1. Welcome to the 2012
European Athletics
CEO Conference

2. Financing Sports
Professor Dr. Helmut Digel
Universität Tübingen
Presented: 20 April, 2012

4. Overview
1. Looking back
2. Today′s reality
3. Financing systems in the world of sport
4. Summary of financing possibilities
5. Economic logic – an outlook

5. Financing Sports
1. LOOKING BACK

6. 1. Looking back
• Self-financing athletics
– Non-governmental
– Voluntary association
– Club regulations
– Membership fees
• Non-commercial athletics
• Amateur athletics
• Athletics – school sport # 1

7. Financing Sports
2. TODAY′S REALITY

8. 2. Today′s reality
• Athletics – a semi-professional sport
• Code of athletics: have // have not
winning // losing
• Athletics – an economic enterprise
• Athletics – a part of the entertainment industry
• Competition between all sports  “survival of
the fittest”
• Decreasing relevance in public schools

9. 2. Today′s reality
• Federations are losing members (30%)
• Revenues from membership fees are
decreasing (31%)
• Only 12 out of 50 federations sell TV
broadcasting rights
• 9 federations have no marketing income
• 16 federations are depending on government
grants of more than 70% of their budget
• Only 18 out of 50 federations organise fund-
raising events

10. 2. Today′s reality - Questionnaire

11. 2. Today′s reality
TOP 10 – Government support (in US $)
1) Great Britain 10.0 Mio.
2) Spain 9.07 Mio.
3) Greece 8.22 Mio.
4) Poland 6.46 Mio.
5) France 5.73 Mio.
6) Germany 5.65 Mio.
7) Turkey 5.15 Mio.
8) Romania 3.70 Mio.
9) Ukraine 3.68 Mio.
10) Russia 3.45 Mio.

12. 2. Today′s reality
TOP 10 – Total budget (in US $)
1) France 29.162 Mio.
2) Italy 24.716 Mio.
3) Spain 18.590 Mio.
4) Great Britain 16.736 Mio.
5) Germany 11.525 Mio.
6) Finland 10.660 Mio.
7) Turkey 9.731 Mio.
8) Netherlands 8.633 Mio.
9) Norway 7.075 Mio.
10) Greece 6.457 Mio.

13. 2. Today′s reality
TOP 10 – Marketing (in US $)
1) Great Britain 9.103 Mio.
2) Germany 5.200 Mio.
3) France 4.064 Mio.
4) Norway 3.213 Mio.
5) Sweden 2.656 Mio.
6) Russia 2.530 Mio.
7) Finland 2.340 Mio.
8) Spain 2.216 Mio.
9) Czech Republic 1.335 Mio.
10) Switzerland 1.250 Mio.

14. 2. Today′s reality
TOP 10 – TV sales 2011 (in US $)
1) Great Britain 2.177.215
2) Italy 1.049.397
3) Monaco 570.594
4) Finland 500.000
5) France 466.360
6) Russia 70.000
7) Spain 62.205
8) Netherlands 42.600
9) Norway 35.100
10) Sweden 32.656

15. 2. Today′s reality
TOP 10 – Membership (in US $)
1) France 7.006 Mio
2) Italy 5.426 Mio
3) Netherlands 3.966 Mio
4) Spain 1.608 Mio
5) Ireland 1.193 Mio
6) Switzerland 1.130 Mio
7) Finland .585 Mio
8) Sweden .510 Mio
9) Greece .426 Mio
10) Germany .300 Mio

16. Financing Sports
3. FINANCING SYSTEMS IN
THE WORLD OF SPORT

17. Financing systems in the world of sport
GLOBAL LEVEL

18. IOC Income 2008 – 2012
Broadcasting Rights $ 2,570 Mio 46%
TOP Sponsorships $ 866 Mio 16%
Domestic
$ 1,555 Mio 28%
Sponsorships
Ticket Sales $ 274 Mio 5%
Licensing $ 185 Mio 5%
IOC TOTAL $ 5,450 Mio 100%
Source: Olympic Marketing Fact File 2010 Edition

19. FIFA Income 2008 - 2012
Event-related revenue $ 3,890 Mio 93%
TV broadcasting rights $ 2,448 Mio 63%
Marketing rights $ 1,097 Mio 26%
Hospitality rights $ 120 Mio 3%
Licensing rights $ 71 Mio 2%
Other $ 154 Mio 4%
Other operating income $ 172 Mio 4%
Brand Licensing $ 37 Mio 1%
Quality Concept $ 33 Mio 1%
Penalties/appeals/match levies $ 14 Mio *)
Other (rental income, film sales) $ 88 Mio 2%
Financial income $ 127 Mio 3%
Interest $ 51 Mio 1%
Foreign currency gains $ 64 Mio 1,5%
Income from financial assets $ 12 Mio *)
FIFA TOTAL INCOME $ 4,198 Mio 100%
*) share in FIFA TOTAL INCOME below 1 % Source: FIFA Financial Report 2010

20. IAAF Income 2010
Television rights income $ 27,172,403 61%
Royalties IAAF BV $ 7,000,000 16%
IEC (Europe) $ 20,000,000 45%
TWI ATHLETIX $ 172,403 *)
Sponsorship income $ 15,250,000 34%
Samsung Diamond League Title Sponsorship $ 2,500,000 6%
DENTSU Contract $ 11,000,000 25%
Continental Program $ 1,750,000 4%
Financial income $ 706,003 2%
Other income $ 225,826 1%
Other income from activities $ 880,024 2%
Sale of publications & videos $ 54,888 *)
IAAF permit fees $ 9,850 *)
Affiliation fees $ 42,600 *)
IOC contribution for RDC $ 182,500 0,5%
Airlines travel refund $ 2,293 *)
Identity card $ 63,500 *)
IAAF certification system $ 524,393 1%
IAAF TOTAL INCOME $ 44,234,255 100%
*) share in IAAF TOTAL INCOME below 1 % Source: IAAF 2010

21. Financing systems in the world of sport
NATIONAL LEVEL

22. DOSB Income 2010
Membership fees € 4,429,948 10%
Financial support € 9,776,244 23%
Government subsidies € 6,889,541 16%
IOC € 444,174 1%
Other (for DSJ) € 2,442,529 6%
Marketing € 10,158,986 24%
Olympic Marketing € 9,702,231 23%
Other Marketing € 456,755 1%
Lottery income from “Glücksspirale” € 6,367,920 15%
Other income € 2,456,465 6%
Interest € 30,495 *)
Rental income € 497,570 1%
Other € 1,928,400 5%
Earmarked funds (for specific projects) € 9,374,371 22%
Trainerakademie, Führungsakademie, Integration
durch Sport, DSJ, Dt. Bundesstiftung Umwelt
DOSB TOTAL INCOME € 42,563,934 100%
*) share in DOSB TOTAL INCOME below 1 % Source: DOSB 2011

23. DLV Budget 2011
Sponsoring Income € 2,225,000 63%
Membership fees (DOSB fees included) € 245,000 7%
Financial support € 40,000 1%
European Athletics € 15,000 *)
LSB Rheinland-Pfalz € 5,000 *)
Department for Foreign Affairs € 20,000 *)
Licensing € 105,000 3%
Manager Licenses € 11,000 *)
Other income € 98,900 3%
Interest € 1,000 *)
Rental income € 26,400 *)
Badges € 60,000 2%
Fines/Anti-Doping income € 5,000 *)
Other € 7,500 *)
Income from events € 794,000 23%
DLV TOTAL BUDGET € 3,518,900 100%
Source: DLV, 2011
*) share in DLV TOTAL INCOME below 1 %

24. Financing systems in the world of sport
REGIONAL LEVEL

25. WLSB Income 2010
Financial support (state government) € 23,315,114 54%
Trainers € 6,726,582 16%
Construction of sports facilities € 6,109,917 14%
School & club cooperation € 685,700 1%
Social services € 1,575,000 4%
Education € 3,930,028 9%
Disabled sports € 143,629 *)
Institutional aid WLSB € 1,604,495 4%
Institutional aid member associations € 1,566,509 4%
Glücksspirale € 599,859 1%
Landesjugendplan € 373,395 1%
Revenues Sport School Albstadt € 3,323,704 8%
Membership fees € 10,358,268 24%
Other income € 2,864,334 7%
Reserves € 2,954,686 7%
WLSB TOTAL € 42,816,106 100%
Source: WLSB 2010

26. WLV Income 2011
Financial support + Lottery “Glücksspirale” € 450,832 25%
Events € 1,030,181 58%
Fun Runs € 835,258 47%
Corporate Runs € 155,448 9%
Event licenses € 2,001 *)
Registration fees regional championships € 37,474 2%
Education and training – participation fees € 53,455 3%
(High performance sport and sport for all)
Publications € 79,970 4%
(WLV vor Ort, WLV Yearbook, Running Calendar
Baden-Württemberg, Brochures & books)
Starting passes / badges € 34,896 2%
Starting passes € 19,455
Running and Walking passes and badges € 3,945
Multisport badges € 10,164
Other income € 140,697 8%
(Licenses, other Marketing, donations)
WLV TOTAL INCOME € 1,790,031 100%
*) share in WLV TOTAL INCOME below 1 % Source: WLV, 2011

27. WFV Income 2009
Administration € 1,763,759 21%
Game operations € 921,169 11%
(league participation fees, administrative charge,
additional fee for clubs – 1/3 each)
Justice € 1,089,093 13%
(Penalties, procedural costs, fines for missing
referees)
Youth Sport € 516,523 6%
(Youth camps, administrative charge , financial
support DFB)
Other income € 2,203,652 27%
(grants, bfv/wfv magazine, reserves, surplus from
categories above)
Business operation € 564,641 7%
(Sponsoring: € 428,708,
rental income, GmbH revenues, advertisements)
Sports hall Wangen € 1,269,135 15%
(utilization fees, grants)
WFV TOTAL INCOME € 8,327,972 100%
*) share in WFV TOTAL INCOME below 1 % Source: WFV, 2011

28. Financing systems in the world of sports
LOCAL (CLUB) LEVEL –
EXAMPLES

29. Example 1 – Budget
TV Wattenscheid 01 LA e.V. 2011/2012
Main Sponsor (Energy) 45%
Financial support 32%
Support State of NRW, LSB, LV 17%
Support City of Bochum 10%
Grants DLV 5%
Revenues Half Marathon 11%
Equipment supplier 10%
Membership fees 2%
TV Wattenscheid TOTAL > € 1,000,000 100%

30. Example 2 –
Budget LAV Tübingen 2011
Booster Club € 60,000 60%
Membership fees € 40,000 40%
Events (Tübingen City Run)
Sponsors
Donations
Member clubs € 20,000 20%
Title sponsor ASICS (until 2011) € 10,000 10%
Financial support
10%
(City, State, LSB, LV)
LAV Tübingen TOTAL € 100,000 100%

31. Financing systems in the world of sport
SPONSORSHIP EXAMPLES

32. Sponsorship examples
Sale of rights
• Competition support • Car exhibition
• Podium medal ceremony • Start and finish
• Promotional announcement • Athlete′s apparel
during event • Official′s apparel
• Big screens • Photographer′s apparel
• Scoreboard • Technical personnel apparel
• Bags • Competition equipment (Paul
• Track surface vault and high jump mat,
• Flower lanyards hurdles, electrical equipment)
• Mobile cameras • Drinking stations
• Umbrellas • Canopy
• Perimeter boards (rotating, • Product placement
digital, virtual boards)
• Bibs
• Camera carpet

33. Examples
Perimeter boards

34. Examples
Jerseys

35. Examples
Graphics

36. Examples
Tattoos

37. Examples
Camera carpets
&
Virtual boards

38. Examples
Websites/Internet

39. Example SEIKO

40. Example SEIKO

41. Example SEIKO

42. Example SEIKO

43. Financing Sports
4. SUMMARY OF FINANCING
POSSIBILITIES

44. 4. Summary of financing possibilities
Sources of revenue for sports organisations
• Financial support / grants • Sale of publications & video
• Government
• National/international/regional • Merchandising
federations
• Ticket sales
• Sale of broadcasting rights
• Membership fees
• Sale of marketing rights
• Registration fees
• Sale of licensing rights
• Lottery / Betting
• Sale of hospitality rights
• Sale of equipment supplier
rights

45. 4. Summary of financing possibilities
Sources of revenue for sports organisations
• Donations • Educational programs
• Financial income • Education training programs
• Asset management
• Interest • Further training
• Rental income • Transfer revenue
• Deposits and borrowed funds • Penalties / appeals / fines
• Financial support / grants • Certification system
• Government
• National/international/regional • Etc.
federations
• Manager licenses
• Income from events

46. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Membership fees
Ref: SV 1899 Vieselbach e.V.

47. 4. Summary of financing possibilities
Sources of revenue for sports organisations
New membership possibilities
Ref: SV 1899 Vieselbach e.V.

48. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Ticket sales

49. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Television rights

50. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Sponsorship rights

51. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Hospitality

52. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Merchandising

53. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Naming rights
(venue; e.g. right to bear name, right of access,
right of use)

54. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Donations
• donations are tax-deductable
• possible forms of donation
 financial
 material
 services
• donors receive a donation receipt

55. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Grants & Subventions
1. material
2. financial
• National / international Federations
• Federal government
• State government
• City

56. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Asset management  Interest

57. 4. Summary of financing possibilities
Sources of revenue for sports organisations
Deposits and borrowed funds
• Bond issues
• Loans
• Credit

58. Financing Sports
5. ECONOMIC LOGIC –
AN OUTLOOK

59. 5. Economic logic – an outlook
The cycle of supply and demand
Costs
Supply Demand
Costs

60. 5. Economic logic – an outlook
The economic cycle of TV systems
Audience
Securing/ Securing/
Increasing Increasing
Programs Market share
Guarantees
Structuring
Procurement market Advertising revenues
Competitiveness

61. 5. Economic logic – an outlook
Marketing Relationships
Sport
Consumer
Businesses
Media
Ref: WALLISER, B.: Sponsoring. Bedeutung, Wirkung und
Kontrollmöglichkeiten. Wiesbaden 1995, 75.

62. 5. Economic logic – an outlook
Marketing instruments (4 Ps)
Product Pricing Promotion Placement
Corporate Identity Policy
Media Advertisement
Sales Promotion
Direct Marketing
Public Relations
Event Marketing
Sponsorship

63. 5. Economic logic – an outlook
Sponsors′ goals
Psychological goals: degree of popularity
image
sympathy
Economic goals: volume
turnover
gains
Ref: WALLISER, B.: Sponsoring. Bedeutung, Wirkung
und Kontrollmöglichkeiten. Wiesbaden 1995, 80.

64. 5. Economic logic – an outlook
The AIDA model – 3 effects of sponsorship
Attract Attention on the
sponsoring product
Arouse Interest and Desire
respectively for the product
Induce to a purchase Action
Ref.: Walliser, B.: Sponsoring. Bedeutung, Wirkung und
Kontrollmöglichkeiten. Wiesbanden 1995, 80;
Ref.: Das Werbewirkungsmodell AIDA (ROGGE 1990, 50)

65. 5. Economic logic – an outlook
Marketing options – Sports sponsoring from a
business point of view
Research &
Development Production Marketing(goals) Finances Human resources
Product Price Promotion (goals) Place
Direct Advertisement Sponsoring (goals) PR Sales Promotion
Communication
Sports Cultural Social Environmental Programme
Sponsoring Sponsoring Sponsoring Sponsoring Sponsoring
Athletics Formula 1 Football
Competitive
Sport Amateur Sport Age group
Events
Individual athletes Teams Clubs/associations

66. 5. Economic logic – an outlook
Preference for sports
Country Athletics First place Second place
GER 3rd place Football Formula 1
ITA 7th place Football Formula 1
UK 4th place Football Rugby
USA 14th place American Football Basketball
JPN 8th place Baseball Football
RSA 5th place Football Rugby

67. 5. Economic logic – an outlook
Decisional dimension of sport sponsoring engagement
Organisational level Sport
Sport Ice hockey
organisations Luge
Horse riding
Sport
Biathlon
federations
Judo
Sport clubs Ice skating
Basketball
Sport event Swimming
Tennis
Sport teams Golf
Soccer
Individual
Athletics
athletes
Professional High level Mass Youth Performance
sport sport sport sport
Ref.: Bruhn, M. „Sponsoring“ 2003, p. 41

68. 5. Economic logic – an outlook
Future perspectives of sponsorship in sports
• Considerable changes of structure in media and communication
markets
• Diffuse losses and reaction problems with traditional communication
instruments
• Cost explosion at attractive sports events
• Problems with analysing and measuring of effects and efficiency
• Development of interactive marketing and communication
“instruments” through multimedia
• Necessary new orientation of the company′s integrated
communication strategy

69. 5. Economic logic – an outlook
The future of sport sponsorship
The development of sport sponsorship is influenced by:
• more professionalism
• better planning
• a higher quality of communication
• relevance for the core business
• more credibility & effectiveness
• long term agreements