EURO 2024: How does money turn over at the European Championship?

What excitement Germany itself was in when that news was announced! For more than 70 years, the German national team ran on the field in Adidas jerseys, and then the German Football Association (DFB) announced on March 22 this year that the national team players will wear equipment with the logo of the American company Nike from 2027. The contract was signed for seven years. That deal should bring the DFB at least twice as much money as the partnership with Adidas, as reported in Germany.

With the innovation of football boots, which were worn for the first time at the 1954 World Cup, Adidas significantly contributed to the triumph of the German team at that tournament in Switzerland. That novelty then provided the Germans with an advantage over the favored Hungarians. Namely, 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 decision of the DFB, there was a misunderstanding of the move in business circles, and the DFB was criticized even by members of the German federal government. Health Minister Karl Lauterbach (SPD), for example, wrote on the X platform: "I consider it a wrong decision, commercialization destroys tradition and a piece of the homeland."

And Economy Minister Robert Habek (Greens) complained like this: "Adidas and the black-red-gold combination 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

Just a few weeks later, a new shock followed for the traditionalists. The Chinese car manufacturer BYD will be one of the main sponsors of the European Championship for football players, which will be played in Germany. The Chinese will make available a larger fleet of their electric vehicles. BYD, not Mercedes or Volkswagen! It's actually not a sensation: back during the World Championship in 2006 (also in Germany), the sponsor of the tournament was the Korean concern Hyundai.

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

They sent us a very short list of five business partners: Adidas provides "soccer balls and equipment for volunteers and associates", Atos is in charge of IT during the tournament, and BYD provides a "fleet of electric cars". And there are more about Coca Cola ("saves fans, volunteers and officials from dehydration"), as well as Deutsche Ban (German Railways will offer tickets during the tournament under special conditions).

A study by the University of Hohenheim, which was published in June and was conducted under the direction of Professor Markus Fett, came to the conclusion that Adidas is the most famous sponsor: about 56 percent of Germans know that this sports equipment manufacturer supports EURO 2024. But, "far behind Adidas are companies such as Betano and Athos, both with a degree of familiarity of about three percent. Although they are the official sponsors of the European Championship in Germany, only a few Germans know about them."

Advantage for China

In order to find out a little more about the method of selecting sponsors, we talked to Professor Henning Fepel. That economist and director of the Center for European Policy, does not have much understanding for the demands that German companies sponsor a "domestic" tournament. He told DW: "Consumer markets are mostly global markets, and football is a global thing, especially when it comes to such an important event as 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: "Apart from global sponsors, there are also national sponsors. With the help of such differentiation, UEFA can maximize its income from sponsors" - and at the same time take care of national feelings, adds Fepel.

And how do the organizers make decisions about sponsors? Or against some other sponsors? "UEFA basically decides on the basis of two criteria", adds Fepel: "Who offers the most and who is strategically interesting", And therefore, as he notes, no one should be surprised that five global sponsors arrive from China: "They are the most interested , and that's why they are ready to pay the most for such sponsorship engagement."

Money is not talked about

Why are the actors in the process reluctant to talk about the details? One explanation is that too much money talk could threaten the very foundations of the business model of football officials. Sports associations are often organized as non-profit organizations and therefore pay relatively little tax. At large tournaments, such as this one in Germany, they often manage to make sure that they don't have to pay tax on the tournament income at all in the country that organizes the tournament.

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

Marketing expert Peter Rolman for the German public broadcaster WDR explained the high prices of fan props this way: "Emotionality pushes the rationality of prices into the background. Clubs and companies that cooperate with them know this. They demand as much money for these products as the fan is willing to pay in the end." But, Rolman believes that the ultimate limit has been reached, that things must no longer become more expensive: "They don't really want to overdo it, because they know that slowly reached the border."

Is sponsorship worth it?

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

Markus Fet analyzed the data collected in an online survey in which 1.000 people participated. His conclusion is: "Direct effects on purchase decision-making are thus not achieved or hardly achieved." Only about twelve percent of those surveyed, when purchasing products or services, specifically pay attention to those brands that sponsor the European Football Championship."