When selling sponsorship, rights holders want to know what size of company they should be targeting, so looking at sponsors by company revenue provides a useful barometer

Sponsors by company revenue: a baseline?

A general rule of thumb in the industry when looking for companies that can afford the cost of a particular sponsorship is that it represents around 1% of revenue. In other words, if your sponsorship costs $1m, you should be targeting companies with at least $100m in annual revenue.

This could be due to average estimates that B2B companies tend to spend 2-5% of their annual revenue on marketing, while for B2C companies its nearer 5-10%. Some can be as high as 25%. Clearly, sponsorship is only one marketing activity of many that a company can employ.

So, how does this play out in practice?

To find out, we analysed the annual revenue of the main sponsors (85 of them) across four major international sporting events occurring around the same time in June/July 2024: soccer’s European Championships, the Olympics, the T20 Cricket World Cup and Wimbledon (but also including the other three tennis grand slams).

As the infographic above shows, there is a huge range in revenue, from below $2bn to above $60bn. The lowest at around $25m (FanCraze x T20 World Cup and Sipsmith Gin x Wimbledon) to Aramco’s (x T20 World Cup) staggering $495bn.

In fact, the average revenue across them all is an eye-watering $41.2bn. However, this is ‘skewed’ by a few very large figures such as Aramco, Toyota and Samsung (both $200m+) so the median figure of $22.4bn is probably more indicative. (Note, the median is the middle one when all the revenues are ordered by size).

This skew is particularly apparent with the T20 World Cup, due to Aramco’s involvement: the average is $66.8bn but the median is a tenth of that at $6.7bn.

Sponsors by company revenue: what the figures suggest

Clearly with these being premium global/international events and the fact we are purely looking at the main partners, one would expect sponsor revenues to be very high.

Correspondingly, the cost of the sponsorship is high: such as Barclays $24m per year deal with Wimbledon and Kia’s $14.4m with the Australian Open.  French publication Le Parisien reported that a Premium Partnership (not covered in this analysis) at the Olympics costs between $87m and $164m. Indeed, LVMH paid $166m for its partnership.

So if we look at a selection of sponsorship deals relating to these types of rights holders and the corresponding annual revenue, we can see that the ratio of deal cost to revenue is far lower than 1%.

For example, Aramco’s $100m annual deal with FIFA represents around 0.02% of its annual revenue, rising to 0.36% for the Las Vegas Convention & Visitor’s Authority’s deal with CONCACAF (the Americas version of UEFA).

The average across this small sample is 0.14% which suggests that if your rights cost $1m, you should be targeting companies whose annual revenue is at least $700 million. If your rights are $100k, the target should be companies above $70 million.