The global sports sponsorship market is experiencing a meteoric rise, with its value escalating from $73,807.2 million in 2022 to a projected $151,394.7 million by 2032. This booming trend has seen an influx of companies, even those unrelated to sports, incorporating sponsorships into their marketing strategies. Despite enduring two decades of sustained expansion and facing criticism primarily from fans and sports media, particularly towards gambling companies, sports sponsorships remain integral to sporting events.
In the digital age, the prevalence of sponsorships, including those related to gambling, is evident even at the pinnacle of English football - the English Premier League (EPL). In the 2022-2023 season, Everton F.C. announced Stake.com, a crypto betting behemoth, as their major sponsor. The same company also sponsors Watford F.C., competing in the English Football League Championship (EFL) the same season, and has partnered with Ultimate Fighting Championship (UFC) in 2021. Furthermore, it boasts associations with sports superstars such as Sergio Agüero and Israel Adesanya.
The reasons behind these companies' eagerness for such deals lie in the mechanics of sponsorship marketing and the particular attraction of the sports industry. Understanding how sponsorship marketing operates can shed light on why many companies are targeting this sector.
Sponsorship Marketing
Sponsorship marketing, a strategy where a company finances an event organized by another entity for mutual benefit, has become a mainstay in many industries. The sponsoring party typically uses the platform to advertise its products, often targeting a shared market base with the sponsored entity, without being direct competitors.
This approach is particularly effective in the sports industry, where fans are likely to engage in activities such as sports betting or online gambling. Thus, it's strategic for gambling companies to partner with sports clubs. The widespread broadcasting of sports events like football and basketball on television networks further amplifies the attractiveness of this investment for betting firms seeking to broaden their reach.
For instance, sponsoring an EPL club can give a betting firm exposure to over 1 billion households globally, translating to visibility for their logo on players' shirts to at least 3 billion people worldwide. However, such high visibility comes with a hefty price tag, contingent on the nature of the deal and the club's fan base. Renowned teams like LA Lakers or Manchester United command higher sponsorship fees, while even smaller-market clubs can secure multimillion-dollar sponsorship deals.
The Surge of Sports Sponsorship by Gambling Companies
In the sporting world, gambling companies have increasingly become a prominent feature on team kits across various sports. A prime example of such a company is Stake.com, recognized as one of the largest gambling websites globally. Not only does it sponsor Twitch Streamers and the UFC, but it has also signed deals with prominent figures like rapper Drake and boasts over 80 billion reported transactions. This trend underlines the significant growth and influence of the crypto gambling business, with sports leagues worldwide welcoming the influx of sponsorship money.
The prevalence of gambling sponsorship in sports took off in the 21st century, despite its existence earlier. Fulham was among the pioneering top-flight football clubs to sign a deal with a betting firm, becoming the first Premier League team to display a gambling company as its main shirt sponsor. This trend caught on, with half of the Premier League teams having a similar setup by 2019.
Similarly, Spain's La Liga also benefited from this growing market, with eight clubs featuring a gambling company on their shirts in the 2019/20 season. However, this practice was halted by the Spanish government, resulting in zero betting sponsors in the 2021/22 campaign.
The conversation about sports leagues and gambling sponsorships would be incomplete without the National Basketball Association (NBA). In 2018, the NBA became the first major US sports league to ink a deal with a betting firm, a move later emulated by the National Hockey League (NHL) and Major League Soccer (MLS).
To summarize, several sports leagues have partnered with betting firms over the past two decades, including the English Premier League, English Football League Championship, Ligue 1, La Liga, Bundesliga, Serie A, Major League Soccer, National Basketball Association, WNBA, National Hockey League, and the Ultimate Fighting Championship.
Gambling Sponsorship, A Contentious Issue
The topic of gambling sponsorship has been a contentious issue, particularly in the realm of football. Fans, government representatives, and sports media have united in opposition to the influence of betting industry sponsors. This scrutiny has amplified over recent years in major European football leagues, prompting significant changes.
The Premier League, the most-watched football league globally, has found its stance on gambling sponsorship deals under intense public scrutiny. While individual clubs have made their own decisions regarding these sponsorships, there has been no official ban implemented in the U.K., keeping the debate alive and frequently in the headlines.
In contrast, Italy's top-tier football league, Serie A, took decisive action by implementing a year-long ban on betting firm sponsorships during the 2019/20 season. This decision significantly impacted Juventus, the 2020 Serie A champions, resulting in the termination of their relationship with the club's official betting company. Following this, Juventus experienced a dip in performance and financial struggles, highlighting the substantial role that gambling partnerships play in this league.
Similarly, Spain's La Liga also adopted a hardline approach by banning gambling-related sponsorship deals. Clubs previously sponsored by betting firms were permitted to complete the 2020/21 season before seeking alternative sponsors. Notable clubs such as Granada, Levante UD, Sevilla, and Real Betis were among those affected by this change, reshaping the landscape of football sponsorship within the league.
What is the reason for the criticism?
The strained relationship between gambling sponsors and the football community is primarily due to the level of exposure these companies receive. Critics argue against the influence of these sponsorships, particularly considering the young demographic within football fandom.
A 2018 survey on gambling behavior revealed that children as young as 11 in the U.K. were regularly betting, with many citing TV ads as their influence. While this study focused on U.K. minors, the issue transcends demographics and sports leagues, with some individuals even losing assets due to gambling.
Of course, the responsibility cannot be solely attributed to gambling sponsorships. Regulatory authorities expect licensed companies to promote responsible gambling, with many firms adjusting their policies to monitor their clients' betting activities.
However, this has not appeased fans, media personalities, and other stakeholders who believe that the visibility these brands gain significantly influences overall gambling behavior.
While watching a live match, it's common for viewers to see gambling ads on their screens, in addition to company logos on team shirts and digital platforms. Despite an agreement by gambling companies a few years ago to halt pop-up TV ads, critics argue that little has changed.
These brands target live matches for advertising due to their global reach. Major European leagues, especially the Premier League, are among the most-watched sporting events worldwide. This high visibility might explain why the football community is more vocal about this issue than other sports.
Advantages of Gambling Sponsorships in Sports
The symbiotic relationship between sports and betting often makes it difficult to separate the two, including at the sponsorship level. Despite ongoing debates about the future of gambling sponsorships in major leagues, it's important to consider the benefits these deals bring and who profits from them. Both the sponsor and the sports club derive advantages from this mutual relationship. Here's a general look at the perks of maintaining gambling sponsorships:
Financial Aid for Clubs
The most evident advantage for clubs is the financial support they receive during the sponsorship term. For instance, Stake.com's GBP£10m-per-year shirt deal with Everton ensures that the club receives UK£10m (USD$10.9m) each season, even if they part ways. Every club, regardless of the sport, requires funds to operate, including staff salaries, facility maintenance and renovations, and other matchday activities. The revenue from sponsorship deals plays a crucial role in maintaining the financial stability of these clubs, as evidenced by the financial struggles of top Italian clubs after parting ways with their gambling sponsors.
Advertising Platforms for Sponsors
Both parties in a marketing sponsorship reap benefits. In sports, gambling sponsors gain an excellent platform to promote their services, with their logos potentially appearing on the club's digital platforms or kits. The sponsorship fee depends on the expected coverage. Therefore, sponsors tend to invest more in teams with a strong foundation and popular sports. For example, teams in the English, Spanish, or Italian leagues may command higher fees due to their guaranteed extensive exposure.
Expansion of the Club's Fan Base
Certain clubs engage in these agreements to expand their supporter base. The sponsoring gambling firm might leverage its database to advertise merchandise and tickets to prospective fans. The attraction of new supporters may hinge on the team's standing and the level of entertainment they offer. Nonetheless, this is usually not the main driving force behind clubs pursuing sponsorships from gambling companies.
Improved Sales Opportunities for Sponsors
Sports fans often prefer to place bets with a company associated with their favorite team, leading many gambling companies to invest in partnerships with sports teams or associations. While matchday marketing is already advantageous, targeting the fans of the clubs they sponsor can significantly boost their conversion rate.
Endnote
Predicting the future of gambling sponsorships in sports, particularly in football, is a challenging task. For many years, this partnership has been widely accepted, but it now finds itself under scrutiny from sports enthusiasts. The gambling industry's influence on various sports has been a blend of positive and negative.
Prominent European football clubs, for instance, have reaped significant financial benefits from such sponsorship arrangements. This trend is visible across the U.K.’s Premier League, Italy’s Serie A, Spain’s La Liga, and France's Ligue 1. Other sports, such as the NBA, which became the first major U.S. sports league to have a betting firm as an official league sponsor, have also experienced these advantages. The NHL, NFL, and UFC are other entities that have profited from gambling sponsorship agreements.
However, the sports community is also grappling with a downside: these partnerships contribute to the normalization of gambling. Alarmingly, underage individuals are engaging in betting activities more than ever before. As a result, governments in countries like Spain and Italy have imposed bans on such sponsorships, with the U.K. government also considering similar measures.
The question then arises - what does the future hold for these partners? The issue is contentious, with the current scenario being a power struggle between the governments and the sponsorship partners, including sponsors and clubs. The Italian Football Association, for example, is appealing to the Italian government to revoke the ban implemented in 2019. It is hoped that all parties involved will reach a consensus that caters to everyone's interests.
