Barcelona Secure €150m Sponsorship Deal With Nike - 29/10/2006

Nike, the world's largest sporting goods company and FC Barcelona, have announced a new five-year sponsorship deal for €150m that both sides hope will take them to number one in the sport. Nike has been one of the club's leading sponsors since 1998. The latest contract includes additional undisclosed bonuses and royalties, with a possible five-year renewal which would further extend the relationship to 2018.

The deal marks a convergence of marketing strategies between the two signatories which has been developing since the politically ambitious Mr Laporta was elected president of FC Barcelona in the summer of 2003. Nike has been trying to gain distance from past associations with sweatshop labour by branding itself a champion of ethical trade. Barcelona wants to be a club that people follow not just for its football but because of its social commitment as well. The Nike deal follows Barcelona signing last month a five year agreement with Uniced under which the club's players carry the United Nations Children's Fund logo on their shirts as part of a joint programme of support for those in the developing world. Behind the philanthropic gesture is a business calculation that the deal will expand the club's international following and throw up other marketing opportunities including television rights.

Since taking over at the club Mr Laporta has moved to exploit its popular image as a social and cultural phenomenon as defined in the club's motto 'Mes que un club' (more than a club). Repressed politically during the Franco dictatorship, Barca has turned into a vehicle for a powerful collective identity in defence of Catalan nationalism and as a wider expression of democratic rights.

From 1998-2001 the plc announced a dividend of 8.8p on each share, reduced to 7.7p in 2002, giving Ellis a total of £1.65m. The dividends dried up as Villa started to lose money after 2003, but Ellis' salary (agreed, of course, by a renumeration committee) reached £296,555 in 2005. When he sold his remaining Villa shares he netted £20.14m and, because he had a twelve month contract, he was due £300,840 for leaving. 4-4-2 calculate that he made a total of £29m from Villa in the period since 1982. His defenders could argue that he kept Villa in the Premiership and avoided the kind of financial meltdown experienced at Leeds. But supposing, for example, the dividend payments had been largely invested in the team. Would Villa's revival have started earlier?