Recessions, even prolonged and deep ones, do not hit all businesses equally. Domino’s Pizza is an example of a business that has been boosted by the recession as cautious consumers substitute a takeaway for a meal out. Cinemas have also been doing good business, although attendances may have boosted by the success of particular films. The supermarkets that compete on price rather than quality or service have also been doing well. On the other hand, the motor vehicle industry has been hit hard. And estate agents, never the most popular businesses, have also taken a pounding.
Recessions, even prolonged and deep ones, do not hit all businesses equally. Domino’s Pizza is an example of a business that has been boosted by the recession as cautious consumers substitute a takeaway for a meal out. Cinemas have also been doing good business, although attendances may have boosted by the success of particular films. The supermarkets that compete on price rather than quality or service have also been doing well. On the other hand, the motor vehicle industry has been hit hard. And estate agents, never the most popular businesses, have also taken a pounding. In many respects, football has rode out the recession reasonably well so far. The latest Sky television deal has maintained its value, even if ITV and Setanta want to cut back their payments to the FA. Of course, a crunch time will come in the summer when fans decide whether to renew their season tickets. But with interest rates falling, many fans with mortgages have more money in their pockets. The real area under threat is corporate spending. Even if firms have the cash available, splashing it on corporate boxes and other forms of sponsorship may not generate the right kind of publicity.
Shirt sponsorship is under particular threat. A sense of proportion is necessary. There have been relatively few really big deals like that enjoyed by Manchester United with failed insurance giant AIG. Nevertheless, for a cash strapped club in the Championship, even a deal in the low six figures can help to keep the club afloat. Lower down the leagues, even five figure deals may make a worthwhile contribution to finances. Taken as a whole, current shirt deals are estimated to be worth £100m a year to English football. At present as many 20 clubs in the top two divisions are thought to be chasing shirt sponsorships. They range from relatively less glamorous clubs like Blackpool and Plymouth to Aston Villa, Newcastle and Manchester United. In the case of Manchester United, they are expected to pull in a sponsor to replace AIG willing to pay close to the club’s asking price of £20m. Manchester City are losing their £1m a year contract with Thomas Cook, but their new Arab owners are expected to be able to find a new sponsor in the Middle East.
Away from the leading clubs, the picture is more patchy. Bolton are in the fortunate positon of having a sponsorship agreement with Reebok until 2016, but it is thought that the sportswear company would be happy to move aside if a replacement could be found. Portsmouth are looking for a new deal, while relegation threatened West Bromwich Albion have played without a sponsor all season. Middlesbrough, also relegation threatened, are scheduled to lose satellite navigation company Garmin. Wigan need a replacement for the struggling JJB sportswear company, with both the team shirts and the stadium naming rights thought likely to be available. Hull City are expected to lose recession hit internet company Karoo. Newcastle United’s £5m a year deal with Northern Rock comes to and end this year.
Clubs in the Championship are even more at risk, given that there is less television coverage available – which is the main attraction to most potential shirt sponsors. Reading may be promoted, but still have to find a replacement for supermarket company Waitrose (who have their headquarters nearby). Cardiff signed a one-year £250,000 contract with a van hire company that expires at the end of the season – and white van hires have been hit hard by the downturn. Even those clubs who are able to extend current sponsorship deals may have to settle for less money. However, time is running out to secure deals. If replica shirts are to be manufactured with the new sponsor’s name ready for next season, that process has to start very soon. Of course, whether fans will be as willing to spend money on replica shirts sold at big mark ups as they have been in the past remains to be seen. Perhaps we will see a retro revival of rosettes as a means of demonstrating one’s allegiance! If you were really cash strapped, you could make one at home!