Sport sponsorship now operates as a global marketplace, with brands around the world regularly aligning themselves with sports properties in foreign markets.
The United States is the biggest sponsorship market in the world, SportBusiness Consulting estimates that just under one third of total global sports sponsorship spend is on US-based properties. Four of sport’s ten most valuable sponsorship agreements are currently with US-based sports properties, including three deals with the NFL.
The US does not totally dominate the global sponsorship market however, as only 25 per cent of sport’s 100 most valuable deals are with properties in the United States.
Looking closer at Asia-based brands, of the 100 most valuable sponsorship agreements coming out of Asian companies, just 17 are with a US-based sports property, while almost twice as many are with a European-based properties, and the same number again are with global sports properties, such as the Olympic Games or Fifa.
Of the ten most-valuable sponsorship agreements with an Asian brand, only one – Hyundai’s sponsorship of the NFL – is with a US-based sports property. Global properties (Olympics and FIFA) have four of the top ten deals, the Indian Premier League one and the remaining four are with European football.
The lack of foreign brand investment in American sport can be attributed to two key factors. Firstly, the sponsorship model of the four main US major leagues has been to have a relatively small number of high-value, centrally-controlled deals. With the overwhelming majority of the major leagues’ audience being domestic, these deals have naturally tended to go to domestically-focused brands. The centralised sponsorship structure has also meant that clubs and teams have had little sponsorship inventory to offer international brands.
Secondly, the sheer size of the US market meant that until recently, US major league sport has thrived within its own relatively self-contained eco-system. There was limited motivation to build an international fanbase and where attempts were made, they often failed (e.g. NFL Europe).
In the meantime, many non-US sports have long been actively developing their international footprint, most notably European football, which has been developing international markets for several decades, particularly in Asia, but also in the Middle East and elsewhere.
The following diagram illustrates the results. European football’s expansion efforts mean that international brands are carried on more than half of top-tier European club shirts – 90 per cent in the case of the Premier League. By comparison, only a third of MLS teams have an international shirt sponsor. The NBA, long the most active of the big-four American leagues in terms of international expansion and the first to finally introduce jersey sponsorship only last year, already has foreign-based brands on half of its newly-branded team jerseys.
So why does it matter? Do the US major leagues really need international expansion and international brand sponsorship? A comparison of jersey sponsorship values would suggest so.
As the table illustrates, European football shirts command a sponsorship value roughly four times that of NBA franchises. Part of this differential will be down the smaller sized logo but a significant portion will be down to the greater global reach of European football teams and the fast-growing value of these international markets.
The US major leagues are now mobilising their international expansion efforts with greater purpose. The NFL is focusing growth in Europe, and the NBA both in Europe and in Asia. Greater sponsorship from international brands is just one of the potential payoffs, as European football has already shown. But as our data demonstrates, US sport has a lot of ground to catch up.