsports operation for an estimated US$20 million for 2008. Budweiser is active in soccer, including deals with the English Premier League and Manchester United, as well as Major League Soccer and 12 of its franchises. The brand is also well represented through the Olympic Games. It is official international beer sponsor of the 2008 Beijing Games and, as Anheuser-Busch, the company is the US Olympic Team’s official malt beverage sponsor. Anheuser-Busch is also well represented in golf, through its Michelob Ultra beer brand.

Toyota – Annual spend: US$300 million

Toyota spends around US$230 million per annum on its Formula One team, which has been in operation since 2002 albeit with little success. Like Honda and Red Bull, it views direct ownership as a more effective marketing technique than a simple sponsorship or engine supply deal. The company widened its motorsport activities in 2007 by entering Nascar. It is believed to be spending at least US$40 million on the project. Through its various US divisions and subsidiaries, the Toyota brand supports an array of MLB, NBA and NFL franchises. Such local deals are reflected across the world, for example in New Zealand where the local Toyota group sponsors the nation’s America’s Cup team.

Mercedes-Benz – Annual spend: US$290 million

Mercedes-Benz has had a long and illustrious motorsport history. It re-entered Grand Prix racing in 1997 with McLaren and its financial contribution to the team ensures its place on the list. It spends some US$240 million on the Formula One programme. In addition the company spent some US$40 million a year on its sponsorship of the ATP Tour in tennis, although it recently announced it would end its support at the end of 2008. A further US$20 million a year is spent on the company’s other sponsorship properties in the NBA, NFL and at several PGA golf tournaments.

Bank of America – Annual spend: US$280 million

Predictably Bank of America is a major player in the US sponsorship market and the biggest financial services sports sponsor in the world, although it is almost entirely North America-centric. The bank spent US$600 million on media in 2006 according to Nielson Monitor-Plus. Direct sponsorship accounted for roughly half. It is the official bank of Nascar as well as title sponsorship of the race in Charlotte and deals, through International Speedway Corporation, with several Nascar tracks. It is the official bank of baseball, a position it has held with MLB since 2004. The company is also official sponsor of the 2008 US Olympic team and has a significant presence in golf, as title sponsor of the Champions Tour event in Massachusetts each June and four other PGA Tour events. On a regional level, Bank of America sponsors four individual NFL teams and 10 MLB teams. The company is also active in stadium naming rights. In 2004 it signed a US$140 million deal to name the Carolina Panthers NFL team’s stadium, the Bank of America stadium for 20 years.

Marlboro – Annual spend: US$240 million

The Marlboro brand is amongst the most controversial sponsors currently active in sport. Despite increasingly tight tobacco restrictions it continues to provide huge monetary support to the Ferrari Formula One team and Ducati MotoGP team. This despite the fact that the world’s major tobacco companies, including Marlboro’s parent company Philip Morris, signed an edict to end tobacco sponsorship in sport in December 2006. But in 2007 Marlboro logos appeared on the Ferrari Formula One cars and Ducati MotoGP bikes at several races. It was a clever, some might argue cynical, circumnavigation of the rules. When the ‘Marlboro’ name could not be used, it was replaced by the company’s non-tobacco derivative. The so-called ‘barcode’ design is now so synonymous with the brand that Philip Morris decided to press ahead with its US$200 million a year five-year title sponsorship of Ferrari and a similar deal, reportedly worth US$40 million, with the Ducati MotoGP team. The Ferrari deal was made possible by Marlboro chairman Lou Camilleri’s close relationship with team principal, Jean Todt. Both teams delivered for the brands in 2007, taking both world championships, with Kimi Räikkönen and Casey Stoner. In a world where it effectively can’t advertise, Lou Camilleri has been exceptionally astute in keeping the brand in the sports sponsorship game.

Sprint-Nextel – Annual spend: US$220 million

The company has major sponsorship deals with two of America’s biggest television draws, the NFL and Nascar. It is the title sponsor of Nascar’s top-flight series after taking over from long-time title sponsor Winston in 2004. In 2008 the Nextel Cup will be renamed the Sprint Cup Series, reflecting the company’s corporate changes. The deal is worth some US$70 million a year over 10 years.

But Sprint’s largest overall sponsorship deal is with the NFL. It has a five-year contract, signed in 2005, to provide NFL wireless content to mobile phones. The deal is worth US$200 million over five years, equating to some US$40 million per year, but is being supplemented by an additional US$100 million in advertising on the NFL website and television network. It is also reportedly spending some US$300 in advertising during NFL programming on the networks.

Sprint is the naming rights partner of a sports arena in Kansas City, Missouri, close to its headquarters. It is paying US$2.5 million per year over 25 years for the rights. The arena, known as Sprint Center, is thought likely to attract a franchise from one of the major sports to the city. When a host of smaller deals with a variety of professional sports teams are added, the company has an estimated annual spend of US$210 million.

Vodafone – Annual spend: US$210 million

Having removed itself, or been removed, from a US$15.5 million-a-year shirt sponsorship deal with Manchester United in late 2005, the same happened in Formula One when Vodafone was removed from its US$40 million a year sponsorship of the Ferrari team by Marlboro’s need for more exclusivity.

But despite losing two relationships with arguably sport’s top two global iconic brands, it was far from out. In soccer Vodafone focused its efforts in soccer on the Uefa Champions League, signing a deal with Uefa to sponsor the tournament between 2006 and 2009. It had previously been the mobile phone partner of the Champions League since 2003 before signing up as one of the tournament’s official partners. Last year it announced a further three-year agreement with Uefa covering the Uefa Cup and Super Cup. Overall the deals are thought to be worth as much as US$60 million a season.

In Formula One to replace Ferrari, at the start of 2006 it announced that it had signed a 10-year title sponsorship deal with McLaren Mercedes, for a fee of around US$75.5 million a year. Vodafone now has access to Lewis Hamilton, one of world sport’s brightest new stars.

In racing, Vodafone has sponsored the Derby in England since 1995. But after an internal review it was decided that the 2007 Derby would be the final race to be sponsored by the brand. Since 1995 Vodafone has been the main sponsor of the English cricket team, reputedly to the tune of some US$15 million a year.

Aside from its four international sports sponsorships, in soccer, Formula One, cricket and racing, Vodafone also has a variety of localised deals in other sports including Australian Rules football and the Romanian national soccer team.

AT&T – Annual spend: US$190 million

In 2007 AT&T made a surprise move into Formula One, signing a deal to be the title sponsor of the Williams F1 team. The deal was unusual in Formula One as it offered little in the way of on-car branding and simply naming rights for a cut-price annual fee of around US$25 million.

The naming rights philosophy is tried and tested. But it is within the United States that AT&T is most active. It spends an estimated US$20 million a year on naming rights to PGA Tour golf events. AT&T gives its name to the AT&T Center in Texas, home to the San Antonio Spurs NBA team, in a US$41 million deal. In a similar deal, AT&T has given its name to the home of the San Francisco Giants baseball franchise, AT&T Park. That is a US$50 million deal.

It is also active in Nascar. The company became embroiled in a legal dispute with Nascar over its right to use the AT&T brand instead of the Cingular brand on a Richard Childress Racing car. The deal was worth US$15-US$20 million a year and will continue until the end of 2008 following an agreement between the two.

AT&T spends a further US$10 to US$15 million per year sponsoring the United States Olympics team – a deal that began in time for the 2006 winter games in Turin and will cover the Beijing Games in 2008.

Visa – Annual spend: US$185 million

Visa effectively replaced its rival Mastercard as an official sponsor of the soccer World Cup, from 2010 in June 2007. It was controversial and led to a lengthy legal action involving Mastercard and Fifa, now settled. Visa meanwhile signed an eight-year deal worth US$170 million, equating to just over US$21 million per year. The deal covers the 2010 World Cup in South Africa and the 2014 competition in Brazil. The brand is also an official worldwide partner of the Olympic Games and is currently in the middle of an eight-year deal that runs until the London 2012 Games. It is paying the standard US$17 million per year. It is also contributing at least US$40 million of “financial support to National Olympic Committees” for the duration of the deal. The company’s other international sponsorship is as a global sponsor of the Rugby World Cup, a partnership now in its 11th year.

Visa’s US division sponsors the NFL, as well as the sport’s flagship event the Superbowl. It also has deals with the Atlanta Falcons, Carolina Panthers, Cleveland Browns, Denver Broncos, New England Patriots, New Orleans Saints and San Francisco 49ers. It is also active as an official sponsor of Nascar.

Emirates – Annual spend: US$180 million

Tim Clark, president of Emirates, is on record as saying the company aims to spend around two per cent of income on sponsorship and corporate communications. That equates to just under US$200 million a year, a large proportion of which is spent on team and event sponsorships in key markets such as Australia. Internationally, however, the company has around 30 major sponsorships.

The airline has naming rights to Arsenal’s stadium in North London and is the club’s shirt sponsor, paying around US$10 million a year. Arsenal are receiving around US$19 million a year until 2012 for naming rights and then some US$5 million between 2012 and 2020.

Emirates also had a multimillion dollar shirt sponsorship deal with French side Paris St. Germain and German club Hamburg.

Its other main activity is in horse racing where it is title sponsor of the Dubai World Cup, the world’s richest race. It is also title sponsor of the Melbourne Cup and two races at America’s top meeting, the Breeder’s Cup. It sponsors nine golf tournaments around the world and spends heavily on international rugby. It was one of six official partners for last year’s Rugby World Cup in France, spending around US$25 million. It has also recently been title sponsor of the New Zealand challenge for the America’s Cup, at a cost of US$35 million.

Mastercard – Annual spend: US$175 million

Mastercard has major sponsorship deals in soccer, baseball and golf. In soccer it is a partner of Uefa, European soccer’s governing body. It has deals in place to sponsor the Champions League annually as well as Euro 2008. Overall it is thought to have a value of some US$50 million annually. However the company was recently involved in a major legal action with Fifa. Mastercard objected to the way Fifa had replaced it with Visa as a major sponsor for the next two World Cups when it believed it had the first refusal on any such deal. Fifa eventually paid the company US$90 million to settle the case. Mastercard is also a sponsor of the Copa America.

In golf, Mastercard sponsors a series of events as well as the PGA Tour itself. Some estimates have put the amount the company spends on golf sponsorship internationally at as much as US$30 million annually. The company has been a sponsor of Major League Baseball for 11 years. In September 2006 it announced an extension to the deal until 2010. Elsewhere the company has individual deals with 17 MLB teams, including the New York Yankees, and 25 NFL teams.

ING – Annual spend: US$150 million

The financial services group took its first major step into sports sponsorship in 2007, having previously dipped its toe in the water with a series of sponsorships completed and activated individually by its various offices around the world. The global impact came courtesy of a US$75 million deal with the then world champion Renault Formula One team and a major trackside advertising package at 14 Formula One races around the world throughout the year. It was and remains the biggest non-tobacco sponsorship deal in Formula One history. ING underlined its commitment to Formula One by becoming title sponsor of the Australian and Belgian Grands Prix in 2007. It is believed to be spending as much again on activation in every key market.

ING’s other sponsorship deals are agreed individually between its various offices worldwide and local events. It has been involved in sailing in the past but, Formula One apart, its main sponsorship property is the New York Marathon, for which it has naming rights. It also sponsors a host of other marathons in the USA. It is also active in hockey and soccer in Europe.

Canon – Annual spend: US$140 million

Canon’s sponsorship portfolio includes major deals in soccer, golf and tennis. It has a deal with Uefa for the Euro 2008 tournament later this year, a continuation of the brand’s 30-year association with soccer. It is also a major sponsor of US golf’s PGA Tour, a contract renewed in November last year for a further three years.

In tennis Canon is a partner of the US Open Grand Slam in New York. That is another long-term deal. The company bolstered its tennis interests in 2004 by signing a three-year personal sponsorship deal with Maria Sharapova, one of the game’s most marketable personalities. That deal is said to be worth at least US$6 million a year to the Russian. In the USA Canon has a deal with the NFL until 2010, thought to be worth at least US$30 million annually. When all its deals are taken into account the company is thought to spend around US$140 million annually.