EURO 2024: How does the European money turn?

The mascot of the European Championship in Germany / Photo RALF HIRSCHBERGER/ AFP/ Profimedia

The European Football Championship starts today (June 14), and then not only the ball will roll, but also the money. A lot of money. Most of the sponsors are companies from overseas countries, especially from China.

With the innovation of the boots, which were first worn at the World Cup in 1954, Adidas significantly contributed to the triumph of the German team at that tournament in Switzerland. That novelty gave the Germans an advantage over the favored Hungarians, because the field was slippery due to the rain.

In the decades that followed, the partnership between the DFB and Adidas became a natural thing, almost a kind of symbiosis. Many football fans were therefore shocked by the DFB's decision, there was misunderstanding in business circles about the move, and the DFB was criticized even by members of the German federal government. Health Minister Karl Lauterbach (SPD), for example, wrote on Platform X: "I think it's a wrong decision, commercialization is destroying tradition and part of the homeland."

And the Minister of Economy Robert Habek (Greens) complained like this:

"Adidas and black-red-gold have always gone hand in hand for me." It is part of the German identity. I wished there was a little more patriotism."

Shock after shock

It is difficult to find out on what basis such a decision was made. The DFB would not respond to DW's request, but instead referred us to the tournament organizer – UEFA (European Football Federation) based in Nyon, Switzerland. But we did not receive an answer to our questions from UEFA either.

We were sent a very short list of five business partners: Adidas provides "soccer balls and equipment for volunteers and contributors", Atos is in charge of IT during the tournament, and BYD provides a "fleet of electric cars". And then there's Coca-Cola ("saves fans, volunteers and officials from dehydration"), as well as Deutsche Bahn (German railways will offer tickets during the tournament under special conditions).

A study by the University of Hohenheim published in June and conducted under the direction of Professor Markus Fett concluded that Adidas is the most well-known sponsor: around 56 percent of Germans know that the sports equipment manufacturer supports EURO 2024. But "far behind Adidas are companies like Betano and Atos, both with a degree of closeness of around three percent. They are indeed official sponsors of the European Championship in Germany, but only a part of Germans know about them."

An advantage for China

In order to find out a little more about the way of selecting sponsors, we talked to Professor Henning Feppel. This economist and director of the Center for European Policy, has little understanding of the requirements for German companies to sponsor a "domestic" tournament. He told DV: "Consumer markets are largely global markets, and football is a global business, especially when it comes to an important event like EURO 2024. It is quite clear that the sponsorship market functions in principle as a global market." The globalization of the economy and the commercialization of football go hand in hand.

But not all of UEFA's partners are from overseas countries, notes Fepel.

And there is a reason for that: "In addition to world sponsors, there are also national sponsors." "With the help of such differentiation, UEFA can maximize its income from sponsors - while at the same time taking care of national sentiments," adds Fepel.

We don't talk about money

Why do the actors in the process not want to talk about the details? One explanation is that too much talk of money can threaten the very foundations of the football representatives' business model. Sports associations are often organized as non-profit organizations and therefore pay relatively little tax. Big tournaments like this one in Germany often manage to make sure they don't pay tax on their tournament income in the host country.

In addition, fans could develop a certain aversion to the amount of money that flows into the accounts of football associations. If they knew exactly how much money is being made in that sport, how much money is being spent on all those ancillary things, maybe the fans would get the feeling that someone is pulling their noses and taking advantage of their love for football.

Marketing expert Peter Rohlmann explained the high prices of fan paraphernalia to the German public broadcaster WDR this way: "Emotionalism pushes the rationality of prices into the background. Clubs and companies that cooperate with them know that. They ask for as much money for these products as the fan is ultimately willing to pay." But Rollman believes that the limit has been reached, that things must not get more expensive: "They don't want to overdo it, because they know that's where the limit is."

Does sponsorship pay off?

Fifty percent of the money spent on advertising – as the American industrialist Henry Ford allegedly once said – is money thrown out the window. And he added that the only thing he doesn't know is which half is thrown into the wind. A study by the University of Hohenheim comes to a similar conclusion. Scientists there say: "It is questionable whether corporate sponsorships really pay off."

Source: Deutsche Welle/ Author: Dirk Kaufmann

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