Fifa sold eight of its 20 third-tier Regional Supporter slots for the 2018 World Cup, priced at between $8m (€6.8m) and $12m each – better than expected at one stage, but still costing world football’s governing body tens of millions of dollars in lost revenue.
The reputational damage of corruption scandals under former Fifa president Sepp Blatter appeared to put off brands from the US, Europe and Japan, leaving the host country Russia, China and Egypt as the only sources of interest in the third-tier regional packages
Since the 2014 World Cup, Fifa has lost British engine oil brand Castrol, German tyre company Continental, US-based personal care group Johnson & Johnson, Japanese electronic brand Sony and Gulf airline Emirates from its top two sponsorship tiers. No brand from these major markets made a bid for the regional packages.
In addition to Fifa’s reputational crisis, delays in the progress of digital replacement technology (DRT) – which would have given regional sponsors significant exposure on World Cup stadium advertising on broadcast feeds in each region – also hurt sales.
Expecting to register an uplift from brands competing for these ‘virtual’ advertising rights in each region, Fifa struggled with a sales pitch less compelling than the previous National Supporter model, which brought in around $164m from six brands with host country-only rights around the 2013 Confederations Cup and the 2014 World Cup in Brazil.
Launched after Brazil 2014, the third-tier Regional Supporter programme allowed for a maximum of 20 brands to activate around the Confederations Cup and World Cup in five regions: Europe, North/Central America, South America, Africa/Middle East and Asia. A maximum of four positions could be sold per region.
Key to Fifa’s thinking, championed by then-marketing chief Thierry Weil, was that the same perimeter board advertising space allocated to one National Supporter could be allocated to Regional Supporters from five different regions with the introduction of DRT.
DRT allows logos and graphics to be represented virtually on advertising boards on different broadcast feeds. For rights-holders, it provides extra inventory and therefore revenue from a finite physical space.
But Fifa did not find a DRT solution in time for the tournament – suppliers were unable to demonstrate a solution the global governing body believed would be reliable on the LED perimeter displays it requires.
Although other rights included in the Regional Supporter package, such as interview backdrop and brand association rights, still had significant market value, experts believed the increased perimeter advertising inventory generated by DRT for each regional sponsor was important to unlocking the value of the package.
Fifa held talks with various suppliers to find a DRT solution but reached a cut-off point before the 2017 Confederations Cup. As the World Cup in Russia loomed, Fifa had no means to offload its unsold Regional Supporter inventory in a fire-sale or use it to upgrade other packages.
Fifa told SportBusiness in August 2016 that it would not sell discounted packages, irrespective of when they were sold, and that Regional Supporters could not add LED inventory that was unsold in their region to their packages. This is because all rights packages are pre-defined with a specific amount of perimeter advertising board minutes given to Fifa’s commercial affiliates according to their sponsorship level. In short, Fifa could not offer Regional Supporters more inventory because it would undermine the status of sponsors in the tiers above.
Fifa’s first sale of a Regional Supporter package – to Russia’s Alfa-Bank in July 2016 – gave hope that the programme would gain momentum. It is understood that the Europe-only deal was worth $12m over the term.
The banking sector deal in the European region was one of the most attractive of the regional deals on offer. Andrei Sokolov, the chair of Alfa-Bank’s executive board, told Russian press that two other banks had made bids for the rights.
As the Official European Bank of Russia 2018, Alfa-Bank acquired a standard package of rights including LED board exposure, identification on the backdrops at official press conferences, tickets and brand association rights.
It also got bespoke rights according to category, including exclusivity on rights to provide on-site ATMs at stadia, Fifa Fan Fests and commercial display areas in Russia, and rights to brand Alfa-Bank’s ATM retail banking services across Europe.
Alfa-Bank also got rights related to ticketing services in collaboration with Visa, Fifa’s exclusive Global Partner in payment services, with a view to enhancing services for the fans. The collaboration did not give Alfa-Bank the lucrative right to process ticket payments.
Fifa said at the time of the deal that it was in talks with companies across all five regions about the regional packages. But no further deals materialised in 2016.
In September 2016, Philippe Le Floc’h, a former marketing director at Uefa, replaced Weil as Fifa’s chief commercial officer.
Le Floc’h continued to engage Fifa’s in-house team on its top-tier Fifa Partner and second-tier World Cup Sponsor programmes but decided to outsource regional sales in more than one territory. It is thought the CAA Sports agency in the US had a ‘special status’ in pitching regional partnerships in the Americas, but Fifa’s most important agency relationship turned out to be in China.
Desports, a subsidiary of the Chinese sports and entertainment investment firm Wuhan DDMC Culture, signed an exclusive sales agency contract in Asia for the 2018 World Cup for the period from October 18, 2017 to May 31, 2018. It won the right to sell no more than four regional deals in Asia in different categories.
In February, the Chinese electric scooter brand Yadea signed with Deports as a Regional Supporter of the 2018 World Cup in Asia, a deal estimated to be worth between $8m and $12m.
Fifa added a second European Regional Partner – the Russian telco Rostelecom – in March, and two more – state-owned Russian Railways and diamond-mining group Alrosa – in April.
Finally, in the week of kick-off, two more regional deals were announced with Chinese brands – men’s clothing brand Diking and technology and entertainment company LUCI – plus a last-minute deal with the Egyptian government to promote the country to tourists and investors.
Sales for the Regional Supporter category for the 2022 World Cup in Qatar will begin once Russia has been delivered – as will the search for a DRT solution.
Swiss sports agency Infront, which has worked as Fifa’s LED advertising solutions agency over the last two World Cups, was awarded the LED board advertising contract for the next quadrennial in 2017.
The agency has an interest in finding a DRT solution for Fifa, either through joint-venture initiatives or partnership with a third-party supplier.
Infront itself tried to solve the DRT problem before Russia 2018 through a joint-venture with the Norwegian production company Vizrt, but without success. Infront also has the option of partnering with other LED overlay providers, including the only provider that has deployed DRT for top-level sports events: tech company Supponor.
In football, Supponor’s DRT technology has been used over the last five years to provide digital replacement on static perimeter advertising boards in Spain’s LaLiga, in tandem with the Mediapro agency, which holds broadcast rights to the Spanish league.
In 2016-17, LaLiga action was delivered via seven feeds featuring region-specific perimeter board advertising to broadcasters, including a domestic Spanish feed, a rest of Europe feed, plus feeds targeted at the Middle East and North Africa, South America, China, Asia and a ‘rest of world’ feed.
Supponor has also has been approved by the German Bundesliga and tested in the English Premier League, Serie A in Italy and by Uefa.
It’s latest LED-compatible technology – which could be suitable for a World Cup deployment – is currently being tested and refined at English Premier League club Watford.
Unlike the solution envisaged by Vizrt, Supponor DRT requires the installation of compatible LED boards with associated costs. This tends to suit tournaments or competitions where limited numbers of board sets need be installed but could be viable for the World Cup where the estimated $10m cost of installation across multiple venues would be offset by the sale of regional packages.
According to experts, buy-in from broadcasters is at least as important as buy-in from rights-holders if DRT is to succeed. In this respect, the signals from Fifa are that DRT could be more smoothly integrated in Qatar 2022. The Fifa 2.0 mission statement, published in October 2016, said that the governing body would be looking to centralise production, making deployment of DTR far more controllable for the rights-holder.