Premier League big guns missing out on sponsorship income
Premier League giants Liverpool and Manchester United are failing to get fair market value (FMV) for their front-of-shirt and sleeve sponsorship agreements.
According to a recent study by sports business experts The Sponsor, the north west rivals appear to have been selling themselves short in the sponsorship stakes.
By contrast, Aston Villa’s lucrative £40 million deal with an online gambling operator is a whopping £13.6m higher than the club’s FMV.
Several UK online casinos have forged strong links with Premier League clubs, but they are required to pay a premium for the global coverage provided by the English top flight.
Nottingham Forest’s situation is similar to Villa’s with their sponsorship deal with an iGaming company valued at more than double the club’s FMV of £5.2m.
While the two Midlands clubs have maximised their sponsorship potential, Liverpool and Manchester United surprisingly have plenty of room to increase their income.
Liverpool have been widely lauded for their commercial prowess in recent years, with the club forging strong links with some of the world’s biggest brands.
However, despite the study placing Liverpool at the top of the Premier League standings in terms of brand value, the club could be missing out on £15 million annually.
“Despite missing out on the Premier League title, Liverpool’s qualification for next season’s Champions League competition ensures the club and its sponsors, Standard Chartered, gain significant brand exposure next season,” The Sponsor’s report said.
“Liverpool’s value as a sponsorship asset is not limited to their on-field success and media exposure. Our research shows brands that partner with Liverpool benefit significantly from association with one of football’s most successful clubs.
“Liverpool is a culturally relevant football brand in terms of fan engagement, star power and action towards social causes, which sponsors place considerable value on.”
Man United are the biggest losers in terms of lost sponsorship value, with their £47m annual deal with TeamViewer valued at £17.5m below FMV.
Given the Red Devils’ massive fanbase and global reputation, it appears that their commercial department may be guilty of underselling the club.
While Liverpool and Manchester United are falling short in the sponsorship stakes, the same cannot be said for numerous other Premier League clubs.
They include Crystal Palace and Wolverhampton Wanderers, who have recently announced club-record deals with companies in the online gambling industry.
Palace will feature an Asian operator’s brand on the front of its shirt, while Wolves will be working with a Southeast Asian gambling firm as their principal sponsor.
While the value of each of the deals has been kept under wraps, they are reportedly above the FMV for Palace and Wolves. This mirrors other betting sponsorships in the Premier League.
The ongoing relationship between Premier League clubs and iGaming brands has undoubtedly been mutually beneficial for both parties.
Clubs not only benefit financially, but they can also use the partnerships to increase fan engagement through special promotions linked to their participation in the Premier League.
The iGaming companies gain instant access to a captive audience, which helps them build sizeable customer databases and significantly increase the profile of their brand.
The results from the study paint an intriguing picture for Premier League clubs, particularly those which have not forged strong links with the iGaming sector.
Given how several clubs have benefitted from their partnerships with the sector, it would be no surprise to see others explore the possibilities in this area in the future.
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