Analysis of the postponed European Championships

 

European Championships Factsheet

 
In the early days of the tournament, the Finals was made up only of four teams, until later expanded to eight in 1980, and again to 16 in 1996, before reaching its current 24 team format in 2016. 
 
When the competition has a single host, that nation receives automatic qualification to the Finals, with the 2020 edition the first not to do this, given the allocation of 12 host nations. Today the European Championships stands as the second most watched soccer tournament in the world, behind only the Fifa World Cup, with its 2012 Final attracting a global audience of 300 million. 2020 will serve as the 16th official tournament of the European Championships, with the previous competition seeing Portugal becoming the 10th different winner.
 
For 2020 Uefa announced that the total prize money for the competition would increase by 23 per cent, from the previous 2016 figure of $342 million. 
 
All nations that reach the finals regardless of success are guaranteed to receive $11.37 million. Each victory in the group stage will earn a national federation an extra $1.84 million, whilst a drawn tie will see that figure split between the sides ($922,000). The maximum money that can be won by the eventual champions stands at $41.81 million, a significant increase on the possible winnings in 2016, $31 million.
 
Total Prize Pot: $456 million
 
Decision to Postpone due to Covid-19
 
The breakout of Covid-19 across Europe has created the need for the Uefa European Championships scheduled to begin on 12th June 2020 in Rome, Italy, to be postponed with the provisional date of the new tournament now set for the summer of 2021. 
 
Due to the European Championships being split across multiple nations in a ‘festival of football’ to celebrate the 60 years of the tournament, a notion put forward by former Uefa president Michel Platini. 
 
While postponing the tournament is likely seen to be a worst case scenario for Uefa, the decision to spread the tournament across the tournament has likely mitigated the impact of postponement. With no one nation having to take on all the associated costs, the financial impact will likely be more contained than if a single host nation was liable. As seen from the postponement of the 2020 Olympic Games, for one country having built infrastructure to host an event the financial impact will be significant. In the case of the European Championships, bar the cost of refurnishing existing stadia, the impact will likely come further down in the ecosystem, with local businesses losing out and broadcasters having to find new content for their schedules which would have been built around the European Championships. 
 
For brands looking to advertise against programming from the Championships, the impact is likely to be more acute. While some marketing budgets will be diverted to summer 2021, with advertising and marketing campaigns rolling over to next summer, brands and sponsors are having to readjust to changing circumstances in real time. With most brands building up to the Championships across a four year period, with the expectation that they will be able to capitalise on these marketing plans in the later half of 2020 and early 2021, this new reality in the face of the Covid-19 pandemic means that all these plans will need to readjusted. 
 
For broadcasters, this is likely to mean difficult conversations with brands who have already bought advertising in the expectation of the tournament going ahead. For Uefa itself, it will now need to manage the impact of the postponing the tournament on all its partners. 
 
Impact of Postponement
 
British broadcaster ITV has already announced that the postponement of the competition until 2021, combined with the cancellation or halted production of a number of its popular shows has seen it cut its annual production budget by £100 million ($117 million). The broadcaster has also scrapped a dividend pay-out of £216 million ($252.9 million) due to the outbreak of the virus. Of the cut budget, the European Championships is expected to be the biggest cost saver, with an estimated £40 million ($47.5 million) attributed to the tournament.
 
In relation to sponsorship, the postponement is not likely to have too big an impact for these brands, with the delay offering sponsors a longer period of marketing opportunity. While the short term impact will be significant, with marketing budgets already set and brand activity focused around the tournament, the fees paid to partner with the tournament should roll over to 2021.  
 
Whilst a number of social and local businesses are being heavily affected by the current health crisis, the loss of the major European soccer competition this summer will also have a significant impact on local businesses such as pubs, bars and restaurants. Carlsberg research has previously shown that hosting live broadcasts of such events can contribute to a 60 per cent uplift in sales. Events such as major continental championships in the most popular sports represents a huge opportunity for pubs to capitalise on trade, with soccer tournaments reportedly worth more than £60 million ($80 million) in the UK alone.
 
Current Travel Restrictions
 
Further strain on the global economic situation comes from the number of cancellations that are expected to be made in areas such as travel and accommodation. Thomas Perrot, the mobility manager of UEFA, had previously stated that he expected more than 2 million passengers to board a flight over 4-week duration of the tournament. The idea here was that it offers airlines opportunities to launch new routes, and put on greater a frequency of flights. 
 
‘I can confirm that our rooms booked for EURO 2020 at the CPH Hotel in DGI City have been released by Booking.com last week’ – Kevin Helsingholf, commercial director of DGI City. ‘They had booked almost the entire hotel for UEFA – about 80 per cent of our capacity’.
 
Uefa has already announced that all supporters are set to be offered full refunds should they be unable to attended the revised tournament dates in 2021. Some supporters have also been told they can expect to receive refunds on pre-booked flights and hotels. However, most airlines and hotels remain under no obligation to pay back fans, unless government advice states they must do so.
 
Financial Impact of the European Championships
 
In breaking down the total revenue generated by Uefa in 2016, some €1.05 billion ($1.16 billion) came from TV rights; €480 million ($532 million) from sponsorship; and a further €400 million ($443 million) from ticketing and hospitality. These sums mean Uefa brought in €1.93 billion ($2.14 billion).
 
The estimated costs associated with the staging of the event came to €1.1 billion ($1.2 billion); making the total income earnt by Uefa, around €830 million ($920 million). These earnings, were then shared across the organisations 55 member associations for 2016-20, with €600 million ($665 million) shared and the rest held by Uefa.
 
According to Uefa research, the 2016 championships was watched by almost 5 billion viewers, with around 600 million tuning in for the events Final between Portugal and France. This figure then drops to 284.4 million when collecting numbers fixed against the ‘average in-home global audience. It has also been reported that the extra 20 matches which were played by way of the fact the competition featured eight additional teams, saw an additional 1.1 billion viewers to the competitions overall TV audience.
 
The new split nation Format
 
In 2012 Uefa announced its controversial plans to spread its 2020 competition across multiple cities, after rejecting bids from Georgia and Azerbaijan. The then Uefa President, Michael Platini argued that in the midst of the economic uncertainty the organisation did not want to strain a country which lacked the infrastructure. Whilst the decision to play the finals across 12 countries attracted criticism by some, it is not the first time the championships will feature across multiple borders; the 2000 championships was hosted by Belgium and the Netherlands which was then followed in 2008 by Austria and Switzerland acting as co-hosts. The structure for the competition should also help ease fears over long travel times between games, with host nations benefitting mostly from home fixtures.
 
Upon initial plans the competition was due to be held across thirteen different countries, before Uefa dropped Brussels from the line-up over delays to the construction of the Eurostadium. This subsequently saw these games relocated to London.
 
This new format allows for new countries to become involved with the competition without taking on the total cost of hosting the entire tournament. In 2020 there will be seven new host nations – Azerbaijan, Denmark, Hungary, Romania, Republic of Ireland, Russia and Scotland.
 
Issues of rescheduling 
 
Issues of rescheduling include less interest and hype, with greater levels of international sporting competition set to take place in 2021. 
 
Prior to the outbreak of the crisis, 2021 was already slated to play host to the African Cup of Nations (Jan-Feb) – which is already likely to affect the national domestic club competitions scheduling; the Women’s European Championships (7 July – 1 August) – for which England is playing host (the country responsible for the seven Men’s, including both semi finals and event Final; Copa America (11 June – 11 July) (an event which has also been postponed a year) – the exact same slated dates for the men’s European championships; men’s under-21s European Championships; Nations League competition (September 2020 – March 2022). 
 
The other issues around the hosting the competition next year are also compounded by other major sporting events, with the Wimbledon Championships (28 June-11 July) and the rescheduling of the Olympic Games (23 July-8 August).
 
Past Host Impact
 
 

The total revenue generated from the European Championships has grown substantially since 1992, with the most recent event some representing a growth of $2.06 billion growth in this 24 year period. The tournament has enjoyed consistent growth, and as such Uefa has put a target revenue of €2,500 million ($2,074 million) for its next championship, which would give the organisation a profit in excess of €1,000 million ($1,081 million).

A study undertaken by the Observatoire de l’Economie du Sport in liaison with the National Institute of Statistics and Economic Studies has illustrated the direct financial and economic impact France enjoyed in 2016 as hosts. In total the event generated €1.22 billion ($1.29 bn) of business; €596 million through Uefa and another €625.8 million ($693.4 million) through tourism. Of the figure relating to revenue from tourism, 35 per cent came from accommodation, 30 per cent from restaurants and catering; 20 per cent from shopping and tourist visitations; and a further 15 per cent on transport. The report states that the country saw an estimated 613,000 foreign fans travel over to French borders. The fans stayed in the country for an average eight days, with an average of €154 ($171) spend per day. The additional income over the four-weeks saw an estimated €75 million ($83.1 million) in additional net tax revenues for the national government.
 
All of these numbers make for an attractive return on investment for the country, with less than €200 million ($221 million) spent of public money – which included €160 million ($177 million) on stadium renovations and €24 million ($26.6 million) on enhancing security.
 
During 2016, Uefa setup a legacy project, for which it offered €2 million ($2.2 million) in investment to each of the ten host cities for soccer-related infrastructure. This money in particular was set aside to leave a lasting impact of the competition that could be felt in the years following its completion. Whilst many cities benefitted, Saint-Etienne was able to capitalise on the opportunity significantly, opening 18 new facilities. In this city, their initial €2 million was able to attract an additional €10 million ($11.1 million) investment in the area’s soccer infrastructure.
 
Across the ten host cities in France for Euro 2016, the collective regional economic boost totaled slightly over €1.3 billion ($1.4 billion). This financial impact shows that the European Championships saw Uefa’s profits almost double that which was earnt in 2012, with the event in Ukraine/Poland taking only $724 million by comparison. The majority of this income is occurred through fan stadium expenditure, for which €840.7 million ($931.6 million) was earned. The economic impact felt across the cities ranged between €66 million and €221 million ($245 million), with Toulouse enjoying the lowest financial benefit, and Saint-Denis enjoying the highest. Outside of visitors to the stadiums on match days, the cities also benefitted from local fan zones, the lowest in Lens (39,000) and highest in Paris (468,000).
 
Other significant areas that received a boost during Euro 2016 was employment, with the increase need to for a areas such as security demanding needing an additional 100,000 personnel. 
 
The overall attendance in 2016 saw 2,427,303 fans watch the action, with an average of 47,594 fans at each game played. 
 
Total costs surrounding the organisation of the event stood at $718 million; $333 million in team prize money; $168 million to clubs for releasing players. 
 

 
The 1.3 million fans which visited the fan zones is also worth noting, for gauging and assessing the potential impact that can be felt by tourists visiting the country/city without even necessarily having a match day ticket. The table above highlights how just how much the host cities stand to miss out on in 2020, without the championships taking place. The postponement of the event will also likely see areas such as state injection increase beyond the numbers associated with France in 2016, which will negatively impact the total profits attributed to the host cities and local governments.
 
Current Media Landscape
 
Uefa sells its media rights content through CAA Eleven which distributes the broadcasting rights on a market by market basis. The sales process starts with the opening of an invitation to tender to all qualified media distributors, who can then submit an offer for the rights in its primary territory. If the bids fail to meet a satisfactory figure, the bidding process is carried out again a few months later, as CAA Eleven looks to secure rights closer to the intrinsic valuation put on the territorial rights. In 2020, this was the case for the rights process in France, in which no broadcaster came close to matching Uefa’s $140.7 million valuation, with the rights only later picked up by the joint bid of TF1 and M6 in the free-to-air market and beIN Sports on pay-tv. 
 
In Europe, media rights tend to be sold on the free-to-air market, with all major soccer countries looking to offer content from the tournament to the masses. This said there are a number of examples from across the contentment in which the rights are shared between a free-to-air and pay-tv broadcaster. This format is also duplicated across a number of big countries outside of Europe, with the rights in the United States split across three broadcasters, whilst in Brazil and Sub-Saharan Africa, the rights are shared across one pay-tv and one free-to-air broadcasters.
 
At the competition in France 2016, revenue from media rights stood at $1.16 billion. That figure meant that media sales accounted for around 54.5 per cent of the competitions total revenue of $2.13 billion. The value of the broadcasting rights continues to grow at each competition, with its value continuously increasing as the competition remains one of the biggest sporting events of the year. In 2016 the competition was watched by 2 billion fans on TV, with a global audience of around 600 million reported for the Final.
 
Selected List of Broadcasters:
 
United Kingdom – BBC & ITV
 
Australia – Optus
 
Belgium – RTBF & VRT
 
Brazil – Globo.com
 
China – iQiyi 
 
Scandinavia – Nordic Entertainment Group 
 
France – beIN Sports & TFI & M6
 
Germany – ARD & ZDF
 
Indian Sub-Continent – Sony Pictures Networks
 
Japan – Wowow
 

USA – ESPN & ABC & Univision

Sponsorship Landscape

Official Partners:

Alipay ($28.75 million – 8 years)

Booking.com ($2.5 million – 4 years)

Fedex ($4 million – 4 years)

Heineken ($45 million )

Hisense ($5 million)

Socar ($5 million)

Takeaway.com ($4 million – 1 year)

Volkswagen ($1 million – 4 years)

Other UEFA Partners:

Coca-Cola ($35 million – 1 year)

Fanatics ($1 million)

Deals that were set to expire after the event in 2020: 

Heineken ($45 m)

Takeaway.com ($4m)

Coca-Cola ($35m)

Konami ($4m)

Official Licensees:

Hublot

Konami

Panini

Overall Estimated Sponsorship Value

$162.75 million

Current Sponsorship Landscape

Much like the sales process for its media rights, sponsorship packages are sold through a bidding process organised by CAA Eleven in which the highest bidder earns the rights, so long as it reaches close to Uefa’s own valuation of what they are worth. The process involves opening up category specific packages at one time, as in March 2019 the agency opened up the bidding for sponsorship within six categories in Banking, Insurance, Telecommunications, HR and Recruitment Services, Rail, and Airlines. 

The current format of the sponsorship portfolio sees partners split into three different sections – National Team Football Sponsor, Euro 2020 Official Sponsor and Official Licensee, away from rights to the organisations Champions League and Europa League. FedEx stands as the only brand to hold multiple rights across Uefa’s competitions, with the logistics brand acting as a named partner of European national teams and the Uefa Europa League. 

The sponsorship portfolio retains a very strong international presence despite the confines of the participating nations to Europe. The European Championships has seen an increased level of interest from Chinese sponsors in particular, which comes off the back of the tournaments huge popularity in Asia in 2016. It was reported that the previous event’s Final attracted some 56 million viewers, more than any other individual nation worldwide. 


At current, the competition has only eight direct official sponsors for 2020, with a further three licensing agreements. Other routes taken by brands to affiliate themselves with the competition comes by the way of individual national governing body sponsorship deals, which enables partners to tailor its commercial strategy to appeal more directly in its primary market.

The most recent tournament in France saw the competition generate $532 million in sponsorship income, which accounts for around a quarter of its total revenue ($2.13 billion). Sponsorship income at the competition accounts for around half that of media revenue, with the remaining $443 million coming through ticketing and hospitality. The total revenue generated represented a significant increase from 2012 ($1.54 billion), and Uefa are looking to once again boost these sales figures, targeting $2.5 billion in 2020.

Partner Analysis

The way in which Uefa signs sponsorship deals with brands with exclusive rights means the summer of 2020 will see no two sponsors involved in the same field. This means that there are twelve different sectors on display, highlighting the diverse spread of the competitions sponsorship portfolio.

The Netherlands stands as the most prominent brand sponsor location, with three brands based in its national borders; whilst China stands as the only other nation with multiple affiliated brands. A third of the sponsors involved at the 2020 European Championships hail from outside the continent in which the tournament is played in, highlighting the competitions appeal on a global scale. In particular the increased media interest in Asia, has helped build the Chinese interest in partnership with the tournament. Further to this, only 50% of the sponsors originate from countries that will be actually be competing in 2020.

Venues

Hampden Park, Glasgow, Scotland

 

Capacity: 51,866

Scheduled Matches:

Group A: Turkey vs Italy

Group D: Winner Playoff C vs Czech Republic

Group D: Croatia vs Czech Republic

Group D: Croatia vs Playoff Winner C

Round 16: Winner E vs 3rd A/B/C/D

With five games with a minimum ticket value of €50 ($55), the games in Scotland would generate a minimum sold out ticket sales of €12,966,500 ($14.2 million). If sold out, the games would also bring 259,330 fans to Glasgow.

Dublin Arena, Dublin, Ireland

 

Capacity: 50,000

Scheduled Matches:

Group E: Poland vs Playoff winner B

Group E: Sweden vs Playoff Winner B

Group E: Sweden vs Poland

Round 16: Winner D vs Runner-up F

With four games with a minimum ticket value of €50 ($55), the four games in the Republic of Ireland would generate a minimum sold out ticket sales of €10,000,000 ($11 million). If sold out, the games would also bring 200,000 fans to Dublin.

An impact study carried out by EY-DKM on behalf of the Dublin City Council had previously estimated the city could see an economic boost of €106 million to the city though hosting its four tournament games. The same study estimated that the city would see an additional 76,000-96,000 tourists visit the country over the weeks in which games were set to be played. These Dublin games were also expected to create 2,780 full time jobs, whilst the city has already benefitted from hosting the competitions qualifying draw in December 2018, generating €2 million for the national economy, with an estimated 600 visitors.

Wembley Stadium, London, England

 

Capacity: 90,000

Scheduled Matches:

Group C: England vs Croatia

Group C: England vs Playoff Winner C

Group D: Czech Republic vs England

2. Round 16: Winner A vs Runner-up C

1. Semi Final: Winner QF1 vs Winner QF2

2. Semi Final: Winner QF3 vs Winner QF4

Final: Winner SF1 vs Winner SF2

With four games with a minimum value of €50 ($55), another two with a minimum price of €85 ($93) and another game at €95 ($104), the games in London could bring in €41,850,000 (45.8 million) from ticket sales. With a sell out of all these games, the matches in London would bring in 630,000 fans.

A proposed fan zone in Greenwich Park, is a one of a number that was expected to be staged in London, for which organisers had predicated that 400,000 people would visit, including 213,800 from outside of the local area (newshopper). For Greenwich borough, this would be expected to translate into a £4.12 million ($4.9 million) boost to its economy, with the creation of 255 full time jobs throughout the tournament.

San Mamés Stadium, Bilbao, Spain

 

Capacity: 53,289

Scheduled Matches:

Group E: Spain vs Sweden

Group E: Spain vs Poland

Group E: Playoff Winner B vs Spain

4. Round 16: Winner B vs 3rd A/D/E/F

With four games with a minimum ticket value of €50 ($55), the games in Spain would generate a minimum sold out ticket sales of €10,657,800 ($11.7 million). If sold out, the games would also bring 213,156 fans to Bilbao.

Johan Cruyff Arena, Amsterdam, Netherlands

 

Capacity: 55,000

Scheduled Matches:

Group C: Netherlands vs Ukraine

Group C: Netherlands vs Austria

Group C: Playoff Winner D or A vs Netherlands

1. Round 16: Runner-up of A vs Runner-up of B

With four games with a minimum ticket value of €50 ($55), the games in the Netherlands would generate a minimum sold out ticket sales of €11,000,000 ($12 million). If sold out, the games would also bring 220,000 fans to Amsterdam.

Parken Stadium, Copenhagen, Denmark

 

Capacity: 38,065

Scheduled Matches:

Group B: Denmark vs Finland

Group B: Denmark vs Belgium

Group B: Russia vs Denmark

5. Round 16: Runner-up D vs Runner-up E

With four games with a minimum ticket value of €50 ($55), the games in Denmark would generate a minimum sold out ticket sales of €7,613,000 ($8.3 million). If sold out, the games would also bring 152,260 fans to Rome.

Saint Petersburg Stadium, Saint Petersburg, Russia

 

Capacity: 68,000

Scheduled Matches:

Group B: Belgium vs Russia

Group B: Finland vs Russia

Group B: Finland vs Belgium

Quarter Final: Winner 6 vs Winner 5

With three games with a minimum ticket value of €50 ($55) and another game at a price of €75 ($83), the four games in Russia would generate a minimum sold out ticket sales of €15,300,000 ($16.8 million). If sold out, the games would also bring 272,000 fans to Rome.

Puskás Aréna, Budapest, Hungary

 

Capacity: 65,000

Scheduled Matches:

Group F: Winner Playoff A vs Portugal

Group F: Playoff Winner A or D vs France

Group F: Portugal vs France

3. Round 16: Winner C vs 3rd D/E/F

With four games with a minimum ticket value of €30 ($33), the three games in Hungary would generate a minimum sold out ticket sales of €7,800,000 ($8.5 million). If sold out, the games would also bring 260,000 fans to Budapest.

National Arena, Bucharest, Romania

 

Capacity: 55,000

Scheduled Matches:

Group C: Austria vs Playoff Winner D or A

Group C: Ukraine vs Playoff Winner D or A

Group C: Ukraine vs Austria

Round 16: Winner F vs 3rd A/B/C

With four games with a minimum ticket value of €30 ($33), the games in Romania would generate a minimum sold out ticket sales of €6,600,000 ($7.2 million). If sold out, the games would also bring 220,000 fans to Rome.

Baku Olympic Stadium, Baku, Azerbaijan

 

Capacity: 68,700

Scheduled Matches:

Group A: Wales vs Switzerland

Group A: Turkey vs Wales

Group A: Switzerland vs Turkey

3. Quarter Final: Winner 1 vs Winner 3

The four games in Azerbaijan, if sold out, would see 274,800 fans visit Baku. With ticket prices starting at €30 ($33), the four games in the country would bring in a minimum of €8,244,000 ($9 million)

Stadio Olimpico, Rome, Italy

 

Capacity: 72,698

Scheduled Matches:

Group A: Italy vs Switzerland

Group A: Italy vs Wales

4. Quarter Final: Winner 8 vs Winner 7

With two games with a minimum ticket value of €75 ($82) and another game at a price of €50 ($55), the three games in Italy would generate a minimum sold out ticket sales of €14,539,600 ($15.9 million). If sold out, the games would also bring 218,094 fans to Rome.

Allianz Arena, Munich, Germany

 

Capacity: 75,000

Scheduled Matches:

Group F: France vs Germany

Group F: Portugal vs Germany

Group F: Germany vs Playoff Winner A or D

2. Quarter Final: Winner 4 vs Winner 2

Hosting four games, three priced at a lowest value €50 ($55)and the other at €75 ($82), the game held in Germany would generate €16,875,000 ($18.5 million) in ticket sales, and if sold out bring 300,000 fans to Munich. 

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