Sponsorship Revolution in Iran, the unexploited market of the Persian state
18th December, 2015
Earlier in the year we saw a massive development in international relations, as Iran signed the nuclear non-proliferation treaty. The treaty, has the objectives to inhibit the spread of nuclear weapons and weapons technology, promote cooperation in the peaceful uses of nuclear energy, and to assist in the goal of nuclear disarmament (depository states of the non-proliferation treaty include United States, Great Britain and Germany). Before this, Iran was seen as an outsider in the global community due to world super powers freezing many financial assets, implementing trading embargo’s and sanctions that were crippling the nation’s economy and society.
To prevent an economic collapse, the Persian state succumbed to the West’s demands and signed the treaty. With this change, there is a commercial revolution afoot. The youth of Iran are in search for a taste of modern western culture – which makes this an area of opportunity for brands looking to grow in the Middle East. Sponsorship can be the tool to forge new revenue streams in prime markets such as tech, consumer and sport products.
Iran’s demographic has shifted considerably in the past 20 years. The archaic revolution era of the 80s has passed as the left wing followers are growing old and having a smaller effect on the country’s political direction. The new youth of today are inter-savvy and pushing change underpinned by this improved relationship with the West.
Where does sponsorship fit into all this?
Iran adores sport, especially football. The Iranian Football Premier League, consists of 16 teams and is ranked by the Asian Football Confederation as the 3rd best league in Asia, and the National team are the highest ranked Asian team placed at 38th in the FIFA world rankings.
In 2011 The Iranian Football Federation secured TV rights of both Iranian Football Premier League and national team matches worth $96.5 million that ran until 2014. If a country that was under major sanctions can generate a football league that is one of best in the Asian peninsula and a T.V. deal of almost $100 million, what potential does this nation now have with these sanctions now revoked?
A real life example
An example of a country that has had a major development in sporting infrastructure is India. In 2008 the Board of Control for Cricket in India (BCCI) used a heavy mixture of commercialisation, international stars and Bollywood glamour to transform and unlock India’s immense market for sport, with the creation of the Indian Premier League for twenty20 cricket. This concoction of sport, culture and glamour has enabled the league to become the most-watched twenty20 competition in the world.
At its height the Indian Premier League had title sponsorship deals with Pepsi Co. worth $71 million (2013-2015) and DLF Group, India’s largest property developer, worth $50 million (2008-2012). On top of these monstrous sponsorship deals, a T.V. partnership was created. It was made up of India’s Sony Entertainment Television (Set Max) network and Singapore-based World Sport Group. Both of these entities secured the global broadcasting rights of the IPL with a record deal that has a tenure of ten years at a cost of US$1.026 billion.
All of these factors have enabled The Indian Premier League to be one of the most watched competitions in the world, resulting in the league currently being worth in excess of $3.67 billion. By replicating India’s platform, the Iranian Football Premier League could be looking at exponential profits.
Here are three ways in which The Iranian Football Premier league can emulate the success of The Indian Premier League:
- The Iranian Football Premier League could look to branch away from the state ownership of teams and move into a more corporate ownership or stakeholder structure. Clubs who do so could have the potential to increase their sponsorship opportunities as they are more commercially viable to brands due to their business strategies.
- The popularity of the league is clearly demonstrated with the average attendances of each game (Esteghlal Meli-Sanati Khuzestan Football Club average attendance is 50,000). Packed stadiums emanate an exciting and appealing league that is tempting for broadcasters
- Finally a league that is appealing to broadcasters will be lucrative for sponsors. This means the league needs to begin to look further than the Persian Gulf and Asian continent in order to maximise and increase its audience and following.
By moving into a more corporate playing field, leveraging the sports obvious popularity and expanding its TV reach has enabled the Indian Premier League to become one of the most popular and profitable completions in the world. Iran now has the opportunity to follow that same blueprint.
