According to a report in 'Marketing Week', Premier League side Manchester United have emerged the dominant player in the scramble for localised sponsorships deals among Europe’s elite football clubs, securing nearly two thirds (60 per cent) of the £32.5bn the region’s 20 biggest clubs extracted from the strategy last season, according to a report.
Manchester United has a deal with Airtel Africa spanning several countries including Nigeria and Kenya.
The Repucom Football Club Income Stream Report revealed United, the propagator of the technique in 2008, generated €32m last season through 38 deals. The club signed ten regional partners last season and told analysts earlier this year it would continue to add to its roster.
The short-term deals are understood to be valued between £1m and £2m, dwarfed by the multi-million pound global deals with the likes of Chevrolet and the incoming Adidas. However with the business raking in €423.8m (£348m) in total commercial revenue for the 2012/13 season, according to Deloitte, its clear the ‘a little often’ approach to sponsorships is delivering immediate returns.
United’s success has not gone unnoticed. Rivals Chelsea FC signed 13 deals last season to try and catch up to United, according to Repucom, while Arsenal made eight deals followed by Manchester City’s six. Elsewhere, Liverpool FC dipped their toe into the arena with a two-year venture with Scandinavian betting firm ComeOn!.
Barcelona, in an attempt to curb rising debt, struck 11 deals, including a five-year tie-up with the Heineken-owned Mexican beer Tecate.
Andrew Walsh, football analyst at Repucom, says the flurry of deals over the last year signals the strategy is gathering pace. Clubs are more willing to work with brands or offer their logos in the hopes of uncovering alternatives to the traditional match day, broadcasting, licensing and retail revenues.
Whilst broadcast rights remain the biggest income stream for clubs in Europe, commercial activities are the second largest contributor, accounting for 29 per cent of all revenues made. Identifying new ways to increase the value of these deals is “incredibly important”, adds Walsh.
“It’s an important strategy for clubs of all sports to take note of, especially as their global profiles rise. Understanding local market forces is vital in realising the most valuable partnerships available to them in order to utilise a commercial strategy which is only just beginning to be tapped in to.”
But sponsorship experts warn territory specific deals presuppose three key factors: A global fan base, strong local media platforms and a sales and servicing structure capable of creating business and servicing the clients. As a consequence regional deals are really only going to work for a handful of elite cubs or properties that enjoy these preconditions, they add.
Phil Carling, managing director of football worldwide at sponsorship agency Octagon, says: “This issues a model like this brings for the rights holder revolve around maintaining category exclusivity, maintaining a sense of exclusivity for partners - which is difficult if you have 59 separate brands in the portfolio as United do – alongside building brand engagement beyond the media platform and expanding the relevance of these deals beyond a handful of categories.
“The next generation of these deals will be significantly assisted by the development of new technology such as [in-event ad platform] Suppanor wherein the number of brands able to enjoy exposure will be limited only by the number of broadcast territories and the cost of the technology.”
Nigel Currie, director of sports marketing at BrandRapport, says: “A lot has to do with building the brand in the local community and improving relationships with groups of people who operate in the same area - local companies, potential employees, Councils etc. The power of using the football club to build the local community/ city is extremely effective. Local brands are now prepared to pay much more to get the opportunity to align themselves with football clubs who are receiving unprecedented levels of national and global media exposure.”
Globally, for European football clubs, Asia is the most popular region for these partnerships with 47 deals in total, found the report, followed by Europe (15), Africa (10) and Central and South America (4). Furthermore, there are eight sponsorship contracts that cover more than one continent and include North America and Oceania, for example. Thailand is the market which is covered by the most deals (17), either individually or as part of a region.
With 20 contracts, financial services is the most prolific industry in terms of localised sponsorships, followed by the telecommunications (16 deals) and the food & beverages sectors (11 deals).