Autors: Pedro Bastos Matheus
Giuliana Ribeiro Casazza
Since the 20th century, football has undergone a process of global expansion, becoming a central element of the culture and identity of different peoples. It comes as no surprise that Nelson Rodrigues warned us about the magnitude of the sport when he stated that in football, the worst blind person is the one who only sees the ball. Today, the sport transcends the boundaries of the field and represents both a universal passion and an extremely lucrative business.
According to information released by the Brazilian Football Confederation (CBF) in 2019, football, considering its entire value chain, has a direct and indirect contribution equivalent to 0.72% of the national Gross Domestic Product (GDP) in Brazil alone, which amounts to approximately BRL 52.9 billion.
This is because, in recent decades, the phenomenon of football has become intrinsically linked to the spectacle of sports marketing, transforming it into a true powerhouse in this field. The sport leverages marketing strategies to promote clubs, leagues, players, and competitions on a global scale. As a result, football has become fertile ground for the development of brands and businesses, driven by the pursuit of sponsorships, advertising contracts, broadcasting rights, and licensing.
Consequently, football is no longer limited to being just a game but also a billion-dollar business that needs to be treated as such in all possible commercial contexts. In this context, brand licensing in football emerges as an essential strategic tool for clubs to generate revenue, strengthen their bonds with the consumer public, and drive the expansion of their brands. The value of a brand is a key element for the success of tournaments and the growth of companies or organizations associated with clubs.
For example, Real Madrid is considered the football team with the strongest and the second most valuable brand in the world according to Brand Finance, with an estimated value of €1.46 billion. In addition to the extraordinary athletic skills of its players, brand management has been crucial to the success of the “merengues.”
The ability to attract fans, players, investors, and sponsors is one of the main benefits of becoming a notable brand both on and off the field. Last year, the Madrid giant signed a commercial agreement worth approximately €360 million with Sixth Street and Legends for the business exploitation of new stadiums for 20 years. Such partnerships are only possible thanks to the effective brand management of the club, which has also allowed for an €525 million renovation of the Santiago Bernabéu stadium.
Meanwhile, the protection of intellectual property rights, especially trademarks, is a true asset to be utilized in the sports context. The lack of protection can result in difficulties in safeguarding intellectual property assets abroad and in their devaluation.
Moreover, there are commercial implications when football clubs neglect brand protection, and this is primarily reflected in the overall weakening of the brand. It is necessary, then, to properly register club trademarks and negotiate commercial agreements that offer reliable products and services associated with the brand.
Even though signs, including trademarks, of sportive clubs are protected regardless of the previous registration in the National Institute of Industrial Property – INPI (article 87, of Law No. 9.615/98, “Pelé Law”), it is important to adequately register clubs’ trademarks specially to include products and services that differ from the sportive activities, object of legal protection by Pelé Law, and negotiate commercial agreements that offer reliable products and services associated with them.
Adequate protection can be achieved through registering the trademark for the desired goods and services, to obtain legal protection to the activities unrelated to the sportive activities, and licensing agreements, which can also be registered with INPI for third party knowledge, whose procedures are regulated by Law No. 9,279/1996 (Industrial Property Law). In Brazil, since October 2019, the country’s accession to the Madrid Protocol has also facilitated simultaneous registration of sports entities’ trademarks in various countries.
Holders of very famous trademarks can even seek the special protection for high renown trademarks, set forth in article 125 of the IP Law, which warrants special protection to all fields of activities. In Brazil, Clube de Regatas do Flamengo owns the high renown trademark registration for “Flamengo”, meaning that it can seek protection against the undue use of its mark in any field of activity, regardless of registration in the relevant class.
To ensure and maximize the return on brand investments, clubs must establish distribution, marketing, and licensing agreements with rigorous protection clauses and carefully select advertisers. Exclusivity, quality, distribution capabilities, and promotion of brand licensing are essential requirements for the success of these agreements.
Licensing allows the club to focus on its area of expertise, sports practice, and use the know-how and distribution capillarity of the business partners to take various products and services to the consumers.
The fans, in turn, directly contribute to the growth and sportive success of the club, since the acquisition of licensed goods means the payment of royalties to the club, which will be reverted as improvements and investments that can lead to victories and titles.
Building a brand in football goes beyond sports activities and encompasses the formation of a community of individuals who identify with the club and its values. It is directly associated with local culture and history, acting as a distinctive element that sets it apart from other football clubs.
In the current football landscape, where marketing and business gain increasing prominence, the protection of intellectual property rights and effective brand management are essential elements for the success and growth of clubs. Investment in trademark registration, strategic commercial agreements, and a solid marketing strategy enable the longevity, protection, and profitability of football clubs.