The changing face of Premier League shirt sponsorship
Posted by John Beech on September 15, 2011
The news the other week that Manchester United had secured a lucrative sponsorship deal with DHL for their training kit (1) rather caught my attention. It wasn’t the unique (?) case of training kit being sponsored – I would expect this to be a one-off, with all new shirt sponsorship deals having a clause requiring exclusivity over all shirts. It was the fact that a global courier service was the sponsor. Their business is truly global, they have previously sponsored sport (2), and a Premier League club would give them global ‘reach’. No doubt we will see UPS signing up next season – they too are already into sports sponsorship (3). They actually offer a handy application form on their website – commercial managers of football clubs get typing!
The news that QPR have finally signed up not one but two shirt sponsors (home/away kits) (4) allowed me to complete this season’s entries into my Premier League shirt sponsorship database. More on this in a second, but I must warn you that the official QPR website has followed the Times in charging for content other tasters – a distinctly retrograde step and hardly fan-friendly. Do these clubs need ‘naming and shaming’?
Two initial views of the data show some interesting trends. First, some data on the country of the sponsor. The graph is a tad grainy as presented I fear, but clicking on any of the images will open it up to a rather more legible size (I kept them small on the posting itself so as not to slow downloading).
Very broadly there seem to be three periods apparent: from the start of the Premier League a steady-state period to roughly to the end of 1997/98, with sponsors falling roughly equally into the UK and foreign categories; a period from then until 2006/07, when foreign sponsors started to turn away, before starting to return; and the most recent period, showing a return to a roughly equal split. I would have to admit that I can’t see a simple obvious reason for this trough of foreign sponsorship in the middle period. Do any readers have any thoughts on this?
While the Premier League began with almost half the clubs sponsored by locally-based companies, there has been a slow but steady decay. This I would simply attribute to the rising cost of shirt sponsorship, with foreign-based multinationals better placed to pay higher fees than the likes of, for example, the splendidly named Reg Vardy Motors, sponsors of Sunderland roughly a decade ago, and now part of Evans Halshaw.
It shouldn’t be assumed that ‘local’ necessarily means a UK company. For example, Peugeot sponsored Coventry City for their first five years in the Premier League – the Peugeot 206 was at that time built at their Coventry site.
Secondly, data on the sponsor’s sector.
The graph shows the four most frequently occurring sectors over the two decades. Financial services are just the largest grouping at 13.5%, closely followed by breweries at 12.8%, although, if the breweries are combined with the occasional sponsorship by spirits and cider manufacturers, alcohol manufacturers, with a combined total of 13.8%, slip into top spot.
It’s clear that financial services have grown steadily as sponsors over two decades, but gambling, the Johnny Come-Latelys of PL shirt sponsorship, is very much in the ascendancy. Together the two sectors now sponsor 13 of the 20 clubs. The early days of the Premier League saw a much greater diversification among shirt sponsors.
Finally a look at the Top 4 v. the rest of the Premier League clubs. One would expect the clubs which have pretensions of being global brands to attract global sponsors, and this is indeed the case.
By playing more televised matches, especially when qualifying for the Champions league, the Big 4 have consistently attracted more foreign sponsors than the other clubs, generally two to three times more. By being able to play a global market in attracting sponsors, they have been able to push their sponsorship charges up, and so increase their financial muscle. There is thus a double effect of reinforcing their dominant position, by greater TV revenues and by greater sponsorship revenues. Whatever happened to competitive balance?
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Dave said
Couple of observations John:
1) What’s foreign? A company where the head office is registered abroad? A company who don’t have a trading history here? A company who have bought a UK-based firm who have sponsored a club etc? I ask because given the dataset is quite small, these nuances make a difference, particularly in relation to my next point.
2) Why did foreign sponsorship fall? Maybe English companies were on the cusp of a boom where cash was flowing and credit was practically free. It might have been more that English companies won bidding wars because they had access to cash and were prepared to spend, whereas at that point , foreign sponsors were too unsure of benefits to keep pace. By 2003-4, they’ve become convinced and have come back to blow the English sponsors away. Obviously, that creates a new level of analysis, which is the level of sponsorship being received. My feeling is that by 2005-6, English companies – like English owners – can’t keep up with market rates.
3) Whilst local has declined, it’s not disappeared – it would be good to see who these clubs were; my expectation would be the locals would be over represented in the clubs newly promoted.
John Beech said
Many thanks for that Dave – good to hear from you. My thoughts/responses are:
1 – In the vast majority of cases, as with Reg Vardy Motors, as a UK example, or Samsung, as a foreign example, it’s not contentious. In a few cases, yes, it is a close call. Where there was a degree of imprecision hinging on definition, I tended to opt for where the company website was presenting itself as being based, thus avoiding the issue of, say, legal ownership being somewhere behind the British Virgin Islands – it would have been much more contentious if I had been looking at the clubs themselves!
And you’re right about the small numbers. The apparent dip in foreign sponsorship of the Big 4 in the last couple of years, for example, is because of Liverpool’s switch from Carlsberg to Standard Chartered, who I defined as UK, but probably they need another category – ‘Totally global player which just happens for historic reasons to have its head office in the UK’.
2 – A very plausible theory. I would certainly agree that it is to do with changing economic circumstances. I can’t see any obvious reason to do with the English game, which might have been the case in the 1980s for example.
3 – Without doing the systematic trawl through the data, I suspect you are right. Which is interesting, as it implies that ‘local’ will always be there so long as promotion and relegation are.
Dave said
A rejoinder the your 3) – I’d suggest local will be there by default as long as the exposure meant global wasn’t; I’d have thought over the last 5 years, a group of clubs in the Championship would have seen greater global sponsorship as those clubs take a punt on what could be cheaper access. Even in such a world, part of it is self-definition too. Clubs could choose local if the price is broadly right even if there was competition.
John Beech said
FL shirt sponsorship is definitely worthy of research, and I hope to go down that route. It’s a massive task though, especially if I’m going to cover the same time period. So don’t expect any quick results!
I particularly like your last sentence by the way.
Dave said
That’s the social value stuff isn’t it – the difference between the money spent locally and the potentially larger sum non-locally is received back as goodwill over time.
Charlie said
I don’t want to make my head hurt by thinking about it too much about it but I doubt there’s much penetration of foreign shirt sponsorship in the FL, or ever has been. It’s all about the prestige of national recognition even if the rewards are only similar to the (cheap) local offers. I’m sure Ginsters are happy to have escaped my basket case of a club whilst we revert to the local timber merchants.
As an aside, I’m occasionally seen out in a shirt with DHL plastered across the front, my Cape Stormers Super XV rugby shirt from last season. They must have decided not to pin their colours to one sport exclusively now.
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