Last Updated on: 22nd November 2023, 01:45 am
The Sponsor, a prominent publication for professionals in sponsorship marketing, has unveiled its Sponsor Power Index, an extensive study that assesses the value of shirt sponsorships for every Premier League club. This research examines factors such as reputation, awareness, and societal contribution to determine the fair market value of each sponsorship. The findings reveal that while some clubs strike lucrative deals, others are left with undervalued agreements.
The most notable discovery from the study is the record-breaking valuation of Manchester City’s sponsorship, amounting to £72.8 million. This valuation surpasses their current deal with Etihad, which is worth £67.5 million annually. Although the previous deal expired in 2021, Manchester City has extended it year by year while searching for a partner willing to meet the increased valuation.
Sean Connell, the Editor of The Sponsor, commented, “Manchester City’s appeal to commercial partners extends beyond their success on the pitch. Our data demonstrates that the club’s value is reinforced by its cultural significance, reputation for innovation, and its engagement with fans. Additionally, Manchester City contributes positively to the community, the development of the game, and society as a whole. These factors are crucial considerations for sponsors looking to enhance their brand image and gain awareness.”
Headlines:
- Newcastle United’s Sponsorship Value Rises by 78% but Falls Short of £25m Deal with Sela.
Newcastle United’s fair market value is calculated at £17.4 million, falling £7.6 million short of their sponsorship agreement with Sela, a company supported by Saudi-backed events. This disparity raises questions about the legitimacy of the deal. Despite a significant increase in value due to their qualification for the prestigious Champions League, Newcastle United still faces challenges in terms of cultural relevance, engagement, and contributions to society. These factors limit their overall sponsorship potential. To justify the multi-year deal with Sela, the club must demonstrate that it is an investment in their future.
- Manchester United’s Sponsorship with Team Viewer Undervalued by £12.2m Annually.
The fair market value of Manchester United’s sponsorship is revealed to be £54.5 million, exposing the extent to which the current deal with Team Viewer falls short. The club is currently seeking a new commercial partner to replace the German software company, as the initial sponsorship decision was criticised for its “appalling judgment” by investors. Although replicating the previous £65 million per year deal with Chevrolet may be challenging, Manchester United should command a higher fee from any new sponsor. The Sponsor’s analysis indicates that no other club surpasses Manchester United in terms of longevity and historical success, making them an ideal partner for brands looking to showcase their own history and quality to a global football audience. With improved performances and Champions League qualification under Erik Ten Hag, Manchester United is expected to regain its position as the league’s highest-earning club in terms of sponsorship fees.
- West Ham’s Victory in the Europa Conference League Boosts Annual Sponsorship Value by £8.5m.
West Ham United receives positive news following their remarkable triumph in the Europa Conference League, as it not only brings silverware but also a significant financial boost. The club’s victory in the tournament increases their annual sponsorship value by an impressive £7.1 million, further enhancing their commercial success. This achievement adds a glorious chapter to the club’s history, elevating their perceived quality in the football world. The increased reputation, coupled with notable contributions to society, makes West Ham an attractive partner for potential sponsors. Additionally, the successful European qualification resulting from their victory in the Europa Conference League ensures extended brand awareness. Competing on the European stage offers valuable exposure and opportunities for the club and its sponsors to reach a wider audience. This increased presence on the continental stage opens doors for potential sponsorship deals and partnerships, enabling West Ham to establish stronger connections with local and international brands. Although the club’s current deal with Betway, worth approximately £10 million per year, is set to expire in 2025, their continued on-pitch success may require Betway to increase their investment significantly or risk losing a premium sponsorship asset to another brand.
- Chelsea’s Fair Market Sponsorship Value Plummets by Nearly 60%.
Chelsea’s forgettable season has severely impacted their ability to attract and retain high-value sponsorships, especially considering the challenging and competitive economic climate. As their deal with Three comes to an end, Chelsea finds itself in search of a new partner. The absence of any form of European football next season means that sponsors will reach significantly fewer people compared to previous seasons. Consequently, Chelsea’s fair market value diminishes to £16.9 million, well below the £40 million offered by Three. In the upcoming season, both Manchester United and Aston Villa are expected to offer sponsors greater brand awareness, as they also seek new front-of-shirt commercial partners. However, Chelsea can leverage its existing brand reputation, which includes high scores for cultural relevance, innovation, and history. The club’s strong social following, fan relationships, and star power, particularly with global icon Mo Salah, contribute to its cultural relevance. Chelsea also leads the pack when it comes to social contribution, with their foundation donating £6.5 million, surpassing other Premier League clubs. Although last season was disappointing, Chelsea’s reputation and history suggest that their performance can rebound. If a sponsor is willing to pay above the fair market value to associate with the club, it would be a gamble based on the assumption that the previous season was merely an anomaly for a team that typically secures a place in the Champions League.
- Nottingham Forest Holding Out for £10m Shirt Sponsorship Despite Fair Market Valuation of Just £3.9m.
Nottingham Forest’s search for a £10 million annual sponsor may prove challenging, as their fair market assessment values the sponsorship at only £3.9 million, with only Luton Town receiving a lower valuation. While all Premier League teams command significant sponsorship fees due to brand awareness and viewership, the competition among clubs to secure those fees in a difficult economic climate intensifies. When compared to other Premier League clubs, Nottingham Forest ranks at the bottom in almost all measures. For instance, their social media following is among the lowest, only surpassing newly promoted Burnley, Sheffield United, and Luton Town in terms of engagement among the fan base. The club’s current player roster lacks star power compared to other teams boasting players like Pickford, Zaha, and Diego Costa with his 7 million followers. Furthermore, Nottingham Forest receives low scores in terms of community contribution, charitable donations, and environmental initiatives—areas of increasing importance to potential sponsors. On the pitch, Forest finished the season on a strong note, but their 11 televised games fell significantly short of the Premier League average of 32. Sean Connell, the Editor of The Sponsor, acknowledges Nottingham Forest’s impressive upward trajectory in terms of Premier League survival. However, until the club improves its off-the-field performance to match that of its peers, the £10 million sponsorship valuation remains unrealistic.
- Brighton and Aston Villa Benefit from European Qualification, while Liverpool and Tottenham Experience Declines in Sponsorship Value.
European qualification has significantly increased the fair market value of Brighton and Aston Villa, with their front-of-shirt sponsorship values rising to £12.5 million and £11.1 million, respectively. American Express, Brighton’s sponsor, signed a 12-year deal in 2019, valuing their annual shirt sponsorship at £8 million. Aston Villa, with their current deal with Cazoo expiring this summer, stands to capitalise on their increased sponsorship valuation. The club can offer sponsors greater brand exposure compared to many other Premier League rivals, drawing from West Ham’s success in European football as a case study. However, Tottenham’s failure to qualify for any European competition significantly reduces their value to long-term sponsor AIA. Spurs’ fair market value for the upcoming season stands at £26.9 million, well below the reported annual payment of £40 million by AIA. Liverpool, with their longstanding sponsorship deal with Standard Chartered worth £50 million per year, falls short by £12.2 million according to the fair market value. Nevertheless, Standard Chartered remains satisfied with the partnership as Liverpool scores highest in terms of cultural relevance, boasting a strong social following, fan relationships, and star power, especially with the presence of global icon Mo Salah. These factors, combined with Liverpool’s reputation for history and success, alleviate any concerns regarding sponsorship.
Methodology:
The Sponsor’s research methodology for determining the fair market value of each Premier League team’s sponsorship combines real-world sponsorship deals reported by The Athletic with The Sponsor’s comprehensive sponsorship scorecard. This unique approach incorporates metrics that evaluate reputation, awareness, and contribution to society, with a stronger emphasis on awareness measures. Factors such as the club’s history, quality, cultural relevance, innovation, social following, digital presence, infrastructure, on-field performance, TV audience data, fan demographics, fan engagement levels, behavior towards fans, community involvement, environmental initiatives, and role in developing the game are considered. By combining insights from The Sponsor’s scorecard with reported sponsorship deals, regression analysis allows for the accurate calculation of fair market values, providing sponsors and football clubs with valuable information for their decision-making processes.
