Thursday, 13 June 2024 Reading time : 2 minutes

One of the most successful sponsorship stories in the world of sport began in 1984. That October, Michael Jordan, then 21, made his debut in the US professional basketball league NBA, playing for the Chicago Bulls. Even before his first game, the dominant sports brands of the time, Converse and Adidas, were trying to sign the basketball player. But Nike won the race. Jordan signed a five-year contract worth $2.5 million, a sum well above the norm at the time. In April 1985, Nike launched the first "Air Jordan" trainers.

Today, Nike is one of the world's biggest sports sponsors, with its brand and products supporting a wide range of sports, from Europe's top football clubs to golf and college basketball in the US. The US sportswear company is also involved in the European men's football championship, which starts today in Munich, Germany, equipping nine teams.

But Nike is not the only company using the stadium as an advertising and image platform. Sports sponsorship is a popular marketing strategy for many leading companies, which is reflected in the growing market volume. According to data from the statistics platform Statista, the international sports sponsorship market was worth around USD 66 billion in 2022 and is expected to grow to almost USD 108 billion by 2030. 

The business is not without its pitfalls. Sponsorship activities promise a high level of fan exposure. For example, UEFA, the governing body of European football, is targeting a new record of 5 billion viewers for the four-week duration of Euro 2024. "Each of the 51 matches is bigger than a Super Bowl," explains UEFA marketing director Guy-Laurent Epstein. However, it remains extremely difficult for companies to measure the success of their sponsorship activities. In addition, they risk damaging their reputation in the event of a crisis. A prominent example of this is the doping case of US cyclist Lance Armstrong. After the US Anti-Doping Agency found him and his team guilty of doping in 2012, the athlete's sponsors withdrew within a few days. In recent years, the issue of sustainability has also gained importance in sport and is being discussed controversially, especially in connection with major events. 

While it is natural for Nike to position itself as a sports sponsor, the market seems to be attractive for a variety of industries. Sponsors come from the automotive and beverage industries, but financial, telecommunications and energy companies are also involved. In 2021, the sports media company SportsPro looked at which companies get the most out of their sports sponsorship activities. Among other things, the study analysed the reach of advertising activities in social media. Among the 50 companies analysed, sports equipment suppliers belong to the most successful: Nike is the top company, followed by Adidas in second place and Puma in sixth.

Investment idea
The Barrier Reverse Convertible on Nike, Adidas and Puma opens up an investment opportunity in the leading sportswear manufacturers just in time for the European Football Championship. 

Termsheet
Coupon: 13.00% p.a.
Barrier: 67%
Tenor: 1 year
Valor: 132914349

Indikative Angaben

 

Disclaimer

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