Sports Sponsorship Market

Market Overview

The global sports sponsorship market size was valued at USD 50.49 billion in 2022. It is estimated to reach USD 112.22 billion by 2031, growing at a CAGR of 9.28% during the forecast period (2023–2031). The large number of sporting events organized worldwide majorly drives the growth of the global sports sponsorship market. These events have high viewership, attracting many sponsorships from various companies. Moreover, the growing viewership of sports events for entertainment will likely further boost the market's growth.

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.

Market Dynamics

Global Sports Sponsorship Market Drivers

Large Number of Sporting Events Organized across the World 

A wide range of sports is played across the world. These sports ' different associations and governing bodies organize large-scale events worldwide where athletes and teams participate. Some of the sporting events are held every year or after fixed intervals. For instance, competitions such as the UEFA Champions League, Super Bowl, tennis Grand Slam tournaments, Formula One racing, and NBA are held yearly.

Likewise, the FIFA World Cup, Olympic Games, ICC Cricket World Cup, and Rugby Union World Cup are just some of the events held at regular intervals of four years. These events have high viewership, attracting many sponsorships from various companies. Moreover, new sporting events are also organized across the world. A large number of sporting events held and new ones being organized boosts the sports sponsorship market growth.

Growing Viewership of Sport Events 

Sports are one of the oldest and most popular forms of entertainment worldwide. The viewership for sports has been more than that of movies and TV shows. For instance, association football has an average daily viewership of 3.5 billion, cricket has 2.5 billion, and field hockey has 2 billion. Moreover, there has been a notable rise in individuals attending various sporting events. For example, the 272 regular-season NFL games in 2021 averaged 17.1 billion viewers across television and digital platforms. This was a 10% rise over 2020, the highest average since 2015.

Similarly, the 2021/22 UEFA Champions League final between Real Madrid and Liverpool averaged 2.76 billion viewers in the USA, growing by 23% over last year's final between Chelsea and Manchester City. The growing viewership offers a broader reach to the sponsors, driving the sports sponsorship market.

Global Sports Sponsorship Market Restraint

Budget Constraints and Increasing Cost of Sponsorships 

Increasing competition and the growing cost of organizing events drive sponsorship deals' prices. For instance, the marketing agencies expect teams, leagues, and media companies to increase sponsorship prices by 18-20%. Similarly, sports sponsorships were up by 107% in 2021, according to the 2022 Nielsen Sports Report. The growing prices of sponsorships by the associations, teams, and athletes put strain on the budget of several sponsors. The sponsors with limited budgets cannot afford the price hikes. This, in turn, hampers the growth of the global sports sponsorship market.

Global Sports Sponsorship Market Opportunities

Increasing Adoption of Marketing Analytics 

Data analytics tools are helping companies to streamline their business operations and improve efficiency and productivity across different functions. These tools have also been used in marketing, leading to the rise of marketing analytics. The sponsors are adopting marketing analytics that combines data science and research to understand how sponsorships drive brand reach and business outcomes.

Moreover, marketing analytics solutions are helping brands formulate the right sponsorship mix to increase their brand visibility. Therefore, adopting marketing analytics tools helps the sponsors optimize their budget and sign the best sponsorship deals. This, in turn, offers growth opportunities in the global sports sponsorship market over the forecast period.

Regional Analysis

Based on region, the global sports sponsorship market is bifurcated into North America, Europe, Asia-Pacific, and RoW.

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 region 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 huge 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 deal with the NBA and NFL and is also a big sponsor of the NHL.

Furthermore, Red Bull, a huge sports sponsor, 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. Thus, such sponsorships are expected to drive the North American regional market growth.

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 region. Countries like the United Kingdom are notable for the multiplicity 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. Europe is the second-largest region 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 the Asia-Pacific region, the sports sponsorships market is expected to develop fastest. 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 in sports and exercise activities, particularly in 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 key factor pouring the market to grow in the Asia Pacific region.

The RoW comprises the Middle East and Africa and South America region. In South America, Brazil and Argentina are the frontrunners in the sports sponsorships market. The government initiatives for creating awareness regarding sports merchandise also bolstered the demand for sports sponsorships in the South American region. Additionally, the Middle East has a greater 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 bifurcated into 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 largest 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 insignia 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 wider, 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, training sponsorship, and others. 

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 Manchester United training kit sponsorship to its sports portfolio. Manchester United of the Premier League has signed a multi-year training kit sponsorship deal with the blockchain company Tezos. The deal is believed to be worth £20m (€23.7m/USD27.3m) per season. As per the Athletic Sports News service, the Tezos logo features 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

• August 2023- Riyadh Air and Atlético de Madrid inked a multi-year sponsorship agreement designating the airline as the club's official airline partner. This is the first sports sponsorship agreement signed by Riyadh Air since its official launch in March.

• October 2022- American Express announced a multi-year partnership with F1, marking the company's first new sports sponsorship in over a decade. Amex's first multi-market sports partnership encompasses the global racing series' stops in Austin, Texas; Mexico City; So Paulo; Las Vegas; Miami; and Montreal. Additionally, American Express will sponsor the F1 Academy.