The football industry is huge. More than 30 billion dollars are made just by European clubs and leagues. That’s more than the whole economy of Estonia! And a big chunk of that money comes from sponsorships. But why do companies spend so much to be seen on jerseys, screens and pitches that surround football? Because football is watched by millions of people around the globe. Not every four years, like the Olympics. Or once a year, like the Super Bowl. Millions tune in each and every week. And that incredible reach gives football incredible power. All of this makes it even more interesting to look at who is paying for that power. What companies invest the most in football – and why?
Almost everyone wants to sponsor football. Insurance companies, sports brands and beverages. But there is one industry that overtrumps all the others. The energy industry. In particular, companies involved in fossil fuels like oil and gas. The history of football is closely linked to the history of oil. Just as football followed oil, oil has followed football.
Employees of the Anglo-Iranian Oil Company (now BP) introduced football into Iran and Qatar. Foreign workers operating the oil fields of Romania helped bring football to the country; most of Romania’s World Cup team in 1930 were made up of those employees.
Oil money poured into football in the 1940s and 50s. Oil companies and workers founded clubs and established entire leagues and competitions. But over the last two decades, the oil industry has expanded its reach like never before. Gazprom, majority-owned by the Russian state, is the world’s largest gas company. They sponsor the Champions League, their CEO happens to be the vice-president of the Russian Football Federation, and the company was involved in getting the 2018 World Cup to Russia. Since 2007 they have partnered with German club Schalke and secured significant influence with their sponsorship money. When Schalke negotiated with Bayern Munich over the transfer of Manuel Neuer (in 2011), Russian President Vladimir Putin personally tried to stop the deal.
With limited success. They are also the sponsor of Red Star Belgrade, Zenit St Petersburg and used to be the energy
partner of Chelsea. Chelsea, owned by oil tycoon Roman Abramovich, is perhaps the most emblematic example of
oil money in football. He injected hundreds of millions into the club, breaking transfer records to assemble a team that would eventually win the Champions League. Five years after Abramovich bought Chelsea, Manchester City was acquired by the Abu Dhabi United Group. Since then, the Group has invested heavily and built a whole new football empire of clubs around the world. In France, Paris Saint Germain was transformed into a super club since the state of Qatar acquired and reinvented the club with its gas money. In Spain, Barcelona traditionally managed without a shirt sponsor for years. Until they got a massive sponsorship deal with the Qatar Foundation, which is owned by the state of Qatar.
Real Madrid’s shirt sponsor? You guessed it. So you get the point. Oil and gas money is everywhere in football. But why is that so?
It is obvious why Nike or Adidas sponsor football. They want their logos and products to be seen by fans, who then go to the store to buy the football boots of Messi and Ronaldo. But are you going to buy oil from Abu Dhabi because you are a Man City fan?
Or gas from Russia because you like watching the Champions League? To understand why oil and gas companies pump billions into football, we need to dig a bit deeper and explore how their industries work.
And who could be better suited to help us with this task than Elon Musk? “There are time extensions on the game but the game is gonna come to an end. That should be absolutely certain.”
When he is talking about the game he does not refer to football, but oil and gas. It is one of the most powerful and biggest industries. Whole economies were and still are built on oil and gas. But there is an expiry date. Peak oil describes the moment at which extraction of oil reaches a rate greater than at any time in the past or future. Simply put, that means that the world either runs out of oil or it is getting too costly to extract it. Numerous predictions for when we’ll run out of oil have been made over the past century – before being falsified by new sources and technology. But this time could be different. It’s getting harder and harder to find hydrocarbons and much more expensive to extract them. Oil and gas are non-renewable, their supply is not infinite. So the question is when hydrocarbons run out or become too expensive, not if. That’s not only the standpoint of Elon Musk who is trying to sell electric cars. It’s what the oil industry says itself. According to Shell, one of the biggest oil companies in the world, peak oil was in 2019 and oil extraction will now enter terminal decline. That means that the industry is under immense pressure. And it means that running an economy on oil is not a good idea. Wendover Productions recently made a great video explaining this with the example of Saudi Arabia.
A McKinsey study predicts that until 2030 in Saudi Arabia:
The average household income will fall, the unemployment rate will rise and the 900 billion dollar government assets will be turned into 2 trillion of debts. So basically the economy is on the way to fiscal collapse because of its dependency on oil. So what can you do when your economy is built on a resource that is going to end eventually? You can diversify. And you can make sure that the world at least buys your oil as long as possible. Which brings us back to football. The big states that supply oil and gas are all competing for customers. Russia, Saudi Arabia, Qatar, UAE. Having a good network and reputation is extremely important for those states and their companies. And that’s exactly what football can provide to them.
Take the case of Gazprom. Germany is Gazprom’s largest customer. Just recently there was a huge public and political debate about the gas pipeline Nord Stream 2, because of concerns that the pipeline would increase Russia’s influence in Europe. That’s why it is in Gazprom’s interest to maintain a positive public profile in Germany. And what better way to achieve that than by sponsoring the country’s most popular sport? The head of Gazprom’s marketing explained the sponsorship deal with Schalke as part
of a wider strategy: “We have to tell the people the story about Gazprom… we have to teach them why they can love Gazprom.”
In theory, that is not different from Nike and Adidas sponsoring teams and players. They are competing for customers and want to sell a product – maybe with a little bit more geopolitics involved. But there’s one more thing. This could be a graph of the energy industry’s share of sponsorship money in football. But it’s not. It is the share of the industry in global greenhouse gas emissions. The energy industry is responsible for almost three quarters of the global greenhouse gas emissions. That causes something called climate change. To slow rapid climate change, the world needs to reduce greenhouse gas emissions. Which puts additional pressure on the oil and gas industry. Gazprom alone is responsible for almost 4% of all greenhouse gas emissions between 1988 and 2015. That’s just one company. Qatar has the highest emissions per person in the world (in 2017, 49t). The oil and gas industry has a significant impact on our climate. That increases the industries’ need for political influence and public approval.
Having prominent football sponsorship offers a way around bad publicity by winning approval on the field. Football alone will not stop climate change. And it is only logical that clubs partner with lucrative sponsors – who is to judge who’s a good sponsor and who’s a bad sponsor? But then again football can be a means of steering social change. All the power that football holds – and the money that buys that power – relies on the players and fans. In the late 80s, Shell negotiated with the Norwegian football association about a sponsorship
deal. At the time, anti-apartheid campaigners were targeting the company for helping the South African regime evade an international oil embargo. Eivind Arnevåg, one of Norway’s most popular players, announced he would not play in a league sponsored by Shell. As a consequence, the Norwegian football association tore up its provisional contract. Or think of the uproar around the Super League. Now just imagine a similar rebellion every time an oil tycoon tries to buy or simply sponsor a football club.
It is getting common to watch a French team sponsored by Qatari gas money play against an English team sponsored by Russian oil money. Almost as if the field is hosting two competitions at once: one match between the two clubs and one larger play for geopolitical power that continues long after the final whistle.
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