Sponsorship in Brazil

‘Brazil - Sponsorship Analysis’ is a report that was published by International Marketing Reports as part of its Sponsorship Today monthly report series. Here we publish an exclusive extract from the report and offer MEI readers the chance to buy the report at a special discounted price.

Brazil is also arguably more westernised than its BRIC competitors and is developing a marketing culture akin to that of the USA and Western Europe. With increasing numbers of advertising, marketing and sponsorship agencies setting up joint ventures in the country, the level of expertise is increasing. Such agencies work with major brands to negotiate and activate sponsorship rights and this has led to an uptake in the use of sponsorship by the major corporates.

That said, it is widely acknowledged that brands, and rights holders in particular, have yet to fully understand the potential offered by sponsorship and the commercial culture within the sports industry is still immature.

This is evidenced by the large numbers of short-term deals signed, even for some of the biggest sports properties such as primary sponsorships for leading football clubs. It is generally accepted in mature markets that sponsorship deals require a minimum of three years to really work for the brand. Yet in Brazil it is not uncommon for deals worth more than $10m to last for a single year.

Despite this, there is clearly an appetite for sponsorship that is likely to grow in the next few years and the staging of the FIFA World Cup and Olympic Summer Games will ensure that the level of marketing expertise in the country improves. In the long-term, this should ensure that the sponsorship industry becomes more mature with brands, rights holders and agencies embarking on a steep learning curve.

Football Leads the Way

The revenue growth in Brazilian football has been noticeable in recent years. Football is by far the most dominant sport in the country, accounting for 62% of the value of sponsorship expenditure. This development had been curtailed in the past three decades by the financial power of European football. Quite simply Brazil’s best players joined clubs in Italy, Spain, England and Germany where wages and transfer fees have been much higher.

Although the big European clubs still offer much higher wages, the differential is narrowing as Brazilian club football develops. A new TV deal worth $630m per year has been signed between the Campeonato Serie A clubs and the nation’s dominant broadcaster Globo.

However, matchday revenues and other commercial income remain relatively low. Corinthians record ticket receipts in 2012 averaged $492,250 per match whereas in Europe, big clubs such as Real Madrid, Barcelona, Arsenal and Manchester United can achieve $5m. This is expected to change as new and refurbished stadia come on stream for the 2014 World Cup, although perhaps at a slower than might be expected. There is resistance to ticket price increases and stadium naming rights among fans and a lack of commercial expertise to develop hospitality and merchandising among clubs.

The saving grace, to an extent, is the willingness of brands to offer personal endorsements to top players. These deals can equal those in Europe and it is believed that this is a prime reason for Santos star, Neymar, staying in Brazil rather than moving to one of the European giants.

As Brazilian clubs retain their top players, and even attract back those who had left for Europe such as Ronaldinho (admittedly his best playing days are behind him), the national and international profile of the clubs grows and the value to sponsors increases.

With Brazil’s economy continuing to grow and Europe’s stagnating, there is a possibility that Brazilian club football will further narrow the revenue differential, retain and attract more top players and start to have significant international appeal to TV audiences in Asia and Europe. This in turn would increase international TV revenues and a positive spiral could ensue, which in the long-term could start to challenge European club dominance. In such a scenario, the sponsorship value of the clubs involved would obviously increase further and thus boost the sponsorship industry in the country.

That said, it is unlikely that this will come about until after the 2014 World Cup, which could showcase football in Brazil in a similar manner that for Italy during the 1990 World Cup.

With 328 top deals analysed, the report shows that football is by far the dominant sport in Brazil. The nation has always had a reputation for its passionate following of the game and the national team has been more successful than any other country having won the World Cup a record five times.

Special Offer for MEI Readers

For further details about the report, please visit: www.imrpublications.com/overview.aspx?sid=36&rid=2

The normal price of the report is £495 but IMR is offering MEI readers the chance to purchase it for £395. Simply contact International Marketing Reports quoting ‘MEIBrazil2013’:

T: +44 (0) 1364 642224
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