Sports Sponsorship Market

Market Overview

The global sports sponsorship market size was valued at USD 55.1 billion in 2023 and is projected to reach a value of USD 121.7 billion by 2032, registering a CAGR of 9.2% during the forecast period (2024-2032). The large number of sporting events organized worldwide majorly drives the growth of the global sports sponsorship market. 

A sponsorship is a commercial agreement between a company and a sport in which the company provides financial or other types of support to an event, sports team, or athlete in exchange for exposure to the audience of the team or athlete. Sponsorship can take various forms, such as providing financial support for an athlete's training and competitions or sponsoring a team's jerseys or equipment.

Sponsorship indicates that both parties benefit from the agreement. In exchange for a financial contribution, a sports organization will allow commercial use of its name. These activities can be as diverse as the participants' imaginations. Most sponsorships are paid for with cash, but in-kind sponsorships can be beneficial and effective. The sponsor provides equipment, services, or management expertise as part of its sponsorship fee.

Key Highlights

• Signage generates the highest revenue share of the market by type.
• Competition Sponsorship dominates the market by applications.

Market Dynamics

Global Sports Sponsorship Market Drivers

Large Number of Sporting Events

The sports sponsorship business drives the rising global popularity of sports and the expanding number of viewers for various sporting events. A wide variety of sports are played around the world. These sports' many associations and regulating bodies conduct large-scale events worldwide where athletes and teams compete. Some sporting events are held annually or at regular periods. Annual contests include the UEFA Champions League, Super Bowl, tennis Grand Slam events, Formula One racing, and the NBA.

The FIFA World Cup draws an enormous global audience. The FIFA Women's World Cup Australia & New Zealand 2023™ has gained popularity among football fans worldwide, not just in the co-host countries. Over 1,715,000 tickets are sold for the FIFA Women's World Cup Australia & New Zealand 2023™. China PR generated the most audience for a single match worldwide. 53.9 million people watched the game against England. In the first 15 days, traffic on FIFA's digital platforms eclipsed that of France 2019. After the Group Stage, records were broken into various categories, including ticket sales, television figures, and digital media data. The event has also set new standards for on-field performance and highs in hospitality, retail sales, and volunteer participation. Major businesses such as Adidas, Coca-Cola, and Visa have long been FIFA World Cup sponsors. These firms invest considerably in sponsorship due to the event's broad reach and interaction potential. According to the governing organization, the American business Visa is now one of two FIFA Women's Football Partners. 

Similarly, the Olympics draw a global audience, with billions of people watching the events. The Summer Olympics typically draw more than 3 billion spectators globally, making it one of the most viewed sporting events on the planet. The 2020 Tokyo Olympics saw an average of 15.6 million viewers in prime time across NBC's different platforms, compared to 19.8 million for the 2018 Pyeongchang Winter Games. The Olympic Partner (TOP) program is the pinnacle of Olympic sponsorship, offering a small group of Worldwide Olympic Partners exclusive global marketing rights to the Olympic and Paralympic Games and Olympic teams worldwide. As a result, the rising popularity and viewership of sporting events drive the worldwide sports sponsorship business. 

Global Sports Sponsorship Market Restraints

Budget Constraints and Increasing Cost of Sponsorship

The escalating expenses of acquiring sponsorship arrangements for significant sporting events have become a serious impediment, particularly for smaller businesses or those with little marketing resources. Prices for high-profile sponsorship opportunities rise in response to increased demand. This makes it difficult for some firms to engage, reducing their ability to reap the marketing benefits of sports sponsorship.

According to media industry insiders, the digital asking rate for the 2023 Cricket World Cup is INR 230-250 per thousand impressions, or cost per mile (CPM). This is 64-67% higher than the digital rate during the 2019 Cricket World Cup, approximately Rs 140-150 per thousand impressions. According to media industry projections, the ODI Men's World Cup would generate about Rs 2,500 crore in advertising revenue this year, doubling the amount invested four years ago. Among the advertisers linked with the Disney Star network for the Cricket World Cup this year are Mahindra & Mahindra, Hindustan Unilever, Coca-Cola, Nerolac Paints, Dream11, Amazon, and United Breweries.

Additionally, in 2023, sports sponsorship spending in India climbed by 24% to INR 7,345 crore from 2022. In 2023, India's sports sponsorship industry was estimated to be worth over INR 157 billion, with media spending being the most valuable category at almost INR 75 billion. The escalating expenses limit the pool of possible marketers to those with large marketing budgets, frequently rejecting smaller businesses that cannot afford such high charges. As a result, well-established firms dominate high-profile sponsorships, leaving fewer opportunities for new or smaller competitors.

Global Sports Sponsorship Market Opportunity

Emerging Market Expansion

Emerging markets, particularly in Asia, Africa, and Latin America, represent significant global sports sponsorship business growth potential. As these economies thrive, disposable incomes rise, and the middle class expands, resulting in more involvement and interest in sports. This growing viewership gives an ideal opportunity for marketers to engage with consumers through sports sponsorship.

Furthermore, the Indian Premier League (IPL) 2024 saw a 38% increase in audience reach on JioCinema, with 620 million viewers vs 449 million the previous season. JioCinema reported a 53% increase in video views, reaching 2,600 crore and exceeding 35,000 crore minutes of watch time. The 2024 IPL's major sponsorship is a five-year partnership with Tata Group at an estimated USD 60.15 million annually. The arrangement is over four times larger than the previous largest deal, and the brand will serve as the IPL's title sponsor. Furthermore, the IPL has a significant economic impact on the Indian economy. Every year, the IPL delivers billions of dollars to our country. In 2020 alone, it injected over USD 6.7 billion into the Indian economy. Most of this comes from selling the rights to broadcast IPL matches. These rights were auctioned for a whopping USD 2.55 billion between 2018 and 2022 alone. This economic contribution demonstrates the league's relevance in promoting sports sponsorship and allied sectors.

Additionally, the Chinese Basketball Association (CBA) has received more sponsorship from both domestic and international firms. For example, Nike formed a long-term agreement with the CBA, offering clothes and equipment while capitalizing on basketball's expanding popularity in China. The Chinese Super League (CSL) has secured sponsorship from prominent corporations such as Wanda Group and Evergrande Group. Foreign brands, including Nike and Adidas, have also invested in the league, leveraging Chinese consumers' interest in football.

Regional Analysis

The global sports sponsorship market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global sports sponsorship market shareholder and is estimated to grow at a CAGR of 9.19% during the forecast period. The North American region is anticipated to continue to lead the market over the forecast period. The growing popularity of numerous games in the area and youth participation have contributed to a prominent global sports sponsorship market share. TEnergy Drinkshe presence of several major market players in the North American region, which holds a considerable share of the market, favors the growth of the sports sponsorships market. In addition, the market players such as Pepsi, Nike, Adidas, and Red Bull have a prominent market share in the USA. For instance, Pepsi has massive sponsorship deals with the top 3 sports tournaments in North America, and the company has a mammoth contract with the NBA and NFL and is also a big sponsor of the NHL. Also, In 2023, Coca-Cola announced a significant sponsorship agreement with US Soccer. The long-term collaboration will help the game expand at all levels across the United States.

Furthermore, Red Bull is a vast sports sponsor that significantly impacts sports sponsorship. Soccer in the U.S. is gaining enormous popularity among the 18 to 29-year-old population, a prominent target audience for Red Bull. Red Bull consumption is 63% higher among soccer viewers than other energy drinks. Further, New York Life has signed two new high-profile national rights partnerships, marking a seismic shift in the scope of its sports sponsorships: MLB's "Official Financial Guidance" and U.S. Soccer's "Official Life Insurance."Thus, such sponsorships are expected to drive the growth of North American regional markets.

Europe is anticipated to exhibit a CAGR of 8.91% over the forecast period. Europe region holds a significant market share because of the well-penetrated sports environment and massive athlete participation rate witnessed in the area. Countries like the United Kingdom are notable for the diversity of their sporting interest. Almost 40.7% of male adults and roughly 31.7% of female adults participate in sports every week. In addition, the initiation of multiple sporting leagues and augmented fan participation have made the sports sector a powerhouse of unmapped avenues and countless opportunities. Football continued to dominate the European market and holds the largest market share. 

Additionally, Europe is contributing to the market revenue value due to factors such as the popularity of university and college-level sports teams and sports leagues, for example, MLB (Major Basketball League), NFL (National Football League), and NBA (National Basketball Association) are likely to boost the sports sponsorships market during the projection period. In 2023, the European Sponsorship Association (ESA), a nonprofit organization, announced the conclusions of a report stating that the value of the European sports sponsorship market has increased to a record 21.98 billion Euros (USD 23.95 billion). This record value undoubtedly increased over the previous highs of 20.69 billion Euros in 2022 and 20.26 billion Euros in 2019.

Asia-Pacific holds a significant market share. The sports sponsorships market is expected to develop fastest in the Asia-Pacific region. Japan, India, and China will likely expedite the region's sports sponsorships market. Factors such as the presence of a well-developed sports industry, the growing participation of people in sports activities, and the increasing demand for sports merchandise from tourists will considerably drive sports sponsorships market growth in this region over the projection period. In the Asia-Pacific region, there is a rise in the number of people participating in sports and exercise activities, particularly among the young population. For example, as stated by the Australian Institute of Health and Welfare, in Australia, every year, millions of people participate in sports and physical recreation activities for numerous reasons, including competition, commuting, and enjoyment. Thus, growing participation in sports events is a crucial factor in the market to grow in the Asia Pacific region.

The RoW comprises the Middle East, Africa, and South America region. South America, Brazil, and Argentina are the frontrunners in the sports sponsorships market. The government initiatives to create awareness regarding sports merchandise also bolstered the demand for sports sponsorships in the South American region. Brazilian Serie A secures 'US$15.9m' Betano championship sponsorship for 2024. The three-year arrangement is much higher than the league's agreement with Assai.

Additionally, the Middle East has more potential for sports merchandise, and players are penetrating the region with various products and distribution channels. Soccer is an integral part of the lives and cultures of Middle Easterners. There has been a steady rise in sports prominence in the Middle East over the past decade, with numerous football leagues gaining traction along with other sports. This has led to increased homegrown talent in the Middle East, with the next generation of young athletes seeking inspiration from the current superstars.

Segmental Analysis

The global sports sponsorship market is segmented based on type and application.

Based on type, the global market is segmented into signage, digital activation, club and venue activation, and others.

The signage segment is the most significant contributor to the market and is projected to exhibit a CAGR of 9.83% throughout the forecast period. Sports signage is crucial for industry-related goals, such as bettering an event's promotion or attempting to better direct spectators during significant matches or events. The importance of high-quality sports signage in ensuring the success of sporting events is underscored by the fast-paced and dynamic nature of such occasions. In addition, sports signage includes indoor signage such as murals, posters, and flooring; outdoor signage such as pitch-side advertising boards, banners, pitch-side A-frames, mounted boards, and others; and digital signage such as portraying sponsor logo or brand image on digital screens or grounds during broadcasting.

Therefore, sports sponsors pay heavily to get their brands' names on signage for maximum exposure during sporting events. Sports signage presents numerous exposure opportunities for the companies sponsoring the events or teams. For instance, it is a significant accomplishment for both the sponsor and the event if the sponsor's signage is seen in a photograph in a newspaper or a news story on television.

Digital activation is starting a digital marketing campaign or giving a final push or go once all the campaign groundwork, such as media strategy, content, and campaign goals, are determined. Digital activation in sports has become critical as the way the sports industry interacts with fans has evolved. Digital activation for sponsors in the sports industry is majorly done on social media platforms, fantasy league platforms, and others. In addition, sports sponsors realize that digital media has a much broader, more effective, and more engaged audience reach than television and thus are aggressively pursuing digital activation. Sponsors can obtain more dynamic brand exposure through digital activation. Therefore, digital activation is what sponsors are looking for first to boost social media engagement and brand value through digital channels. For instance, a player such as Cristiano Ronaldo has 458 million followers on Instagram, and a sports club such as Real Madrid has 120 million followers on Instagram.

Based on application, the global market is bifurcated into competition sponsorship and training sponsorship.

The competition sponsorship treatment segment dominates the global market and is expected to exhibit a CAGR of 9.69% during the forecast period. Competition is a challenge where two or more teams struggle to achieve a common goal that practically cannot be mutual: one wins, and the other loses. Competition Sponsorships support individuals who have achieved State or National selection.

In addition, Sports Competition Sponsorship has become a familiar and efficient marketing tool that promotes brand awareness, spreads a positive brand name, promotes new services and products, and initiates overall momentum. The competition aims to increase its reach to the target consumers more innovative and meaningfully. For example, Hyundai signed an agreement with the NHL to be their official automotive sponsor starting with the 2022-23 season.

The training Sponsorship segment is growing at a moderate rate. Training Sponsorship includes sponsorship provided for the team or an individual sports player for training purposes. It includes the kit, jersey, equipment, or any thigh required for training. With the help of the training sponsorship, the company markets its products and services to extend its reach and sales within the market.

For example, Tezos added a Manchester United training kit sponsorship to its sports portfolio. Manchester United of the Premier League has signed a multi-year training kit sponsorship with the blockchain company Tezos. The deal is believed to be worth 20m Pounds (€23.7m/USD27.3m) per season. As per the Athletic Sports News service, the Tezos logo is featured on the club's range of men's and women's training kits. In June 2022, Lloyd sponsors the 34th Junior Training Programme of the Delhi Golf Club.

Recent Developments

• April 2024 - Adidas unveiled the team outfits for the forthcoming Paris 2024 Olympic and Paralympic Games.
• March 2024 - Hyundai Motor is the new sponsor of the CONMEBOL Libertadores.
• May 2024 - Red Bull completed the acquisition of Bora-Hansgrohe, the German WordTour team, to make its professional road cycling debut.