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Welcome to the 2012
European Athletics
CEO Conference
Financing Sports
Professor Dr. Helmut Digel
Universität Tübingen
Presented: 20 April, 2012
Overview
1. Looking back
2. Today′s reality
3. Financing systems in the world of sport
4. Summary of financing possibilities
5. Economic logic – an outlook
1. LOOKING BACK
Financing Sports
1. Looking back
• Self-financing athletics
– Non-governmental
– Voluntary association
– Club regulations
– Membership fees
• Non-commercial athletics
• Amateur athletics
• Athletics – school sport # 1
2. TODAY′S REALITY
Financing Sports
2. Today′s reality
• Athletics – a semi-professional sport
• Code of athletics: have // have not
winning // losing
• Athletics – an economic enterprise
• Athletics – a part of the entertainment industry
• Competition between all sports “survival of
the fittest”
• Decreasing relevance in public schools
2. Today′s reality
• Federations are losing members (30%)
• Revenues from membership fees are
decreasing (31%)
• Only 12 out of 50 federations sell TV
broadcasting rights
• 9 federations have no marketing income
• 16 federations are depending on government
grants of more than 70% of their budget
• Only 18 out of 50 federations organise fund-
raising events
2. Today′s reality - Questionnaire
2. Today′s reality
TOP 10 – Government support (in US $)
1) Great Britain 10.0 Mio.
2) Spain 9.07 Mio.
3) Greece 8.22 Mio.
4) Poland 6.46 Mio.
5) France 5.73 Mio.
6) Germany 5.65 Mio.
7) Turkey 5.15 Mio.
8) Romania 3.70 Mio.
9) Ukraine 3.68 Mio.
10) Russia 3.45 Mio.
2. Today′s reality
TOP 10 – Total budget (in US $)
1) France 29.162 Mio.
2) Italy 24.716 Mio.
3) Spain 18.590 Mio.
4) Great Britain 16.736 Mio.
5) Germany 11.525 Mio.
6) Finland 10.660 Mio.
7) Turkey 9.731 Mio.
8) Netherlands 8.633 Mio.
9) Norway 7.075 Mio.
10) Greece 6.457 Mio.
2. Today′s reality
TOP 10 – Marketing (in US $)
1) Great Britain 9.103 Mio.
2) Germany 5.200 Mio.
3) France 4.064 Mio.
4) Norway 3.213 Mio.
5) Sweden 2.656 Mio.
6) Russia 2.530 Mio.
7) Finland 2.340 Mio.
8) Spain 2.216 Mio.
9) Czech Republic 1.335 Mio.
10) Switzerland 1.250 Mio.
2. Today′s reality
TOP 10 – TV sales 2011 (in US $)
1) Great Britain 2.177.215
2) Italy 1.049.397
3) Monaco 570.594
4) Finland 500.000
5) France 466.360
6) Russia 70.000
7) Spain 62.205
8) Netherlands 42.600
9) Norway 35.100
10) Sweden 32.656
2. Today′s reality
TOP 10 – Membership (in US $)
1) France 7.006 Mio
2) Italy 5.426 Mio
3) Netherlands 3.966 Mio
4) Spain 1.608 Mio
5) Ireland 1.193 Mio
6) Switzerland 1.130 Mio
7) Finland .585 Mio
8) Sweden .510 Mio
9) Greece .426 Mio
10) Germany .300 Mio
3. FINANCING SYSTEMS IN
THE WORLD OF SPORT
Financing Sports
GLOBAL LEVEL
Financing systems in the world of sport
IOC Income 2008 – 2012
Broadcasting Rights $ 2,570 Mio 46%
TOP Sponsorships $ 866 Mio 16%
Domestic
Sponsorships $ 1,555 Mio 28%
Ticket Sales $ 274 Mio 5%
Licensing $ 185 Mio 5%
IOC TOTAL $ 5,450 Mio 100%
Source: Olympic Marketing Fact File 2010 Edition
FIFA Income 2008 - 2012 Event-related revenue $ 3,890 Mio 93%
TV broadcasting rights
Marketing rights
Hospitality rights
Licensing rights
Other
$ 2,448 Mio
$ 1,097 Mio
$ 120 Mio
$ 71 Mio
$ 154 Mio
63%
26%
3%
2%
4%
Other operating income $ 172 Mio 4%
Brand Licensing
Quality Concept
Penalties/appeals/match levies
Other (rental income, film sales)
$ 37 Mio
$ 33 Mio
$ 14 Mio
$ 88 Mio
1%
1%
*)
2%
Financial income $ 127 Mio 3%
Interest
Foreign currency gains
Income from financial assets
$ 51 Mio
$ 64 Mio
$ 12 Mio
1%
1,5%
*)
FIFA TOTAL INCOME $ 4,198 Mio 100%
Source: FIFA Financial Report 2010
*) share in FIFA TOTAL INCOME below 1 %
IAAF Income 2010 Television rights income $ 27,172,403 61%
Royalties IAAF BV
IEC (Europe)
TWI ATHLETIX
$ 7,000,000
$ 20,000,000
$ 172,403
16%
45%
*)
Sponsorship income $ 15,250,000 34%
Samsung Diamond League Title Sponsorship
DENTSU Contract
Continental Program
$ 2,500,000
$ 11,000,000
$ 1,750,000
6%
25%
4%
Financial income $ 706,003 2%
Other income $ 225,826 1%
Other income from activities $ 880,024 2%
Sale of publications & videos
IAAF permit fees
Affiliation fees
IOC contribution for RDC
Airlines travel refund
Identity card
IAAF certification system
$ 54,888
$ 9,850
$ 42,600
$ 182,500
$ 2,293
$ 63,500
$ 524,393
*)
*)
*)
0,5%
*)
*)
1%
IAAF TOTAL INCOME $ 44,234,255 100%
Source: IAAF 2010
*) share in IAAF TOTAL INCOME below 1 %
NATIONAL LEVEL
Financing systems in the world of sport
DOSB Income 2010
Membership fees € 4,429,948 10%
Financial support € 9,776,244 23%
Government subsidies
IOC
Other (for DSJ)
€ 6,889,541
€ 444,174
€ 2,442,529
16%
1%
6%
Marketing € 10,158,986 24%
Olympic Marketing
Other Marketing
€ 9,702,231
€ 456,755
23%
1%
Lottery income from “Glücksspirale” € 6,367,920 15%
Other income € 2,456,465 6%
Interest
Rental income
Other
€ 30,495
€ 497,570
€ 1,928,400
*)
1%
5%
Earmarked funds (for specific projects)
Trainerakademie, Führungsakademie, Integration
durch Sport, DSJ, Dt. Bundesstiftung Umwelt
€ 9,374,371 22%
DOSB TOTAL INCOME € 42,563,934 100%
Source: DOSB 2011
*) share in DOSB TOTAL INCOME below 1 %
DLV Budget 2011
Sponsoring Income € 2,225,000 63%
Membership fees (DOSB fees included) € 245,000 7%
Financial support € 40,000 1%
European Athletics
LSB Rheinland-Pfalz
Department for Foreign Affairs
€ 15,000
€ 5,000
€ 20,000
*)
*)
*)
Licensing € 105,000 3%
Manager Licenses € 11,000 *)
Other income € 98,900 3%
Interest
Rental income
Badges
Fines/Anti-Doping income
Other
€ 1,000
€ 26,400
€ 60,000
€ 5,000
€ 7,500
*)
*)
2%
*)
*)
Income from events € 794,000 23%
DLV TOTAL BUDGET € 3,518,900 100%
Source: DLV, 2011
*) share in DLV TOTAL INCOME below 1 %
REGIONAL LEVEL
Financing systems in the world of sport
WLSB Income 2010
Financial support (state government) € 23,315,114 54%
Trainers
Construction of sports facilities
School & club cooperation
Social services
Education
Disabled sports
Institutional aid WLSB
Institutional aid member associations
Glücksspirale
Landesjugendplan
€ 6,726,582
€ 6,109,917
€ 685,700
€ 1,575,000
€ 3,930,028
€ 143,629
€ 1,604,495
€ 1,566,509
€ 599,859
€ 373,395
16%
14%
1%
4%
9%
*)
4%
4%
1%
1%
Revenues Sport School Albstadt € 3,323,704 8%
Membership fees € 10,358,268 24%
Other income € 2,864,334 7%
Reserves € 2,954,686 7%
WLSB TOTAL € 42,816,106 100%
Source: WLSB 2010
WLV Income 2011 Financial support + Lottery “Glücksspirale” € 450,832 25%
Events € 1,030,181 58%
Fun Runs
Corporate Runs
Event licenses
Registration fees regional championships
€ 835,258
€ 155,448
€ 2,001
€ 37,474
47%
9%
*)
2%
Education and training – participation fees
(High performance sport and sport for all)
€ 53,455 3%
Publications
(WLV vor Ort, WLV Yearbook, Running Calendar
Baden-Württemberg, Brochures & books)
€ 79,970 4%
Starting passes / badges € 34,896 2%
Starting passes
Running and Walking passes and badges
Multisport badges
€ 19,455
€ 3,945
€ 10,164
Other income
(Licenses, other Marketing, donations)
€ 140,697 8%
WLV TOTAL INCOME € 1,790,031 100%
Source: WLV, 2011
*) share in WLV TOTAL INCOME below 1 %
WFV Income 2009 Administration € 1,763,759 21%
Game operations
(league participation fees, administrative charge,
additional fee for clubs – 1/3 each)
€ 921,169 11%
Justice
(Penalties, procedural costs, fines for missing
referees)
€ 1,089,093 13%
Youth Sport
(Youth camps, administrative charge , financial
support DFB)
€ 516,523 6%
Other income
(grants, bfv/wfv magazine, reserves, surplus from
categories above)
€ 2,203,652 27%
Business operation
(Sponsoring: € 428,708,
rental income, GmbH revenues, advertisements)
€ 564,641 7%
Sports hall Wangen
(utilization fees, grants)
€ 1,269,135 15%
WFV TOTAL INCOME € 8,327,972 100%
Source: WFV, 2011
*) share in WFV TOTAL INCOME below 1 %
LOCAL (CLUB) LEVEL –
EXAMPLES
Financing systems in the world of sports
Example 1 – Budget
TV Wattenscheid 01 LA e.V. 2011/2012
Main Sponsor (Energy) 45%
Financial support 32%
Support State of NRW, LSB, LV
Support City of Bochum
Grants DLV
17%
10%
5%
Revenues Half Marathon 11%
Equipment supplier 10%
Membership fees 2%
TV Wattenscheid TOTAL > € 1,000,000 100%
Example 2 –
Budget LAV Tübingen 2011
Booster Club € 60,000 60%
Membership fees
Events (Tübingen City Run)
Sponsors
Donations
€ 40,000
40%
Member clubs € 20,000 20%
Title sponsor ASICS (until 2011) € 10,000 10%
Financial support
(City, State, LSB, LV) 10%
LAV Tübingen TOTAL € 100,000 100%
SPONSORSHIP EXAMPLES
Financing systems in the world of sport
Sponsorship examples Sale of rights
• Competition support
• Podium medal ceremony
• Promotional announcement
during event
• Big screens
• Scoreboard
• Bags
• Track surface
• Flower lanyards
• Mobile cameras
• Umbrellas
• Perimeter boards (rotating,
digital, virtual boards)
• Bibs
• Camera carpet
• Car exhibition
• Start and finish
• Athlete′s apparel
• Official′s apparel
• Photographer′s apparel
• Technical personnel apparel
• Competition equipment (Paul
vault and high jump mat,
hurdles, electrical equipment)
• Drinking stations
• Canopy
• Product placement
Examples
Perimeter boards
Examples
Jerseys
Examples
Graphics
Examples
Tattoos
Examples
Camera carpets
&
Virtual boards
Examples
Websites/Internet
Example SEIKO
Example SEIKO
Example SEIKO
Example SEIKO
4. SUMMARY OF FINANCING
POSSIBILITIES
Financing Sports
• Financial support / grants • Government
• National/international/regional
federations
• Sale of broadcasting rights
• Sale of marketing rights
• Sale of licensing rights
• Sale of hospitality rights
• Sale of equipment supplier
rights
• Sale of publications & video
• Merchandising
• Ticket sales
• Membership fees
• Registration fees
• Lottery / Betting
4. Summary of financing possibilities Sources of revenue for sports organisations
• Donations
• Financial income • Asset management
• Interest
• Rental income
• Deposits and borrowed funds
• Financial support / grants • Government
• National/international/regional
federations
• Manager licenses
• Income from events
• Educational programs
• Education training programs
• Further training
• Transfer revenue
• Penalties / appeals / fines
• Certification system
• Etc.
4. Summary of financing possibilities Sources of revenue for sports organisations
Ref: SV 1899 Vieselbach e.V.
Membership fees
4. Summary of financing possibilities Sources of revenue for sports organisations
Ref: SV 1899 Vieselbach e.V.
New membership possibilities
4. Summary of financing possibilities Sources of revenue for sports organisations
Ticket sales
4. Summary of financing possibilities Sources of revenue for sports organisations
Television rights
4. Summary of financing possibilities Sources of revenue for sports organisations
Sponsorship rights
4. Summary of financing possibilities Sources of revenue for sports organisations
Hospitality
4. Summary of financing possibilities Sources of revenue for sports organisations
Merchandising
4. Summary of financing possibilities Sources of revenue for sports organisations
Naming rights
(venue; e.g. right to bear name, right of access,
right of use)
4. Summary of financing possibilities Sources of revenue for sports organisations
Donations
• donations are tax-deductable
• possible forms of donation
financial
material
services
• donors receive a donation receipt
4. Summary of financing possibilities Sources of revenue for sports organisations
Grants & Subventions
1. material
2. financial
• National / international Federations
• Federal government
• State government
• City
4. Summary of financing possibilities Sources of revenue for sports organisations
Asset management Interest
4. Summary of financing possibilities Sources of revenue for sports organisations
Deposits and borrowed funds
• Bond issues
• Loans
• Credit
4. Summary of financing possibilities Sources of revenue for sports organisations
5. ECONOMIC LOGIC –
AN OUTLOOK
Financing Sports
Supply Demand
Costs
Costs
5. Economic logic – an outlook
The cycle of supply and demand
5. Economic logic – an outlook
The economic cycle of TV systems
Audience
Market share
Advertising revenues Procurement market
Programs
Securing/
Increasing
Structuring Guarantees
Competitiveness
Securing/
Increasing
Ref: WALLISER, B.: Sponsoring. Bedeutung, Wirkung und
Kontrollmöglichkeiten. Wiesbaden 1995, 75.
Consumer
Businesses Media
Sport
5. Economic logic – an outlook
Marketing Relationships
Product Pricing Promotion Placement
Corporate Identity Policy
Media Advertisement
Sales Promotion
Direct Marketing
Public Relations
Event Marketing
Sponsorship
5. Economic logic – an outlook Marketing instruments (4 Ps)
Ref: WALLISER, B.: Sponsoring. Bedeutung, Wirkung
und Kontrollmöglichkeiten. Wiesbaden 1995, 80.
Psychological goals: degree of popularity
image
sympathy
Economic goals: volume
turnover
gains
5. Economic logic – an outlook
Sponsors′ goals
Attract Attention on the
sponsoring product
Arouse Interest and Desire
respectively for the product
Induce to a purchase Action
Ref.: Walliser, B.: Sponsoring. Bedeutung, Wirkung und
Kontrollmöglichkeiten. Wiesbanden 1995, 80;
Ref.: Das Werbewirkungsmodell AIDA (ROGGE 1990, 50)
5. Economic logic – an outlook
The AIDA model – 3 effects of sponsorship
Individual athletes Teams Clubs/associations
Events
Marketing(goals) Research &
Development Production Finances Human resources
Promotion (goals) Product Price Place
Sponsoring (goals) Advertisement PR Sales Promotion Direct
Communication
Sports Sponsoring
Environmental Sponsoring
Cultural Sponsoring
Programme Sponsoring
Social Sponsoring
Athletics Football Formula 1
Competitive Sport Amateur Sport Age group
5. Economic logic – an outlook Marketing options – Sports sponsoring from a
business point of view
Country Athletics First place Second place
GER 3rd place Football Formula 1
ITA 7th place Football Formula 1
UK 4th place Football Rugby
USA 14th place American Football Basketball
JPN 8th place Baseball Football
RSA 5th place Football Rugby
5. Economic logic – an outlook
Preference for sports
Athletics
Soccer
Golf
Tennis
Swimming
Basketball
Ice skating
Judo
Biathlon
Horse riding
Luge
Ice hockey
Performance
Organisational level
Professional
sport
High level
sport
Mass
sport
Youth
sport
Individual
athletes
Sport teams
Sport event
Sport clubs
Sport
federations
Sport
organisations
5. Economic logic – an outlook
Decisional dimension of sport sponsoring engagement
Ref.: Bruhn, M. „Sponsoring“ 2003, p. 41
Sport
• Considerable changes of structure in media and communication
markets
• Diffuse losses and reaction problems with traditional communication
instruments
• Cost explosion at attractive sports events
• Problems with analysing and measuring of effects and efficiency
• Development of interactive marketing and communication
“instruments” through multimedia
• Necessary new orientation of the company′s integrated
communication strategy
5. Economic logic – an outlook
Future perspectives of sponsorship in sports
The development of sport sponsorship is influenced by:
• more professionalism
• better planning
• a higher quality of communication
• relevance for the core business
• more credibility & effectiveness
• long term agreements
5. Economic logic – an outlook
The future of sport sponsorship