business in football

The Beautiful Game to the Beautiful Business.

BUSINESS IN FOOTBALL

Known worldwide as “The Beautiful Game”, the greatest game in the world has transformed drastically. The sheer volume of money being pumped into football is no secret, making it a  marketers dream. Business in football and in fact marketing in football, at one time only consisted of shirt sponsorships. But due to its commercialisation and its monetary value to businesses, it has become much more than this.

In this article I will be looking at how business in football has evolved over time to transform the greatest game in the world, to one of the most profitable.

SIMPLER TIMES

Marketing in football used to be quite simple. You had your team’s shirt and a shirt sponsor, that was it. This was a time when there simply wasn’t money in the game.

1993 marked the dawn of a new age in the world of Football Click To Tweet

Television deals were brokered to pump massive sums of money into the Premier League and the Champions league. Sky television were to inject £300 million to cover close to 60 games over a 5 year period. Lucrative TV deals would soon follow for other leagues, but nothing in comparison to these.

business in football

Before this deal BBC sport along with ITV paid peanuts for the rights. Sky’s cash injection meant that the top 22 teams would ultimately  be able to organise their own sponsorship deals. And thus the birth of modern day football.

MONEY TALKS

15 years on and the Premier League football rights would set you back about 8.3 billion pounds. A significant increase from the initial 300 million. With the rise in the TV licensing fee came arise in costs. Your average premier league player is now earning a cool 2.2 million pounds a year. With some players like Manchester United’s Wayne Rooney, earning over 300,000 pounds a week.

business in football

With the global exposure that football teams all over the world were receiving – Businesses saw this as an opportunity to align the fan base of a particular team with their brand. The jersey is almost a walking billboard, as fans walk around bragging about their team in the latest strip boasting a company’s logo front and centre.

Football teams now being run as businesses, have realised the value of their “walking billboards” and are cashing in. Shirt sponsorship can generally be split into 2 categories.

  • Kit Producers – Adidas, Nike, New Balance etc.
  • Corporate Sponsors – Chevrolet, Standard Chartered, Emirates etc.

To give you an idea of how much these deals are worth, Manchester United recently put pen to paper with German giants Adidas. The deal would see the Red Devils receive a staggering 750 million pounds over a 10 year period. This combined with their corporate sponsorship deal with Chevrolet that is rumoured to be worth 559 million dollars over a 7 year period, shows you the monetary value that marketers put on football.

BUT WALKING BILLBOARDS WEREN’T ENOUGH

Shirt deals simply weren’t enough. Marketers in the footballing world saw an opportunity to expand their reach and they did. Shirt deals became… Naming rights.

business in football

As teams expanded so did their stadiums. New stadiums proceeded to be built and companies swooped in at the chance to get the amphitheatres named after and associated with their brands. In England you have:

  • Arsenals – “Emirates” Stadium
  • Manchester City’s – The “Etihad”
  • Leicester’s – “King Power” Stadium

Of course this is not unique to England as across the world you have these kinds of deals in place:

  • Germany: The “Allianz” Arena – Bayern Munich
  • Germany: “Signal Iduna” Park – Borussia Dortmund
  • Ireland: The “Aviva” Stadium – Irish Football/Rugby Stadium
  • France: The “Allianz” Riviera – Nice

Arsenals deal with Emirates is said to be worth 150 million pounds keeping the airlines name on Arsenals stadium until 2028 and as a kit sponsor for another 5 years.

DON’T HATE THE PLAYER

The massive amount of revenue available to clubs allowed them to use it to strengthen their teams by signing stars of the game.

In 2009 Real Madrid set a world record transfer fee as they signed Cristiano Ronaldo for a reported 80 million pounds from Manchester United. The Portuguese winger was presented in front of a packed 80,000 seater Santiago Bernabeu stadium.

business in football

Figures in 2010 suggested that 1.2 million jerseys brandishing the “Ronaldo 9” had been sold in the Spanish capital along with a substantial amount worldwide. Experts predicted that Ronaldo would more than recoup his transfer fees in jersey sales alone, along with his performances on the pitch. The value of marquee signings has evolved greatly over the years as players become more commercialised by the day.

It took 7 years for Ronaldo’s record transfer fee to be eclipsed and the comparison of how both situations played out shows just how big an influence businesses are having on the world of football.

POGBACK

It was the pair of Manchester United and Paul Pogba that broke  the world record transfer fee set by Ronaldo. In this case it’s not the fee and certainly not the player that intrigues. The manner in which Manchester United announced the signing shows the evolution of outside influence in the game.

business in football

Manchester United took to social media with the hashtag “POGBACK”, to announce the return of the player they let go for a tiny fraction of the price they paid to resign him. Adidas were said to play quite the unique role in the transfer as they stood to benefit massively from any possible deal.

Adidas took it upon themselves to initiate the transfer saga. They created short, shareable videos with UK grime star Stormzy. The initial videos featured Stormzy, dressed in Manchester United gear, rapping about false newspaper gossip, with samples of one of his best known releases, ‘Shut Up’, interspersed throughout.

business in football

These were then followed by similar videos of Pogba himself. Growing annoyed at the newspaper’s talking about him, once again using Stormzy’s ‘Shut Up’ samples. By referencing the endless clamour of news outlets attempting to be the first to break the story. Adidas capitalised on the frustrations of fans awaiting an announcement.

Adidas then “Accidentally” leaked a video of the two performing together, forcing Manchester United’s hand as they announced it officially the next day.

POGBA AND RONALDO, THE DIFFERENCE.

While Cristiano Ronaldo had apparently paid back his transfer fee in jersey sales and continues to prove his value on the pitch, this is not the same for Paul Pogba.

Pogba’s fee cannot be recouped by jersey sales due to a clause in Manchester United’s contract with Adidas and he certainly hasn’t been repaying it on the field. The French International has provided only 4 goals and 3 assists in his 1st season, a massive disappointment. So where is the value in the Frenchman?

business in football

Manchester United are said to have had other ideas for the player who is touted to be the most marketable player in the world.

Ed Woodward is the current Executive Vice Chairman of Manchester United’s board. The former accountant and investment banker, renowned for his prolific business acumen, has set his sights on expansion in the far east. With the region being one of the quickest expanding economies in the world, Woodward and Manchester United were said to have planned on expanding out there through the use of Pogba and Zlatan Ibrahimovic’s names. Should a plan like this be successful, it would create steady revenue streams for Manchester United for years to come.

THE BEAUTIFUL GAME OR A PROFITABLE BUSINESS?

The fact that Manchester United bought Pogba for footballing reasons in unquestionable. But, there can be no question that money talks. And making it has become almost as big of an agenda in the game as performing on the pitch.

Signings like Pogba, Naming rights and Shirt sponsorships have all evolved from a simple, single purposed act. Now all of these elements are combined into what has become a marketing mix. They work together to generate revenue for their parent club. Which they hope will allow them to expand and become more successful.

The difference in the unveiling of Pogba and Ronaldo was staggering and there was only a 7 year gap between the two. The influence Big Business is having on the game will only get bigger. There is just too much money to be made.

It’ll be interesting to watch the next evolution of the game that is no longer just “The Beautiful Game”. This is Business in Football.

business in football

 

Conor O'Keeffe is our content intern at How Great Marketing Works. He joins us from CIT and is exploring what it means to be a marketer and how his passion for words can build his career. We're delighted to have him here and appreciate his unique perspective on marketing.

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