Who Sponsors The FIFA World Cup & How Much Do They Pay?

With a global audience of 3.572 billion people during the 2018 FIFA World Cup Russia and a projection of 5 billion viewers for the 2022 edition in Qatar, association with the World Cup is extremely interesting for brands. According to FIFA, the World Cup ‘is the most effective international marketing platform’ and reaches people in over 200 countries.

In order to stage such an event, the support of sponsors is crucial for FIFA. Commercial affiliates as the governing body also calls them, ‘provide vital services and product support for the entire event’s operations.’ More importantly for FIFA is that these affiliates are willing to pay big money to exploit the World Cup platform.

World Cup Main Driver Behind FIFA’s Income

The World Cup, as flagship tournament, is the main driver behind FIFA’s income. At the same time, it is also a major cost for the governing body. FIFA’s 2020 Financial Report shows an investment of $1.696 billion for the 2022 World Cup in Qatar.

The same report also projects that the total revenue budget for 2022 amounts to $4.666 billion. 56 percent of this comes from broadcasting rights, while 29 percent is contributed by the sale of marketing rights. In other words, sponsorship income amounts to $1.353 billion. A stark contrast with the $131 million in marketing rights revenue in 2021. Showing how important the World Cup is for FIFA’s financials.

During the last World Cup cycle (2015-2018) FIFA generated $1.66 billion in marketing revenue. Just a slight increase compared to the $1.629 billion from the 2011-2014 period. Projections for the 2019-2022 cycle are set at $1.766 billion.

FIFA Implementing Changes To Increase Revenue

Although income from marketing rights is projected to grow further, it falls short of what FIFA wants. Therefore, they are making changes and implementing new products to increase their marketing income.

The governing body wants to increase the value of their current sponsorship deals by 100 to 150 percent. A major reason why partners should be willing to pay more is the launch of digital platform FIFA+ in 2022. The free streaming and content application will give partners even more exposure worldwide, especially between major tournaments.

Changes in tournament structure could also increase sponsorship revenue. From the 2026 World Cup onwards, 48 teams will participate and the expanded structure would generate $2.38 billion in sponsorship revenue according to estimates. Would the World Cup take place every two years, as the FIFA has proposed, the theoretical sponsorship revenue for the same time period is approximately $4.54 billion.

Another way FIFA hopes to increase marketing revenue is through a restructuring of their commercial partnership programme. Announced at the end of 2021, the main change is the unbundling of the women and esports branches from the men’s game.

FIFA’s New Commercial Partnership Structure

In the new set-up, FIFA has four levels of partnerships. FIFA Partners are at the top of the hierarchy with a global status and access to all competitions. The three branches – men’s football, women’s football and esports – each have three levels.

First, there are World Cup Partners. They have the global rights to all national team tournaments and development initiatives in a certain branch.

The second level consists of World Cup Sponsors. These partners have global rights, but just for the World Cup tournament.

Finally, there are Tournament (Regional) Supporters, who have territorial rights for the World Cup or another tournament.

Rights To Branding, Exposure And Privileges

Apart from the use of the official marks, included in the rights packages is exposure in and around the stadium and in FIFA’s (digital) media. This will now also include exposure on FIFA’s new streaming service FIFA+.

Furthermore, brands become part of an extensive sponsor recognition programme and get hospitality opportunities. They also get favourable conditions for broadcast advertising and protection from ambush marketing.

The chance of ambush marketing taking place is high, because it is a relatively low-cost strategy for non-partners to profit from the World Cup’s reach. A well-known example is beer brand Bavaria’s dress stunt during the 2010 World Cup.

FIFA tries hard to prevent ambush marketing, filing criminal charges against entities violating the strict regulations and by requiring participating associations to be on the alert and notify them when ambush marketing takes place by one of its delegates or in their home country.

What Do Partners Pay?

The strictness to protect sponsors’ exclusivity and interests is completely logical when looking at the amount of money involved in these deals.

The exact fees partners pay for the rights is not made public. However, in 2010, IEG listed annual fees for the three (at that time) sponsorship tiers: Partners, World Cup Sponsors and National Supporters.

Partners paid an annual fee between $24 and $44 million. World Cup Sponsors’ annual fee was estimated to be between $10 and $25 million, while National Supporters paid anywhere between $4.5 and $7.5 million.

FIFA’s 2018 annual report shows where the $1.143 billion in marketing revenue came from during the 2018 World Cup year. $695 million came from FIFA Partners, $302 million came from World Cup Sponsors, $143 million from Regional Supporters and $3 million from National Supporters.

For the World Cup Qatar, FIFA has three different sponsorship tiers, which are comparable to the new structure introduced at the end of last year. The governing body has six to eight slots for both FIFA Partners and FIFA World Cup Sponsors (rights to the tournament) and up to 20 Regional Supporters (max. four per region).

Long Term Partners And Controversy

Currently, FIFA lists seven FIFA Partners. Some, like Adidas and Coca-Cola, have been involved with FIFA for decades. The German sportswear manufacturer has been associated with FIFA since 1970. In 2013, the two extended their deal until at least 2030.

Although the financial details were not disclosed, a previous extension in 2005 covering the 2010 and 2014 World Cup editions, was estimated to be worth $350 million.

Coca-Cola began their formal partnership with FIFA in 1974 but has had stadium advertising at every World Cup since 1950.

FIFA Partners

In 2007, Visa replaced rival Mastercard after the latter reached a $90 million legal settlement with FIFA. Visa made a big investment that got tested in the years to follow, due to the bribery scandal that hit the world football organisation. The financial services company threatened to pull out of the deal, but with a deal believed to be worth between $150 and $200 million, in place they eventually continued.

Many other brands, such as Sony, Emirates, Johnson & Johnson, Castrol and Continental Tyres, decided against renewing their, in 2014 expiring, deals. It forced FIFA to look for new partners and several Asian companies took advantage. In 2016, Wanda Group became the first Chinese company to sign up as FIFA Partner.

In February 2022, it was FIFA who severed ties with Russian oil and gas company Gazprom as a result of the ongoing war. Gazprom joined FIFA as partner in 2013, benefiting from the 2018 World Cup taking place in Russia. With what global partners reportedly pay, the deal termination has meant a substantial revenue loss for FIFA.

To replace Gazprom, FIFA announced a second Qatar based company, QatarEnergy, as global partner in March 2022. At the time the governing body noted that all global partnership positions had been allocated for the 2022 World Cup.

FIFA World Cup Sponsors

After FIFA Partners, the World Cup Sponsors have the second-most extensive global rights package, but it is restricted to the tournament. Currently, there are five Asian companies, including three from China, and two American brands.

2022 FIFA World Cup Qatar Sponsors

Although watchmaking company Hublot is not listed as an official FIFA World Cup Sponsor, the Swiss company has been involved as official timekeeper of the World Cup since 2010. For the current edition, the company has also provided the countdown clock. So, some sort of sponsorship agreement is in place.

Regional Rights Exploitation

In addition to general and World Cup partners, FIFA has struck Regional Supporters deals. These companies have the same rights but are geographically limited to where they can exploit these rights.

There are five pre-defined regions: Europe, North & Central America, South America, Africa & Middle East and Asia. So far, FIFA has announced three regional supporters for the Africa & Middle East market and the South American market.

Two companies attained the rights to the North & Central America market, while blockchain company Algorand can activate their sponsorship in the North American and European market.

Regional Supporters 2022 FIFA World Cup Qatar

Geographical Shift In Sponsors

According to experts, the controversy surrounding the bribery scandal and the World Cup taking place in Qatar might have influenced the ease with which FIFA has been able to strike (regional) deals in recent years.

Many western companies decided against agreeing or renewing a sponsorship agreement. Hence, the influx of new, and often Asian companies. However, interestingly, FIFA is yet to announce a World Cup 2022 Regional Supporter for the Asian market.

In absolute terms the reach in Asia is the broadest. During the last World Cup edition, Asia contributed the most viewers to the total reach of the tournament. Especially China, Indonesia and India had many viewers.

But although Asia led in absolute numbers, only 38.4 percent of the Asian population was reached. Far less than that of traditional football continents Europe (86.1%) and South America (96.6%).

Shift Towards Different, More Modern Companies

There is not only a shift to more Asian companies over the last decade. For years FIFA had deals with major Western companies from the classic sponsorship industries as automotive, airline and sportswear. However, like in European football leagues, new kind of companies now want and have the resources to be associated with FIFA.

Reflecting societal changes and developments, partners change as well. An example is Alibaba first promoting their E-Auto and later realigning their sponsorship deal to promote Alibaba Cloud through FIFA.

For the 2022 World Cup modern companies offering cryptocurrency (Crypto.com) and blockchain (Algorand) services have secured deals.

Controversial Partnerships

These new partnerships are not without controversy, just like some of the ‘old’ ones. Cryptocurrency is a risky market, and the question is whether a global organisation like FIFA with such a broad reach should promote these kinds of companies.

Advertising entices people to use their products and participate, even though many people do not have the financial literacy in cryptocurrency or blockchain to do this, which could lead to problems. Like the rise in gambling (addiction) problems matching up with the rise in gambling sponsorships in football.

FIFA currently has no official bookmaker, where some professional football leagues do. However, the governing body does have an agreement with beer brand Budweiser. Whether alcohol should be promoted in sports is subject to much debate. Alcoholic sponsorship is prohibited in many countries and with Islam being the state religion in Qatar, it does not seem an ideal match.

In recent years, many alcohol brands have opted to promote their 0,0% alcohol beverages in sports. However, it requires smart planning from brands. During the UEFA EURO 2020, Paul Pogba removed a 0,0% Heineken beer bottle from the press conference table. It led Heineken to change their policy and ask players if they permit such product placements.

The incident followed Cristiano Ronaldo removing two Coca-Cola bottles in his press conference, with him being in favour of people drinking water. The gesture resulted in a $4 billion drop in market value for Coca-Cola, showing that sponsorship from brands that are controversial for some people can sometimes backfire.

Apart from alcohol, there are thus also questions surrounding brands like Coca-Cola (soda) and McDonalds (fast food). FIFA has longstanding relationships with these brands, so is unlikely to end these deals any time soon. However, the question remains whether they should? Does aligning with such brands, send the right message to all those people watching?

For now, the income received probably outweighs the moral counterarguments that could be made. After all, the sale of marketing rights around the World Cup is a major driver of FIFA’s income. Only coming second to income from broadcasting rights.