JOHANNESBURG (TheStreet) -- The 2010 World Cup's best competition may not be on the soccer field, but between the companies whose brand logos line it and off-field rivals hoping to grab their own bit of the glory.
The World Cup's six partner sponsors --
-- have paid $25 million to $45 million apiece for exclusive rights to the event that begins June 11 in South Africa, according to sponsorship consulting group IEG. That's a lot of money to pay for the opportunity to be ambushed.
Adidas alone parted with $351 million in 2005 to extend its World Cup exclusivity rights through 2014, including the right to manufacture the ball used in the event. Despite this, Adidas' competitors at
struck first by leading into the
with its face-melting but purposefully vague "Write the Future" ad directed by "Amores Perros" director Alejandro Gonzalez Inarritu, featuring appearances by Gael Garcia Bernal, Roger Federer and Kobe Bryant and exploiting existing endorsement deals with Portugal's Cristiano Ronaldo, England's Wayne Rooney, Italy's Fabia Cannavaro, Spain's Cesc Fabregas and U.S. players Landon Donovan and Tim Howard, among others.
"There is a very specific legal line you do not want to cross in terms of using the trademarks or logos that belong to
soccer governing body FIFA or the local organizing committee," says Jim Andrews, IEG's senior vice president and editorial director. "That still leaves a very large opportunity to connect a brand or a company to what the lawyers would call the 'intellectual space' around soccer."
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This creates a dilemma for World Cup boosters like Coca-Cola, which has been an event sponsor since 1950, a partner since 1978 and paid more than $400 million in 2005 to extend its partnership with FIFA through 2012. Coca-Cola's deal also included an extensive
commercial campaign and a tour of the World Cup trophy through 94 cities in 84 countries that began late last year before reaching South Africa last month. By the end of that tour, however,
featuring endorsement partners including Argentina's Lionel Messi, France's Thierry Henry, Ivory Coast's Didier Drogba and Brazil's Kaka playing against locals in South Africa.
In the U.S., Pepsi recruited
team members Clint Dempsey, Stuart Holden and Tim Howard for a charity-based publicity campaign timed to the World Cup's leadup.
This arrangement works out well for the World Cup's broadcasting partners at Univision (which paid $155 million for broadcast rights) and
ESPN and ABC (which paid $100 million for rights in 2010 and 2014). According to TNS Media Intelligence, U.S. advertising revenue for the World Cup rose from little more than $101 million in 2002 to upwards of $243 million in 2006. It also works for FIFA, which IEG says netted a $140 million revenue bump by implementing tiered rights agreements after the 2002 World Cup and, according to a market report by Sportcal, is expected to bring in $3.4 billion from its various rights agreements. The benefits of World Cup exclusivity to the partners, however, are subjective.
"Does the status of official sponsor and the ability to run promotions and do other things where they have access to tickets, merchandise, marks, logos and touring the World Cup trophy around the world make it worthwhile?" Andrews says. "Those six companies, and the eight companies in the second tier, say yes."
Though it's admittedly difficult to isolate sales attributed to World Cup marketing, that doesn't preclude partners from pointing to revenue increases as proof positive of their investment's inherent value. After Adidas' 2006
marketing blitz, the company cited demand for balls and shoes tied to the tournament for a 24% revenue increase in the quarter when the event took place. Adidas has already predicted a "low- to mid-single-digit" growth in revenue this year based on World Cup-related sales.
Coca-Cola, meanwhile, watched its global revenue jump 14% during the 2006 World Cup based on sales in Europe and Latin American countries during the event. With an enormous African market at stake in 2010 and with FIFA noting that people in 214 watched the 2006 World Cup on 376 channels, Coca-Cola CEO Muhtar Kent made his company's end of the bargain abundantly clear during its fourth-quarter earnings call.
"Given that the 2010 World Cup will be held on the African continent for the very first time, we're likely to see a global television audience of well over 1 billion viewers for the final match alone," he said. "In other words, 10 times the size of the Super Bowl."
That World Cup audience could be either a blessing or a curse for
, which signed on as both a sponsor and third-tier "national supporter" in 2008. Its oil-gushing disaster in the Gulf of Mexico and general incompetence in handling said crisis have been a drag on the brand and could weigh on both Castrol and BP Africa -- which will represent
at the World Cup. A crisis-management veteran who advised
during the Firestone tire failure controversy and
during its Vioxx litigation says BP can't ignore the oil spill if it wants a chance to defend its reputation on the world stage.
"You've got to acknowledge it and that could be an opportunity," says Kent Jarrell, senior vice president and director of litigation communications for Washington consulting and crisis-management firm APCO Worldwide. "I'd have conversations with FIFA because what you don't want to do is embarrass them and, forget BP's problems, it's a whole separate reputation issue for South Africa and Africa itself."
, which was a World Cup sponsor since 1990 and a partner in 2006, so prized its exclusivity for ticket purchases and at venues that it successfully sued FIFA after the body named Visa its 2010 credit partner. MasterCard and FIFA settled the dispute in 2007 for $90 million, which bit into the $200 million Visa reportedly paid for partnership rights through 2014.
The best pitches, however, don't always come from the biggest competitors.
Yingli Green Energy
, a leading Chinese producer of solar panels, scored one of the tournament's "tier-one" sponsorships (a rung below a partnership) alongside
Considering that a World Cup sponsorship costs roughly as much as Yingli's profit last quarter (just over $100 million) before a company even begins advertising, China's first World Cup sponsor and Brazilian food manufacturer Seara and South African mobile provider MTN are making a gamble Andrews equates to "blowing your advertising budget on a Super Bowl spot." The payoff in both global exposure and potential benefit, however, could make them bigger winners than any on-field underdog.
"In comparison to almost every other sports property except the Olympic Games -- and you can probably boil that down to the Summer Games -- if you're a company that's looking for a truly global platform, you're not going to get that with cricket or the NFL," Andrews says. "The fact that the World Cup penetrates as many countries as it does and has the interest level it does is something a sponsor can get a lot out of."
-- Reported by Jason Notte in Boston.
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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.