Football clubs are becoming price takers rather than price makers when it comes to shirt sponsorship deals. Sport+Markt, the sports consultancy, estimates that the value of shirt sponsorship deals in the Premiership fell from £69.2m during the 2007-8 season to £68.2m last season after years of continuous growth. Carlsberg has so far declined to extend its £7.5m a year deal with Liverpool which finishes at the end of the season. Talks are continuing, but there is speculation that the Danish brewer might walk. The corporate failure of several sponsors has hit the market.
Football clubs are becoming price takers rather than price makers when it comes to shirt sponsorship deals. Sport+Markt, the sports consultancy, estimates that the value of shirt sponsorship deals in the Premiership fell from £69.2m during the 2007-8 season to £68.2m last season after years of continuous growth. Carlsberg has so far declined to extend its £7.5m a year deal with Liverpool which finishes at the end of the season. Talks are continuing, but there is speculation that the Danish brewer might walk. The corporate failure of several sponsors has hit the market. Manchester United’s sponsor insurance giant AIG hit the rocks, but their £19m a year deal was replaced by one with Aon said to be worth £25m a year. However, relatively few clubs have the global marketing clout of United. West Ham were forced to patch over the logo of its sponsor XL when the travel company went into administration. There was a certain synergy between Northern Rock’s sponsorship of Newcastle United and the relegation of the Magpies. Another relegated club, West Bromwich Albion, began the season without a sponsor at all. Bolton Wanderers and Wigan Athletic had to settle for a joint deal with 188BET, an Asian-focused online gambling company. Instead of getting the £1m each they hoped for, Bolton is thought to be getting about £750,000 a year and Wigan £650,000 in a two-year deal.
Andreas Ullmann, head of market intelligence at Sport+Markt, is expecting the value of shirt deals to recover slightly to £70m this year. New sponsors from the betting industry have helped. ‘Without them many clubs would have serious problems,’ he told the Financial Times. The global branding clout of the biggest clubs may potect them from the downturn, but Julie Clarke, head of sports and leisure at PwC, says smaller football clubs may struggle to maintain sponsorship deals at previous levels. ‘What we are seeing is a polarisation between the top-tier teams and the bottom tiers,’ she told the Pink ‘Un. Joel Seymour Hyde, of sports consultancy Octagon, says fragmentation of traditional media is making sports sponsorship a more attractive platform than conventional advertising. That view was endorsed by Gyehuyn Kwon, head of worldwide sports marketing at Samsung Electronics (the very existence of such a post is significant) which recently renewed its sponsorship of Chelsea for a reported £10m a year. ‘The Chelsea sponsorship is much more effective than any other traditional marketing tool.’ he commented. However, there is always the risk of alienating supporters of opposing clubs. This is why in Scotland Carling sponsors both Rangers and Celtic.
Related Articles
United Secure Big Shirt Deal – 06/06/2009
Manchester United have once again demonstrated their financial pulling power by securing the biggest shirt deal in football history…
Buyer’s Market For Shirt Sponsorship – 18/05/2009
Premiership clubs are facing a buyer’s market for team shirt sponsorships…
Shirt Sponsors Are Harder To Find – 21/09/2008
The turmoil at Manchester United’s sponsors, AIG, has focused attention on football shirt sponsors. Football shirt sponsorship has enjoyed steady growth in recent years. According to sports marketing consultant Sports Markt, total revenues last year were…