Football is undeniably a global product, capable of churning out obscene amounts of profits for those with pockets deep enough to invest in the beautiful game. The World’s most popular sport has undergone a dramatic transformation in recent years, a period characterised by significant commercialisation, resulting in a game almost unrecognisable from its traditional roots.
A football stadium once provided an escape from the daily grind for the working-class supporter. A venue comprising bricks and mortar, embedded at the very centre of the community, a place where local supporters could meet on the terraces to cheer on their heroes. Nowadays, it is arguably more reminiscent of intellectual rather than physical property, targeted for leverage by corporate conglomerates in the pursuit of financial return and brand awareness. The 1990’s ushered in a new era of football, one defined by lucrative broadcasting deals, club sponsorship deals and seemingly an abundance of investors queueing up to dabble.
There is no doubt that football clubs are becoming increasingly inclined to capitalise on any prospect of investment with many even willing to sell their stadium naming rights to the highest bidder. Yesterday’s football icons are most likely to be turning in their graves. Heroes such as Sir Stanley Matthews, one of the finest players ever to wear an England shirt, who played in the top tier until he was 50 years old. His ashes may be buried beneath the centre circle at Stoke City’s current bet365 Stadium (previously named the Brittania, after the building society), but his soul must surely rest at his beloved Victoria Ground, their previous home for 115 years. Interestingly, bet365 not only enjoy stadium naming rights but also own the club, having saved them from extinction and invested heavily to secure English Premier League (“EPL”) status from 2008-18.
A 2019 study by Duff & Phelps provides details of the value of EPL stadium sponsorship deals and suggests that the majority of clubs are in fact failing to utilise their naming rights to realise their full potential with only 30% of clubs utilising a stadium sponsor during season 2018/19. Leading the pack was Manchester City, the reigning EPL Champions who are owned by Sheikh Mansour, a member of the United Arab Emirates’ Royal Family. In order to offset startling levels of spending during Sheikh Mansour’s tenure, Manchester City have signed several lucrative sponsorship deals, most notably with Etihad Airways worth a staggering £400 million over ten years. The Guardian (2011) refers to the deal, which saw City’s stadium renamed ‘The Etihad’. It is reported that the value of the deal is unlike anything seen before, not just in football terms but in sport in general and certainly more than double the previous record. However, the deal garnered much criticism and captured the attention of European football’s governing body UEFA. It is no secret that Etihad Airways, the UAE’s national airline, is owned and operated by one of Sheikh Mansour’s close family relatives and this has raised questions on whether the deal truly did represent fair value.
Of the 20 EPL clubs competing in the 2018/19 season, Duff & Phelps cite City’s close neighbours, Manchester United, as having the potential to secure the most lucrative of stadium sponsorship deals. However, United have reiterated that they have no intention of selling the rights to Old Trafford, surely much to the delight of Sir Bobby Charlton? There is no denying that United possess huge commercial clout but during a period when performances on the pitch have fallen short of fans’ expectations, selling the stadium naming rights to the money men may prove counter-productive in the club’s attempt to restore the faith of its fans. It is estimated that the EPL’s ‘big six’, namely Manchester City, Liverpool, Chelsea, Tottenham Hotspur, Arsenal and Manchester United account for 82% of the total naming rights earnings potential for the league.
Although there has been a limited uptake in stadium sponsorship by EPL clubs, Duff & Phelps argue that their counterparts in continental Europe’s elite leagues have been far more active. Germany’s Bundesliga boasts Europe’s most commercialised stadium naming rights market, with over 80% of stadiums already sponsored. Financial services institutions dominate the German market, many of whom compete to win naming rights contracts with the intention of leveraging their consequent sponsorship to entice the clubs into partnerships. They use this partnership to sell their products and services to the club, including “team” themed debit and credit cards to club supporters.
Perhaps the highest profile stadium in Germany is the Allianz Arena, home to the country’s most successful side, Bayern Munich. However, this isn’t the only stadium emblazoned with the Allianz name but simply one asset in an ever-growing portfolio of naming rights the insurance giant continues to systematically develop. Most recently, Allianz acquired the naming rights to Juventus’ stadium in Turin. The deal between Allianz and Juventus, fortunately for the former, coincided with the club’s signing of 5-time Ballon D’Or winner Cristiano Ronaldo. The superstar’s signing earned Allianz a gateway to a global following with Ronaldo recently becoming the first Instagram user to surpass 2 million followers with Allianz Arena name being often used in related pics and game comments.
Closer to home, the Scottish leagues are trying to keep up with their illustrious neighbours south of the border and on mainland Europe. Whilst the Tony Macaroni Arena and the Cheaper Insurance Direct Stadium may not instantly exude a similar level of glamour, they most definitely succeed in offering local sponsors the opportunity to connect with their target markets, albeit on a different scale!
Clearly, stadium naming rights offer large corporates a platform to enhance their brand and promote their products and services to a legion of supporters both local and international. Yet again it’s just another neat example of where IP rights can be monetised in local and global markets yet can attract controversy and perhaps create tension between owners of the IP rights and the purists!
Author: David Holborn, Analyst