Advertiser spend on sports sponsorship is predicted to increase five percent in 2020 to reach more than $48 billion globally, the strongest growth in a decade, according to a new study from WARC, “Sports Sponsorship Investment.”
Record investment ahead of the 2020 Tokyo Olympics is the source of recent market growth as the event is expected to bring in $5.94 billion in revenue from sponsorships, nearly double the previous event. According to WARC, Olympic partners Coca-Cola and Procter & Gamble will spend $1.95 billion worldwide on the event, while domestic sponsors like Canon, Asahi and Fujitsu will spend $3.33 billion, four times higher than the Rio Olympics in 2016.
The majority of investment is concentrated in North America, fueled largely by the financial services sector ($5.3 billion in 2019) and automotive sector ($.24 billion). WARC predicts US brand associations with the National Football League (NFL), Major League Baseball (MLB) and National Basketball Association (NBA) will reach $3.97 billion in value in 2020, just over a quarter of total spend of $18.8 billion this year. The value of NFL sponsorship is forecast to reach $1.53 billion in 2020, up 4.9 percent from 2019. MLB partnerships are projected to increase 5.6 percent in value to $1.05 billion in 2020 and NBA tie-ins are expected to rise 7.1 percent in value to $1.39 billion for the 2020-2021 season.
In the European market, sports sponsorships will grow five percent to $12.9 billion this year, with Germany being the largest market and a projected value of $1.89 billion. Asia is expected to account for 23.9 percent of the global total at $11.6 billion, followed by five percent, or $2.4 billion, from Latin America.
WARC says that brand investment in esports is also growing rapidly and will reach $795 million worldwide this year, an increase of 23.1 percent from 2019. Sponsorships will account for about three quarters of that total, or $584 million, while spots during ad breaks will account for $211 million.