Sponsorship Worth $1bn

The Brazilian sports sponsorship industry is now worth $1bn per year according to a new report from Sponsorship Today. The report examined more than 300 national deals and found that the market had grown by more than 200% since 2005.

The rate of growth, however, is now slowing having seen a major surge in the past three years with domestic deals for the FIFA World Cup in 2014 and the Rio Games in 2016.

"The major deals for 2014 are now pretty much complete and it is difficult to see many more Tier 1 deals for Rio 2016," says report author Simon Rines from IMR.

"The 2016 deals so far signed have been huge, but in most of the remaining domestic categories it is difficult to see where brands willing to spend in the region of $300m will come from. The sports clothing deal has been concluded in the Tier 3 category and it's unlikely that a major airline would commit to Tier 1 levels of spend in Brazil. There are still options in food, energy and oil, but in the latter categories the big domestic brands are state-owned, which isn't necessarily a problem given that it is in the political interests of the country to fund the Games. State-owned companies do have significant sponsorship portfolios used for business reasons. Certainly Petrobras would be a candidate for an oil deal, but it has a significant domestic portfolio already."

The report also shows that two of the country's leading football clubs, Corinthians and Flamengo, are currently without primary sponsors. Both are holding out for major deals, but no club has matched Corinthians' $23 million deal, signed two years ago, with pharmaceutical group Hypermarcas.

The report shows that total rights fee expenditure is likely to fall after the Rio 2016 Games but this is down to the huge value added by the World Cup and Olympics.

"The two events are so big that they will account for around 30% of the market for the next few years," says Rines. "It is inevitable that spend will fall when that contribution is removed."


The findings do, however, suggest that one of the legacies of hosting the World's biggest sporting events will be a much more mature market in which brands are more likely to understand the value of sponsorship and rights holders will be more professional in helping them achieve it.

"At present there is widespread acknowledgement that the commercial know how among rights holders still leaves a lot to be desired. This is bound to change as they go on a steep learning curve," says Rines.

Added to this will be a massive upgrade to the country's sports infrastructure with new and refurbished stadia helping to put sport on a more professional footing.

Analysis also suggests that Brazilian football, by far the dominant sport in the country, is closing the gap on its European counterparts.

A major new TV deal, along with the new stadium developments, means that club revenues are growing and set to continue that growth. Already several major stars have returned to Brazil and the country's clubs are retaining big name players such as Neymar. It means that their value to sponsors is growing in both domestic and overseas markets where Brazilian club football is achieving a higher profile.

The report concludes that the sponsorship spend in is Brazil is likely to be among the top six globally for the next few years and the long-term outlook is for a dynamic industry.

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