SPONSORSHIP TODAY

Sponsorship Today
ISBN: 2050-4888
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European Premier League Soccer

Executive Summary

Analysis of Europe’s premier league clubs’ sponsorship income for 2011/12 shows several very distinct trends.

GROWING POLARITY

The most noticeable of these is the growing polarity in fee income between the leading clubs and those with little chance of sporting success. Leading the pack is Barcelona, which has gone from having no sponsor – the club had an agreement to promote UNICEF until the end of the 2010/11 season – to a record breaking €32 million per year deal with the Qatar Foundation.

By contrast, many of the less glamorous or successful clubs, in even the top leagues, struggle to achieve an annual fee of half a million euros. Indeed the season kicked off with quite a few clubs, particularly in Spain, yet to sign a primary sponsorship deal. In other cases clubs appear to be resigned to such small deals that they have instead opted to partner charity organisations and sport their logos as part of a commitment to corporate social responsibility.

Reinforcing the issue of polarity is the fact that the larger the deal, the much more likely it is to be long running. Most of the major clubs have sponsorship commitments that run to a minimum of three years and many have had partnerships that have been renewed after such periods. Small clubs, with low value deals, tend to have much shorter agreements, often running for just a single season.

GERMANY AND ENGLAND LEAD

The total deal values achieved by German and English clubs account for more than half of the overall spend among the top six leagues (ranked by turnover) in Europe. Although English clubs receive a total of €128m with German equivalents not far behind on €121m, there are two fewer clubs in Germany, which means that on average, German clubs receive the greatest income (€6.7m per club).

Italy is third with €79m while Spain’s €62m is mostly made up of fees earned by its giants; Barcelona and Real Madrid, which account for €53m of that total. Dutch clubs appear to punch well above their weight with the country’s leading clubs able to command fees in the €10m bracket.

TOP CLUBS

Barcelona has leapt into the lead having taken commercial sponsorship for the first time in its history. In second place is Bayern Munich (Deutsche Telekom), followed by Manchester City (Etihad) and its neighbour Manchester United (Aon) is fourth. Real Madrid (Bwin) and Liverpool (Standard Chartered) are the two other clubs that break the €20m barrier.

GAMBLING IS NOW MAJOR INVESTOR

Analysis of industry sector investment shows that gambling is becoming an increasingly important source of sponsorship revenue. With the notable exceptions of Real Madrid/Bwin and Juventus/Betclic, the majority of gambling sponsorships are among smaller clubs, particularly in France and England. The suggestion is that such smaller clubs are increasingly desperate to find major brands to partner with and have to accept what is likely to be a politically difficult sector to work with. Despite the smaller size of these clubs, they still have a high public profile and there is every chance that this will lead to a political backlash if gambling is seen to grow, particularly among younger and more vulnerable people. Regardless of the impact on behaviour that sponsorship might actually have, the media and politicians will find an easy target in sponsorship if gambling becomes a major social problem in the coming years.

Financial services is still the leading sector in terms of overall spend, accounting for 23% of all deals by value.  This is in line with findings for sport in Europe overall where banking and insurance companies contribute around 25% of the total spend. The other major contributor to football clubs is the airline industry. However this is mainly down to a small number of big deals from Emirates and Etihad.

SPONSORSHIP MATURITY

The ‘maturity’ of the market in Europe’s leading leagues suggests that Germany and the Netherlands are currently leading as they tend to have a greater degree of diversity of industries investing and they are not relying on such sectors as gambling or alcohol. The duration of deals in these countries tends to be longer with many agreements set to last for three years or more, allowing a long-term partnership to develop.

THE FUTURE

Overall the pattern shows clearly that sponsorship among Europe’s elite clubs has now jumped from the €10m-€15m bracket to €20m plus.  In the next two years clubs such as Juventus, Arsenal and Chelsea will see their current deals come to an end. Despite the global economic uncertainty, it would appear that there are enough major corporations willing to invest very significant sums to see these clubs achieve similar deals. These larger fees reflect the popularity and exposure of the clubs on an international basis with many particularly keen on the marketing opportunities delivered in Asia.

The trend at the lower end, however, is not so promising. Many clubs would appear to have to settle for low value, short-term deals and this is especially the case in Spain, Italy and France where the sponsorship industry is less mature and clubs have lower levels of commercial professionalism. The small deals do, however, also apply to English Premier League clubs despite the global exposure that they receive when, for example, they play against the leading clubs. This suggests that major sponsors looking to use elite football for long-term marketing investment are not willing to take risks on smaller clubs.

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