Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Posts Tagged ‘Sponsorship’

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?

Posted in Marketing, Revenues, Sponsorship | Tagged: , , | 7 Comments »

The battle of football’s ‘global brands’ – in Morocco

Posted by John Beech on August 31, 2011

Last year I blogged on the case of merchandising in Kenya, noting that while clubs such as Arsenal undoubtedly had a presence there, there was little sign of any commercial activity which they were benefiting from.  This summer’s trip to Morocco revealed a significantly different situation.

The overall impression of the top European clubs’ ‘presence’ is summed up in this graffito from Agadir:

And not necessarily in that order!  What of course was not clear was whether the author was a Moroccan or a Spanish tourist.  One suspects naturally the former as presumably a Spanish tourist is unlikely to have promoted both teams.

Certainly the sale of shirts and other merchandising was aimed at both residents and tourists.

[You can click on each of the images for an enlargement;
these four photos are from the souk in Marrakesh]

Observation would suggest that these items are largely aimed at tourists.  For Moroccans there was really only one shirt of choice – a Barca shirt, with in particular a skew towards Lionel Messi, and indeed all items Barca, official or otherwise.

Moroccan national team shirts were popular (but significantly less so than Barcelona shirts).  Although I spotted a couple of Arsenal shirts, and a single Rooney Manchester United shirt, the English Premier League was notable by its near absence.  Which raises the interesting question of ‘why?’.

Sadly I was unable to obtain a Moroccan equivalent of the Radio Times, but it seems likely that Moroccans have better access to La Liga matches than to Premier League ones.  It strikes me that Morocco is now a lost cause in the Premier League’s attempts at global merchandising hegemony.  Could it be that pushing up the price of broadcasting rights to their perceived maximum is actually going to prevent any Premier League clubs becoming truly ‘global brands’?  Once La Liga, Serie A or the Bundesliga has established itself as the league of choice in a particular country, I suspect it will be very hard to supplant.

And finally a promised mention of someone I met – Ken, a Welshman who lives in North London and is more than willing to spread the word:

Posted in Broadcasting rights, Merchandising, Sponsorship | Tagged: , , | 3 Comments »

Sepp Blatter’s already legendary Jim Callaghan impersonation

Posted by John Beech on May 31, 2011

Blatter’s demeanour at last night’s press conference was clearly one of defiance – it seems he really is blind to the mess the world governing body is in.  Mind you, if you watch again withe sound turned down (1), his body language is less self-confident – the ceaseless paper shuffling, and constantly tweaking the pair of microphones in front to him as if a pair of nipples had suddenly been thrust at him in some seedy nightclub.

The chances then of some serious reform of FIFA on his about-to-be-extended-unopposed watch are as remote as ever.  He is only vulnerable to pressure from outside stakeholders such as broadcasters and sponsors.  Broadcasters are unlikely to bother too much – the World Cup will be watched as eagerly by fans whether he or Caligula’s horse is in charge of FIFA.  Sponsors may yet prove more difficult to accommodate however, and there are already mumblings (2).  Sponsoring is not merely a questioning of gaining exposure for your brand – it only works effectively if there are shared brand values.  Interestingly, Coca Cola list their shared company values as ‘Leadership, Passion, Integrity, Accountability, Collaboration, Innovation, and Quality‘ (3).  It’s hard to see that the present circumstances are helping Coca Cola present their values of leadership, integrity and accountability much.  Adidas too will not be particularly happy bunnies this morning – they state on their webpage for Vision and Governance: “But leadership is not only about results, it is also about how success is achieved. We are accountable for the way we do business… We are committed to good governance“.  Not a great deal of brand synergy going on there at the moment either.

The one thing that can be said of Blatter is that he is a survivor.  Allegations that he acted corruptly date back at least to 2002.  As Nick Harris reported in The Independent nine years ago: “Sepp Blatter was yesterday accused by 11 senior Fifa colleagues of trying to buy votes to secure his re-election as president of football’s world governing body. The dramatic move could end the 66-year-old’s long career in the game.  In an unprecedented move in Fifa’s 98-year history, Blatter became the subject of a formal legal complaint filed in the Swiss courts by five Fifa vice-presidents and six other Fifa executive committee members.” (4)  Maybe we can’t expect too much in the way of sponsorship withdrawal as these allegation haven’t stopped them.

Blatter does have an Achilles heel nonetheless.  FIFA remains under investigation by Swiss federal authorities (5), as revealed by Matt Scott of The Guardian.  The Swiss may be more fussy than Adidas and Coca Cola when it comes to seeing their national ‘brand’ under threat.  Exemption from anti-corruption legislation for FIFA may well be lifted, especially as it applies to ‘not for profit’ organisations, an increasingly badly-fitting description for a body with reserves of almost three-quarters of a billion pounds (6).

One way or another, we shouldn’t expect a swift cleaning of the Augean stables, especially as Blatter is no Hercules.

Posted in Corruption, Ethics, FIFA, Governance, Public relations, Sponsorship | Tagged: , , , , , | 3 Comments »

A day of reckoning

Posted by John Beech on May 23, 2011

I managed to follow the great play-off between AFC Wimbledon (to whom, many congratulations) and Luton Town (to whom, commiserations) at least live online.  Football at its most exciting.  I wonder if Andy Burnham chose quite the right words though when he tweeted “Wimbledon back in Football League. Brilliant. A great victory for all football supporters over the money men. Well done to all at AFC.”  I’m sure he wasn’t referring to Luton as ‘the money men‘, although his comment would have been entirely appropriate if Wimbledon had beaten Crawley Town.

Yesterday, with the final day of Premier League games, unfortunately found me in the Tirol in a hotel room, arriving and logging on just after the games had started.  Heady stuff, and probably the most exciting afternoon in the PL all season.  As Alan Hansen was moved to write (1), “The big winner has been the Premier League itself, because this season has shown it to be the most exciting of the lot. ”  I’m not sure that I would enirely agree with his argument.

It struck me, particularly as I was feeling somewhat removed from the action, that it was distinctly odd that all the excitement was over who would or wouldn’t be relegated.  Aston Villa v. Liverpool, Everton v. Chelsea, and Fulham v. Arsenal were attracting very little attention from the twitterati.  Is this the grand scheme of things that the greedy breakaway Chairman of the old First Division envisioned some twenty years ago?  I came to the conclusion that in fact, yes, it was, had they bothered to think their plans through.  To me it is yet another symptom of what is wrong with the governance of English football.  Who is or isn’t relegated is clearly an important part of the general excitment of football, but it surely shoudn’t be the major focus.

The sacking of Ancelotti (2) because “this season’s performances have fallen short of expectations and the club feels the time is right to make this change ahead of next season’s preparations” to me provides yet more evidence of just how dysfunctional the Premier League has become.

Relegation from the Premier League undoubtedly puts serious financial pressure on a club.  When the drop in broadcasting revenues is netted off against the parachute payment, one is looking at a drop of £30m-£25m in revenues.  To this must be added a drop in matchday revenues (reduced attendance and lowered ticket prices) and a drop in merchandising sales, although these will vary from club to club, depending on the loyalty of their fans, in particular how large the core of ’till I die’ fans is.  Clubs may face a contractual drop in sponsorship fees, and may or may not have had the wisdom to include relegation clauses in their players’ contracts.  In other words, any club relegated faces a financial problem, but some may face significantly harder problems than those who had planned for the eventuality.  Clubs will also be in different states of financial health to start with.

Last week I was asked by BBC West Midlands to review the prospects for Wolves and Birmingham City should they be relegated.  On virtually every financial measure Wolves looked far more resilient to facing the drop than Birmingham City.  West Ham will undoubtedly face serious difficulties too, and only Blackppol look reasonably equipped to face the drop.

The Football League season is not quite finished, but further down the pyramid things are clearer with respect to next season.  AFC Wimbledon and Crawley Town are joining the Football league, the epitome of fan ownership and ‘benefactor’-induced financial doping respectively.  At the other end of the Conference National, it’s goodbye to Southport, Altincham (whose luck in benefitting from other clubs’ financial problems finally ran out, Eastbourne Borough, and Histon.  I’m sorry to see Eastbourne Borough go down as they were the most senior English club which is a Community Interest Company (CIC).  As an interesting aside, the Scottish Premier League may well have a CIC as a menber in the coming season – St Mirren (3).  This is a case that is well worth following, as the current owners are seeking to sell the club in a way that was  “making sure it remained sustainable and debt-free” (4).

Lower down the pyramid, the upcoming movements are plotted here.  Good to see resurrection clubs AFC Telford and Farsely on the way up.  It’s interesting to note that Ilkeston are listed as ‘reinstated’, good news for their fans following their resurrection (5), but I wonder what, for example, King’s Lynn fans or Grays Athletic fans will make of the reinstatement decision.

Finally I turn to a football story that is relevant to me in my immediate circumstances, but which does not seem to have well covered by the English-speaking  media, although due credit to Yahoo! Sport (6) for being an exception.  The story quite simply is that a major derby match between Rapid Vienna and Austria Vienna was abandoned after 26 minutes following a major pitch invasion – see here and  here.  Disturbing images that we hope we will not see moving further northwards and westwards.  After thirty minutes of disruption, the police felt unable to guarantee the safety of the players in a resumed match.  We seem to have moved onward from such dark days in England, and it was good to note the Birmingham City fans staying on at White Hart Lane to show what they had in common with Spurs fans (7).

Mind you, I suspect that “Thursday night, Channel Five” is not really going to catch on on the terraces.

Posted in Broadcasting rights, Costs, Economic impact, Fans, Football Conference, Governance, Merchandising, Premier League, Promotion, Pyramid movement, Relegation, Revenues, Sponsorship | Tagged: , , , , , , , , , , , , | 2 Comments »

Are our biggest clubs really global brands?

Posted by John Beech on December 9, 2010

You certainly notice the presence of Premier League clubs in Kenya (where I’ve just been on a somewhat delayed ‘summer’ holiday).

Can any Manchester United fan supply the vintage?

Curio seller in the middle of nowhere, Kenya. Can any Manchester United fan supply the vintage?

Well, of the predictable few.  Arsenal are, on the basis of an entirely unsystematic and unscientific survey of shirts and baseball caps and a pretty small sample, the clear number one English club of choice for Kenyan fans, followed not so far behind by Manchester United, with Chelsea a poor and third. That was it really. I did see Liverpool mentioned on a sandwich board outside a bookies, but no shirts. In fact the only other shirts were either local Kenyan clubs or Brazil.

The presence manifested itself not only through shirts, but also by slightly crudely painted club crests on cafés, and, in one case, the rather unexpected ‘Gunners Hairdressers’.  Presumably their Boro Primorac isn’t that popular with customers.

Apart from the fact that I found in yet another country only the famous few were present, two things struck me.

First, what did the clubs actually gain from their presence?  I would suspect that those wearing shirts had not contributed to direct sales, and that few Kenyans were avidly using the online club shops.  They certainly weren’t buying tickets for the games.  And how did a baseball cap with ‘Fly Emirates’ as the obvious feature do anything for Arsenal (as we passed, I didn’t even spot an Arsenal logo)?  Again only a suspicion, but I doubt that Arsenal have been leveraging up their price to Emirates on the basis of this particular exposure.  If there was any return, it was for the sponsor but not for the club.

Secondly, the presence of so many hand-painted logos might be seen as some sort of compliment to Arsenal, but the unlicensed use of logos said something about the nature of the clubs’ presence and the weakness of any commercial basis.  It was a kind of artificial presence.  The Arsenal or whichever brand did not have a presence on a par with that of a truly global logo such as Coca Cola.  And that’s probably the point – Coca Cola has an enormous presence in Kenya through their products and the infrastructure to support and develop the sale of their products.  Any unlicensed use of their logos would stamped on by locally-based Coca Cola staff,with the zeal of the IOC spotting that I had mentioned that event which is taking place between 2011 and 2013 in the UK capital by its conventional name.

Because of the lack of product presence, other than, that is, the intangible product presence through broadcasting, it’s hard to justify even the biggest Premier League clubs as global brands in any conventional sense.  The sale of official merchandising at the café (or hairdresser) can only be a dream.  The opening of Manchester United shops in the Far East, for example, is the first steps in becoming a truly global brand, but it is frankly just scratching the surface of an enormous potential market.  To be successful, these clubs will have to produce a radically different marketing mix with new 4Ps (product, price, place and promotion).

Posted in Broadcasting rights, Marketing, Merchandising, Sponsorship | Tagged: , , , | 3 Comments »

Au revoir les Bleus

Posted by John Beech on June 26, 2010

If Schadenfreude is your thing – and you are not French – then you would have enjoyed the last few days in France.  The ignominious departure of the lacklustre national team from the World Cup caused a positive hurricane of media outpouring.

On Tuesday, the press was already clear in its displeasure with events in South Africa.  Today in France led with:

‘Thanks and see you again’ was certainly tongue in cheek – the article begins ‘After six weeks of psycho-drama, there hasn’t been a miracle.

This is how Tuesday’s definitive loss to hosts South Africa was reported the following morning.  France Football went with ‘Death on the Field of Dishonour‘, showing the sense of understatement that you would normally associate with a British tabloid.

It was “The End of a World” according to top French sports newspaper l’Equipe.  Even le Figaro made the departure of Raymond Domenech its lead story, assuring its readers that his ‘retirement’ was approved by presumably the entire French nation.  He did himself no favours with the media – the French TV showed the clip of him refusing to shake hands with Carlos Alberto Parreira, South Africa’s manager, again and again and again.  His post-match interview might have seemed statesmanlike on the radio, but casually picking his ear took away sime of his gravitas on television.

Being of an academic disposition, I immediately conducted a survey to establish who exactly the French public saw as being responsible.  Admittedly a sample of just one – the owner of the bar in Granville where I was drinking – does not ensure statistical confidence, but he was unequivocal in his answer: “Everbody.  The President of the French Football Association, Raymond Domenech, all the players…

By Thursday morning the whole crisis had escalated:

An affair of state‘ it had indeed become.  President Sarkozy was supposedly spitting bullets, and Sports Minister Rosalyne Bachelot dishing out public bollockings.  She said that she believed it inevitable that French Football Association President will go.  FIFA has of course reacted angrily at to this perceived blatant interference by a government into football affairs (1).  Gerard Houlier is also featured in the story, although by this point Herself was becoming more reluctant to translate French press reports on football into English while on her holiday, so I’m not sure why.  As my bar-owner friend had said though, everyone is to blame.

While there are deeper long-running issues which have led les Bleus to the disastrous situation they find themselves in, the immdediate setting is the refusal of Ncolas Anelka to apologise for swearing at Raymond Domenech, Anelka being sent home as a result, the players then striking briefly, Evra grassing to the press, etc. etc.

Already there have been commercial repercussions.  The team has already lost its kit sponsor (2), and Crédit Agricole and fast-food company Quicktoday have cancelled their television adverts with the team (3).

How very different from England’s campaign.  Cheeky chappy John Terry had of course come close to becoming a ‘traitor’, as Evra was branded, but I like to think of him as a public-spirited whistle blower.  Well, it would be disloyal not to, wouldn’t it?  And England had apparently (I say ‘apparently’ because French television preferred to show the Algeria game) beaten Slovenia convincingly 1-0.  Of course I believe The Sun report which spoke of “renewed optimism after a performance which was a lot more convincing than the score suggests” (2).  I certainly hope so – a scoreline of 1-0 against a country of 2 million people which only became a country less than twenty years ago doesn’t strike me as particularly convincing.  Who knows, we may yet see Steven Gerrard, à la Theirry Henry, summoned to Downing Street to explain.

[Normal service is almost resumed.  I will be away in Austria next week for a funeral, but plan to get at least one more posting up before I depart.]

Posted in 2010, FIFA, Governance, Human Resource Management, Sponsorship | Tagged: , , , , | 2 Comments »

Protecting sponsors

Posted by John Beech on June 17, 2010

My third World Cup posting has resonances much nearer to home; just bear with me.

Ambush marketing – the piggy-backing of events by companies who are not official sponsors (there is an excellent overview of the phenomenon in sports events here) – hit the news at the last World Cup, with Bavaria, the Dutch lager producer, engineering the celebrated orange lederhosen stunt (1 if you are unfamiliar with this).

Bavaria (see, more free publicity – which I regret, but it’s too contrived to write ‘ a certain Dutch beer manufacturer) have capped that incident in spite of FIFA’s best endeavours to protect the official World Cup beer sponsor (am I alone in thinking that is in itself just a tad absurd?), Budweiser.  Forty women sitting together in orange minidresses became this World Cup’s version of lederhosen (2, and for the prurient who find the incident hard to picture 2)

Bavaria have certainly achieved some success.  A Google search on ‘FIFA world cup beer sponsor’ currently finds Bavaria (remember, they aren’t) squeezing out Budweiser (who are) from the number one slot.

The whole issue of ambush marketing like this needs to be seen from two perspectives.  First, there is the need to protect sponsors against it.  The case is a clear one from a business perspective.  An official sponsor expects exclusivity in their marketing campaign, and pays for it.  If the event organiser does not stamp out ambush marketing he is not providing what the sponsor has paid for.

The second perspective is how the organiser goes about the ‘policing’ of potential ambush marketing.  Obviously prevention is the best policy, but, when ambush marketing does take place, how can the organiser best retrieve the situation?  In a sense they are on a hiding to nothing – too little reaction, the ambusher will be encouraged to try again; too much reaction, and the ambusher will get additional free publicity.  FIFA are in danger of veering towards the second course.  They are pressing criminal charges (3), which is logical from their perspective, but this is giving the story legs (and bear in mind that we are talking shapely legs in minidresses), with two of the women on bail, with passports confiscated (4).  The fact that they do not return to court until June 22 ensures that the saga, with attendant publicity, drags on.

It seems unlikely that the women involved were entirely dewy-eyed innocents.  The stunt was highly organised, and has other ethical connotations as it seems to have involved the illegal sale of corporate tickets – ITV’s pundit Robbie Earle has already lost that job as a result, although it is suggested that he will not be charged (5).  The saga has now grown to the extent that the Dutch Foreign Minister has weighed in, “describ[ing] the arrests of the two women as “disproportionate” and said it was wrong that they could face prison for “wearing an orange dress” to the stadium.”  She rather misses the point – it isn’t quite as simple as ‘wearing an orange dress’ now is it?

FIFA are facing a lose/lose choice.  Go soft and the story will die, but sponsors will be reluctant to pay for sponsorship in the future; go hard and the sponsors will be happy, but the Dutch government will turn the two women into martyrs.  The real problem for FIFA, however, is that Bavaria face a win/win scenario.

What strikes me in all of this is the rather surreal nature of what is going on.  Understandable it may be from a business perspective, entertaining it may be, but should a major issue in football revolve around lager and minidresses?  Bovril and flat caps maybe, but not lager and minidresses surely.  ;-)  It is just another manifestation of the incongruities that commercialisation has brought to the beautiful game.

The example of commercialisation, protecting sponsors and English football that I mentioned at the beginning revolves around the awarding of a 2012 Olympic football venue to Coventry (6).  The surreal is summed up in the two opening sentences of the Coventry Evening Telegraph report:

COVENTRY’S Ricoh Arena has been chosen as the new Midlands venue to host Olympic football matches in 2012 after Aston Villa pulled out.

The home of Coventry City will be renamed the City of Coventry Stadium for the 2012 games and all branding will be removed from the stadium.

To Coventry people, and football fans throughout England, the newish home of Coventry City FC is ‘the Ricoh’.  Pulling down branding (and of course putting it up again a couple of weeks later) will make no difference to this, although it may well see Ricoh looking for a better price when sponsorship come up for renewal.  It has to be done to protect Olympic TOP sponsors such as Panasonic however.

Just a little bit hard to see how exactly the scurrying around on the roof of the Ricoh by workmen will be ‘helping to build a better world through sport’ though.  Commercialisation and sport make strange bedfellows at times.

Posted in 2010, Ethics, Marketing, Sponsorship | Tagged: , , , | 1 Comment »

 
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