European sponsorship market falls by 23% to lowest level since 2010, ESA Sponsorship Market Overview finds
The European sponsorship market shrunk for the first time in almost a decade as the negative effects of the COVID-19 pandemic were felt across the continent, new research from the European Sponsorship Association in cooperation with Nielsen Sports has revealed.
The 2021 ESA Sponsorship Market Overview has found that the total value of Europe’s sponsorship market contracted 23% over the last twelve months, falling from a record €30.69 billion in 2019 to €23.63b in 2020 – its lowest point since 2010.
In a sponsorship landscape characterised by event cancellations and postponements, non-sport rights holders saw their sponsorship income halve year-on-year, from €10.43 in 2019 to €5.19 in 2020, with sectors such as the music industry suffering a 60-70% decline in sponsorship volume depending on the market, and severe contractions in areas such as exhibitions. While still badly hit, sports saw a comparatively small dip, down 9% to €18.42b.
Also notable was the differing fortunes of major or minor rights holders – while various elite sporting maintained or even slightly increased sponsorship volume, the shorter contract duration and higher reliance on fan attendance at smaller rights holders saw them suffer much larger declines in sponsorship volume.
Italy was hardest hit, suffering a 33% decline year-on-year, closely followed by France (32%). Other nations to record notable decreases included Ireland (down 26%), Spain (down 23%) and Germany (down 22%).
However, there was some cause for optimism, as the final four months of 2020 all saw a higher number of deals signed than the preceding year, according to Nielsen Sports SPONSORGLOBE, the world’s most extensive sponsorship database.
Football continued to dominate the sponsorship market, making up 49% of total deals by number of deals. Gaming and esports thrived during lockdown, rising to second place with 12% of deals, followed by handball, basketball and rugby union.
Marco Nazzari, Managing Director International, Nielsen Sports, said:
“A disrupted world is changing the value of sponsorship. Uncertainty caused by the COVID-19 pandemic has accelerated shifts in the way rights holders sell sponsorships and brands make sponsorship investments and activate their partnerships. Last year, most sponsors showed a high level of solidarity with their rights holders – not exclusively, but in some cases due to the fact that compensation rights could be implemented to satisfy the sponsors.
“Contract extensions will probably be more challenging in the future, due to economic difficulties or reduction of marketing expenses in certain industries or companies. Much of this development in 2021 will continue to be dependent on the evolution of COVID-19. New sponsorship entrants, new channels and new fan necessities will impact the key sponsorship value drivers in 2021 and beyond.”
Andy Westlake, Chairman of the European Sponsorship Association, said:
“There is no doubt that Europe’s sponsorship community has gone through an incredibly difficult twelve months, and this is borne out in the data in our latest ESA Sponsorship Market Overview. While a downturn was always to be expected, a 23% reduction in the industry in just one year shows the magnitude of the recovery needed.
“However, we’re already seeing some positive green shoots. The rapid roll out of the vaccine programme in many European countries means that live sport and entertainment is back on the agenda in the summer. We have also seen some real innovation in the work itself – meaning the industry is prepared like never before to build connections through sponsorship under the most challenging of conditions. We know the sponsorship sector is resilient and creative, and there is cause for renewed optimism in 2021 and beyond.”
Produced using Nielsen Sports Market Intelligence and available exclusively to ESA members, the ESA Sponsorship Market Overview has been conducted annually since 2008.
ESA members can see the full report here.
ESA members can see the full report here.