English tears may be flowing, but so is the money
England coach Gareth Southgate among the Euro2020 sponsors
Gareth Southgate may have seen painful memories of his penalty miss in Euro 96 come back to haunt him on Sunday night, but at least his employer will be counting the cash after England reached this year’s final.
Defeat to Italy at Euro 2020 in another shoot-out cost the England coach’s team the ultimate prize, but the team’s progress has earned the English FA £21.4m (€25m) which would have been topped up by another £2.5m had they won.
While the money will benefit the game across England, the NHS will also benefit from the players’ reported intention to donate their fees to various charities.
As ever, corporate backers were both major benefactors and beneficiaries.
The England team’s respectable 4th place in the 2018 World Cup delivered a 10% boost to sponsorship income between the two tournaments, to €77 million, whereas Italy’s failure to qualify for that tournament contributed to a 5% fall in sponsorship income.
Italy’s victory in Euro 2020 will see a sharp turnaround in its financial fortunes and could deliver an additional €13 million in sponsorship income, taking the total to €59 million, according to data produced by Brand Finance.
England’s strong performance will see its total sponsorship income rise to total to a record €95 million for the world cup in Qatar 2022.
The biggest individual sponsor is the kit manufacturer. Italy signed an eight-year kit manufacture contract with Puma in 2015 worth €22 million per year until 2023. Winning the Euro could result in Puma getting a significant return on this investment.
The impact of football success on the wider economy is debatable but Brand Finance estimates that Italy’s win will benefit Italian GDP by €4 billion in the short-term.
A bounce in consumer confidence and spending has been predicted, spurred by the timing of the tournament, which occurs after a long period of lockdown and reduced opportunities to socialise.
Despair for England fans
Subsequently, high spirits following Italy’s victory could lead to an increase in spending, particularly on food and drink, alcohol and tobacco, household goods and services, transport, recreation, culture, and hospitality.
Massimo Pizzo, managing director of Brand Finance Italy, commented: “Italy’s victory will certainly mark a significant moment for the nation, particularly following the difficulties faced over the last year and a half during the pandemic, with Italy being especially hard hit. This moment has undoubtedly revived the nation’s spirits, therefore restoring consumer confidence and spending.”
Occurring at a time when audiences are extremely tuned in and more desperate than ever for opportunities to celebrate, Italy’s win is also set to further build global sentiment about its nation, culture, heritage, people, values, and sports leadership, therefore boosting perceptions of the nation.
Lorenzo Coruzzi, associate at Brand Finance, commented: “While Italy’s success at the Euro 2020 marks a big victory for the team and wider nation, it marks an even bigger victory for Puma, as kit manufacturers see a significant return on investment following a win of this nature. With Italy as the biggest property that Puma has at the competition, the brand has certainly reaped the rewards from this historic moment”.
England signed a new deal with Nike starting at the 2018 World Cup: a £400 million, 12-year contract. This delivers £33 million per year, but this could now be seen as limiting the potential sponsorship upside for a team that has performed admirably in getting to the final as this value is already behind contracts for France (Nike, £44 million annual value) and Germany (Adidas, £44 million annual value) and is not up for renewal until 2030.
Nike could be seen as the winner here, holding a property that is now likely worth at least £11 million more than they are agreed to be paying until 2030, based on England’s closest competitors.
Players, and their core team such as agents and managers are set to benefit in various ways as a result of winning the Euros. All players in the Italian squad will undoubtedly have higher price tags placed on any future transfers to another club in any future transfer windows.
To illustrate the potential increase in player market values, the French squad at the end of 2017 had a total value of £817 million. By the end of 2018, after they had lifted the World Cup, the squad value had increased 54% to £1.267 billion.
England’s defeat to Italy in the Euro 2020 final was the third most-watched TV event in history.
Overnight figures revealed there was a combined BBC and ITV/STV peak audience of 31.1 million viewers across the channels, with an average of 21.8 million and overall share of 82% of all TV viewing.
It was only beaten by the 1966 World Cup final at 32.3m and Princess Diana’s funeral in September 1997 which was watched by 32.1m.
The total audience for the final could rise once those streaming the game online on BBC iPlayer or ITV Hub are included.
BBC One attracted a peak of 25m, while ITV1 had a 6.1m peak.