Thursday, June 23, 2011

The Lowdown On Football Jersey Sponsors

It cost millions to sponsor a top club's jersey a year. There is much politics and interesting twists to which company gets which club and how much they paid. Bottom line a jersey sponsorship may only pay for 3 or 4 top players' annual salaries only, but every bit helps I guess.

Following the article is a series of tabulation of the top sponsored jerseys. But first, we can look forward to the jersey for Cardiff City, owned by Vincent Tan. In fact, the club has had to reject many potential advertisers. (So, what's next higher title after Tan Sri for Vincent Tan?). This may look like a joke, but its not. Hold on tight for next season's Cardiff City's jersey .... (I reiterate, this is not a joke!!!):

Hot off the press, Genting is the new sponsor for Aston Villa jersey, Malaysia Booooleehh ... (gee, I cringe whenever I hear that!!!)

Aston Villa Nike 2011/12 Away Football Kit / Soccer Jersey

Wall Street Journal

The biggest deals in football used to be multimillion dollar transfers to land the sport's biggest stars. These days, arguably the most important signings for Europe's top clubs are the corporate sponsors on the front of their uniforms.

Research released last Thursday paints a rosy picture of the commercial value of European club football, with shirt sponsorship up nearly 20% across the major leagues.

The European Jersey Report by sports marketing consultancy Sport+Markt aggregates the amount of money received from shirt sponsorship by all clubs competing in the top leagues of England, Italy, Spain, France, Germany and the Netherlands. The study showed that shirt sponsorship revenue for these clubs increased by 18% to €470.7 million ($656.2 million), a jump of €75.2 million from previous studies.

The 20 teams in England's Premier League attracted the most money—a combined total of €129 million, up from €84 million—ahead of Germany's Bundesliga (€118.5 million), Serie A in Italy (€65.9 million). For the first time since the company began compiling its findings, clubs in Ligue 1, the French first division (€58.8 million) placed higher than those in Spain's La Liga (€57.5 million). In all, only Serie A recorded a decline in total revenue for its clubs.

Beneath the headline figures, however, the detail tells a different story. Far from being a sign of health, the study reveals the extent to which the world's most popular sport has grown dependent on money from the gambling sector. It also provides evidence of the broad and widening divide between a small number of elite clubs and the rest, a fault line that threatens to undermine the long-term health of the sport.

Two sectors dominate jersey sponsorship: banking and gambling. The latter is largely due to the liberalization of the French gambling market, said Gareth Moore, a director for Sport+Markt. France opened up its online horse-racing and sports-betting industry to competition in June, relaxing a state monopoly on gambling that traces back to the 16th century.

Online gaming companies such as BetClic Enterprises Ltd and Bwin Interactive Entertainment AG now see football shirts as a way of differentiating their brands in a very competitive market. BetClic ranks third among a host of new brands entering the football market with €20 million paid for jersey sponsorship deals with Juventus FC, Olympique Lyonnais and Olympique Marseille.

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This season, seven of the 20 clubs in the English Premier League have jerseys emblazoned with the names of online betting companies and in Spain, Real Madrid's famous white jersey carries the corporate logo of Bwin, the club's major sponsor following a deal worth roughly €23 million.

"Betting and gambling have helped to deliver significant revenues for football clubs across Europe in what are challenging economic times and the importance of the sector cannot be overlooked," said Mr. Moore, who suggests future liberalization of the gambling market, particularly in Germany, will ensure the market for elite football jerseys continues to rise.

Despite this optimism, the presence of so many online gambling companies raises issues beyond football. "It's an example of how gambling is thrust in our faces following the liberalization of the law," said Professor Jim Orford, an expert in the psychological effects of gambling at Birmingham University in the U.K. Children are particularly exposed to football sponsorship, according to Prof. Orford, since there is no way to stop them seeing the logos on television.

This talks to another point: the perception, commonly held among marketers, that football shirt sponsorship is in essence a blunt instrument.

In modern marketing terms, shirt sponsorship deals are "a bit of a relic," according to Tim Crow, chief executive of U.K.-based sports sponsorship consultants Synergy. "It's really a 20th century media buy—the players as walking billboards—rather than 21st century sponsorship, which is a highly sophisticated form of marketing involving engagement and dialogue with consumers," he said.

Mr. Crow suggests the market for jersey sponsorship will continue to be sustained by companies with low brand awareness, who will buy it just for the media exposure. But only the big clubs are price-setters, because of the amount of fans they have around the world. "The other clubs are price-takers because they have much smaller fan bases," he said.

This is true of each of the European leagues. In the Premier League the disparity between the elite few and the rest is stark, with the ability to offer a global media platform the dividing line between haves and have-nots.

Jersey sponsorship revenue from just three clubs—Manchester United, Liverpool and Chelsea—makes up 49.1% of the €129 million total received by all 20 league teams. Standard Chartered PLC, the U.K.-based but Asia-focused bank, signed up with Liverpool for more than €23 million a year, the same amount paid by U.S. insurance broker Aon Corp. to splash its logo on Manchester United's jerseys.

Lower down the league, however, teams such as Blackpool and Wolverhampton Wanderers operate on a fraction of these sums. The shirt sponsorship deals for those two clubs are estimated at less than €1 million.

The inability to fetch a competitive price has forced some clubs to innovate. Newly promoted West Bromwich Albion sought permission to sell its shirt on a match by match basis, with local shop-fitters Esprit signing up for a non-televised game, following similar short-term deals with betting companies Blue Square Ltd and Victor Chandler International Ltd.

Tottenham Hotspur even sold its shirt twice—once for Premier League games and the other for games in the UEFA Champions League. The commercial realpolitik of such a deal was revealed by Mike Lynch, chief executive of software company Autonomy PLC, which sponsor's Spurs' league shirt.

"We were getting phone calls from every sport under the sun as normal sponsors disappeared," Mr. Lynch said. "The [Spurs] price fell to a fraction of the normal rate the closer we got to the season." Despite being the biggest software company in the U.K., Mr. Lynch said the firm's brand is virtually unknown to the general public, a situation it sought to rectify ahead of a consumer launch over the next year.

Manchester United have recently set about carving their rights into smaller region-specific chunks, with three new partners announced including communications group Telekom Malaysia, Turkish Airlines and South Africa's MTN Group. The club also has country specific partnerships with firms including India's Bharti Airtel and Saudi Telecom Company. "These companies have rights to Manchester United IP around which they can activate globally," said Richard Arnold the club's commercial director.

Barcelona - Qatar Foundation, an educational organisation, secured a 5 year deal, annually costing $41m. Why, who knows, how it translates to their foundation's work is anyone's guess.
Bayern Munich - The German telecommunications giant will be spending $35.7m a year on this.

Liverpool - Gee, no more free Carlsberg beer??? Now, big strong and friendly, and spending $33m a year on this.

Manchester United - MU switched to this Chicago based insurer after the collapse of AIG. Cost $32.75m a year. Would have been more but the savvy marketing guys got regional jersey sponsors to top it all off. Manchester United have recently set about carving their rights into smaller region-specific chunks, with three new partners announced including communications group Telekom Malaysia, Turkish Airlines and South Africa's MTN Group. The club also has country specific partnerships with firms including India's Bharti Airtel and Saudi Telecom Company.
Real Madrid - The Austrian internet betting site will be paying $29m a year. Bwin swooped in after last year's sponsor BenQ of Taiwan, suffered almost the same demise as Mourinho's success rate, the company went bankrupt.

AC Milan - The embattled and viagra ladened Berlusconi owns this club. Emirates Airlines will pay $20.5m for this, but Emirates Airlines is also sponsoring France's Paris Saint Germain, Germany's Hamburger and England's Arsenal. How many people you have to fly to pay for all this???

Tottenham Hotspurs - When one is not enough, get two sponsors, Investec is an asset manager, while Autonomy is a software company. The former will be for cup matches and the latter for league matches. Total $20.4m a year. If Spurs exit early from cup matches, Investec will be making a sorry decision indeed.

Chelsea - Roman does not need this type of money to help him. Roman has had a history of neglecting this type of indirect marketing deals till this deal, guess he may finally need some money to help him. Just $16.3m a year.
Manchester City - Etihad got in cheap considering the amount of money spent by the new owner. Etihad Airways will only pay $12.3m a year.


brian.wong said...

You should check into the jersey of Cardiff City for next season!

Salvatore_Dali said...

thanks brian

michellekuan said...

that's the most ah beng football jersey i ever seen, haha...

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