LONDON // The Uefa European football championships kick off on Friday in Paris but it is the world’s top club teams’ relationships with Arabian Gulf brands that has proved a winning formula for both sides.
In an annual report exclusively obtained by The National and published today, the UK-based global consultancy Brand Finance says that the value of the world’s top 50 football team brands rose by 39.4 per cent over the past year, when measured in euros.
But the equivalent value of clubs either sponsored or owned by Gulf investors soared by 46.4 per cent – far exceeding the average.
However, keeping pace in an increasingly competitive game is a challenge for sponsors and clubs alike.
Etihad Airways, Emirates and Qatar Airways have pumped hundreds of millions of dollars into sponsorship deals with top-league teams such as the English Premier League’s (EPL) Manchester City, Arsenal and Spain’s Barcelona.
And it is paying off for both the home and away sides, the new research shows.
Brand Finance said in another report this year that the Emirates brand is now worth US$7.74 billion, or 17 per cent more than in 2015, retaining its rank as the most valuable name in global aviation. The Qatar Airways brand is worth $3.49bn, up 26 per cent on last year, while Etihad clocks in at $1.56bn, an 8 per cent rise.
Gulf sponsorship and ownership of clubs such as Manchester City and France’s Paris Saint-Germain has had a “game changing” impact, says John Brash, the founder and chief executive of Brash Brands, which has an office in Dubai.
“Would Manchester City have won the [2011-12 and 2013-14 EPL] without [Abu Dhabi’s] investment, and Etihad sponsorship? No. And it works in reverse, too – Emirates are reaping the rewards of a hugely successful viral advertising campaign for themselves, using on-pitch stunts of cabin crew playing football. It’s been a win-win partnership for a good five years or more now.”
Andrew Campbell, the managing director of Brand Finance Middle East, based in Abu Dhabi, says it is no coincidence that Gulf-owned and sponsored football brands are growing faster than others.
“The numbers speak for themselves,” he says. “The football brands backed by the Gulf have grown 7 [percentage points] more than the average. That does tell you something about the level of investment and activity of regional brands in football, which must be a good thing.”
Football deals are also helping to boost the UAE’s overall standing as a nation brand, Mr Campbell says.
“That investment strategy is paying off, both in terms of direct growth in the brand value of the investments, as well as the ‘halo effect’ of Etihad and Etisalat and so on being sponsors [of successful football teams with global presence] … That again creates a positive effect on the nation brand,” he says.
“The better the clubs do, the better the sponsors do. And then the better the clubs do, because the sponsors do better, they can charge more money for their sponsorship. And so it becomes, hopefully, a virtuous circle.”
The football clubs are indeed charging more for sponsorships – a lot more.
FC Barcelona in May signed a new 10-year kit agreement with Nike, which is reportedly set to bring in between €150 million (Dh626.1m) and €155m annually.
The Spanish domestic champions are also said to have had talks with Qatar Airways about extending its on-shirt advertising deal; Manchester United currently holds the crown for the biggest such sponsorship deal, thanks to its contract with Chevrolet worth a reported Â£53m (Dh282.5m) a year.
Finn Dowley, the sports marketing analyst at Brand Finance in London, says sponsorship values have “gone through the roof”. And while the Gulf brands have historically been big-hitters when it comes to sports sponsorships – Emirates, for example, signed a Â£30m-a-year deal with Arsenal in 2012 – it remains to be seen whether they will keep pace with the global inflation in the market, he adds..
“With Manchester United’s deal with Chevrolet, and Chelsea’s deal with Yokohama which is Â£40m, it will be interesting to see if Emirates goes further and matches these new deals,” he says.
Another factor boosting the coffers of EPL clubs is the huge amount of TV cash that clubs will receive from next season. Because Brand Finance factors in teams’ future earning potential, this has seen English clubs rise more than most in this year’s brand valuations, Mr Dowley says.
“The Premier League broadcasting revenue goes up … a little bit over 50 per cent. For example, the [EPL] winner this year, Leicester City, got just under Â£100m. Next year the winner will get between Â£150m and Â£160m. “So we’re starting to see the top 20 [teams globally] particularly be dominated by Premier League clubs, and some of the major clubs from Spain, Germany and France slide down the table a bit.”
But as the sums of money commanded by the top football teams escalate, some point to the sponsorship opportunities lower down the leagues.
Mr Brash points to the recent victory of upstarts Leicester City as EPL champions as an example of the potential here.
“The formula used to be clear: the GCC’s biggest brands, backing football’s biggest teams. But then you get Leicester winning the EPL,” he says.
“So maybe there’s a new opportunity: for GCC challenger brands to back football’s challenger teams. Is the field now open to the next tier of regional brands?”
As with everything in the beautiful game, predicting any outcome is a perilous task.
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