Last week’s news that FIFA will allow the 16 host cities for the 2026 World Cup to sell local marketing rights marks a first for the tournament.
On one hand, it marks a departure for one of the first major properties to go all in on the fewer-bigger, less-is-more approach to sponsorship.
Twenty years ago, FIFA began exploring the possibility of offering fewer, more exclusive sponsorship opportunities in hopes of maximizing potential revenue by offering a broader package of rights and a less cluttered environment to a small group of partners.
Its revamped sponsorship program, fully in place for the 2007-10 cycle, limited sponsorship to six FIFA Partners, eight World Cup Supporters and six National Supporters in South Africa for the 2010 event. Sponsorship revenue nearly tripled from an estimated $584 million for the 1998-2002 period to $1.6 billion for ’07-’10.
On the other hand, as successful as that strategy was at limiting clutter and raising revenue, it is not surprising that FIFA is offering assistance to the 2026 North American host cities by permitting them to bring in local corporate partners. Refusing to give local organizers a chance to offset some of their hefty costs could further diminish interest from future bidders for the tournament.
Although detailed plans have not been revealed, the approach reported by Sports Business Journal appears to be a reasonable attempt to protect the companies shelling out tens and hundreds of millions of dollars to be part of FIFA’s Commercial Program.
Similar to the corporate partner programs of NFL Super Bowl host committees, the World Cup local supporters will not be able to tout their affiliation outside the local market and will not be able to use FIFA marks, logos or other IP. In addition, companies in specified categories that conflict with FIFA’s official sponsors will be restricted from becoming local supporters.
Sources said each host city would be able to sign a maximum of 10 partners and provide them with IP rights identifying them as a local supporter.
While it appears FIFA may be able strike a balance between the competing needs of its major sponsors and its host cities, a comment by Harris County-Houston Sports Authority CEO Janis Burke should raise a note of caution.
Burke said Houston’s World Cup organizers hope to raise “between $65 million and $90 million from the supporters program.” Using the low end of that range and the maximum 10 partners, that would mean the starting price for a local supporter in Houston would be $6.5 million. That’s a figure probably pretty close to what Shell Energy will pay annually to put its name on Houston’s MLS/NWSL soccer stadium, in a deal announced this month.
It’s not impossible that a prospective partner’s valuation could reach that level, but given the many necessary restrictions on local supporters, World Cup organizers would be wise to look at other comps aside from stadium naming rights.