How One Industry Controls Football

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?

Welcome to Athletic Interest, in this video

we will look into the power games of football

sponsorships and why one industry is reaching

for all the power at once.

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.

Some examples?

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.

You might have heard of it.

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

88 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 Arnev?g, 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.