Russia 2018 Part One – Will FIFA’s friends show up to the party?

Russia 2018 Part One – The Breakdown

Welcome to our three-part series on the 2018 FIFA World Cup in Russia. We’re going to give you a brief rundown of everything to do with sponsorship at this year’s World Cup. From the financials and the controversies, to the creative work being produced by agencies around the world.

In this opening article we’ll be giving you a breakdown of the sponsorship situation at FIFA.

For those of you who don’t live and breathe sponsorship, here’s a quick refresher of how FIFA currently compartmentalise their sponsor strategy:

FIFA Partners – This is the top tier of sponsorship. Brands on this level get access to all FIFA events, and association to everything FIFA. These sponsors also play a role in the development of football around the globe.

World Cup Sponsors – The second tier of sponsorship gets the brand rights to the FIFA Confederations Cup, and the FIFA World Cup. This tier gets association rights, marketing packages, as well as ticketing and hospitality.

Regional Supporter – The last tier is a localised sponsorship role with fewer rights to association rights, and some LED board exposure.

With only 43 days left to the World Cup, FIFA have yet to secure 15 of 34 sponsorship roles. Three roles at Either FIFA Partnership or World Cup Sponsor level are yet to be filled. But the main concern for FIFA is the Regional Supporters, of which five roles out of 18 are filled.

In monetary terms, this equates to an estimated US$130m of missed value.

The high asking price for Regional Supporters is an issue. The asking price for media space at the 2018 Super Bowl was US$5 million, FIFA’s asking price is US$10 million.

It is debatable on how much returning value each investment returns.

From the western brands, long term partners Coca-Cola, Visa, and Adidas are still involved at top tier level. However, brands such as Castrol, Continental Tyres, Johnson & Johnson, Sony, and Emirates have all chosen not to renew for the Russia World Cup.

Interestingly the only sponsorship partners at tier three regional level are Russian owned, Alpha Bank, Rostelecom, Russian Railways, and Alrosa. One Asian Regional Supporter – Yadea. However, FIFA have refused to comment on the status of Regional Supporters.

FIFA have been struggling recently with their revenue stream, in a recent report they revealed a loss of US$191.5 million in 2017. This was partly due to allegations of corruption and rising legal fees for the organisation.

However FIFA expect to hit their revenue target of US$5.6 billion over the 2015-18 cycle, largely leaning on World Cup broadcasting and sponsorships. 95% of that will be based on World Cup broadcasting and sponsorship revenue.

We’ll just have to wait and see if FIFA pick up more regional sponsors, even if it is extremely unlikely considering how close it is to kick-off – sponsorship strategists just won’t be able to justify the large investment.

Stay tuned till next time when we dive into the potential reasons why sponsors are reluctant to engage with the 2018 World Cup.

 

May 2, 2018