Counting the euros

For the players, it was the biggest game of their lives. But Portugal versus Greece in the Euro 2004 final in Lisbon was a rather tense, frenetic affair that did not live long in the memory, despite the shock factor created by a 1-0 victory for the unfancied Greeks. Still, that game attracted 273m television viewers, the biggest audience of any single sporting event in 2004. Put into context, this comfortably surpassed the opening ceremony of the Athens Olympics, the men’s Olympic 100m final at those games, the Super Bowl and the Monaco Grand Prix.

Come June 29 and the final of Euro 2008 in Vienna, Uefa can safely assume it will generate even more impressive ratings, such is the popular interest in European football played at the highest level. Uefa’s much-acclaimed Champions League has done the most to feed that interest. That competition, which features Europe’s top professional clubs, brings in revenues that leave not just some European domestic leagues but those of other premier sports in its wake.

“Uefa is an incredibly successful organisation when it comes to its finances,” says Drew Barrand at the Sport Industry Group, a business of sport consultancy. “It has a lot more transparency and trust than Fifa [the world governing body of football] just because of the way it’s gone about its business.”

The Champions League of 2005-06 made revenues of €608m, about three-quarters of all sales for the governing body of European football, the majority of it returned to the competing clubs.

Michel Platini, Uefa’s president, has raised concerns that the commercialisation of the sport is threatening the spirit of competition in European football and would rather distribute the spoils of his organisation’s income to less well-off corners of the game across the continent.

But until and unless he reorganises the game in Europe on a more level playing field, Uefa’s revenue-generating formula will be inextricably tied to European football’s most highly paid players appearing for the most glamourous and cash-rich clubs.

Philippe le Floc’h, Uefa’s marketing and media rights director, says his president’s view does not conflict with his own task of ensuring the governing body fully finances its competitions. “My job is to make sure we are exploiting our competitions in a way that supports football,” he says. “We are a non-profit organisation and all the money we generate goes back into the game.”

Television rights provide the bulk of that income, followed by sponsors and suppliers. Uefa’s shrewd management and marketing of its tournament, sometimes in the face of threats by rebellious elite clubs of breakaway leagues, enabled it to make a net profit of €32.4m in 2005-2006, after solidarity payments to clubs. The figure is impressive especially given that the organisation employs barely 300 people.

The European Championship has long presented Uefa with an opportunity to showcase the finest footballers in the continent. But Euro 2008 represents the first opportunity to harness marketing and sponsorship techniques developed in the Champions League to the quadrennial tournament. For example, the sale of television rights for the 31-match Euro 2008 is markedly different from previous tournaments. Uefa used to sell the rights to a central body, the European Broadcasting Union. This time it awarded them to SportFive, the Hamburg-based marketing agency, which works in partnership with Uefa to open up coverage to competition between broadcasters in each European country.

That policy shift has led some commentators to predict at least a 20 per cent increase in television rights income on Euro 2004 to more than €600m, although Uefa insisted on a clause that the main broadcaster in each country must be a free-to-air operator. Uefa carried out direct negotiations for the first time for the European Championship rights outside Europe. The result was that Hong Kong broadcaster PCCW paid for the Asian rights, ESPN secured the rights in North America and pay television rights in Latin America, and al-Jazeera purchased the rights to broadcast the tournament across the Middle East and north Africa.

Unsurprisingly, given the media exposure, corporate sponsors are happily riding the European football wave. Castrol, the motor oil lubricants maker, is the latest to get on board. Its sponsorship incorporates the rights to a new tracking system developed by Uefa to monitor the performance of players during matches, such as distances run and average speed.

Mastercard, a sponsor since 1992, drove commerce with banking partners in Portugal at Euro 2004, developing more than 2,000 promotions with customer banks. Pele and Portugal’s Eusebio, two footballing legends, helped Mastercard to expand its Portuguese business.

At Euro 2008, it will again distribute merchandise such as the referee’s red and yellow cards. It will also set up “fanzones” and giant table football games in the city centres. Austria and Switzerland’s dual hosting of Euro 2008 effectively gives sponsors the opportunity to exploit two markets “for the price of one”, says Paul Meulendijk, the company’s head of sponsorship.

Platini’s desire to spread wealth across the game suits sponsors like Mastercard. The 2012 tournament will be held in Poland and Ukraine, opening up more emerging markets for companies lining up alongside European football’s finest.