By Ed Kemp, marketingmagazine.co.uk, Tuesday, 28 April 2009 08:30AM
The prolific global expansion of English football's Barclays Premier League has steadily pushed up the value of the UK's shirt-sponsorship market.
However, with the advent of the economic downturn and some of the game's biggest sponsorship deals - Manchester United and Chelsea FC - drawing to a close, it has become a buyers' market.
‘There will no doubt be deals that will be completed for significantly less than the value reported,' says Mike Parker, director at Velocity Sports & Entertainment UK. ‘The purchasers will feel they have done deals at rates more affordable than previously.'
The global financial crisis has had a tangible effect on the sponsorship arena this season. West Ham was left temporarily sponsorless after holiday firm XL.com went bust. Elsewhere, Newcastle United has a tie-up with the beleaguered Northern Rock. West Brom was unable to find a brand willing to match its demands, and Manchester United's sponsor, AIG, had to be bailed out by the US government.
Such turmoil presents a stark contrast to the situation just three years ago, when the online betting market was starting to make its mark. Awash with cash, brands such as 888.com turned to shirt sponsorship as a way to reach core consumers. The most notable tie-up was Mansion's four-year, £34m deal with Tottenham Hotspur.
The change in circumstances is put into sharp relief by the findings of a study conducted last November by Sport+Markt. It revealed that the value of shirt sponsorship across Europe's elite football teams had dropped significantly for the first time in several years. English sides fared particularly badly, although this was due in part to a weak pound.
Smaller football clubs look particularly likely to struggle to maintain sponsorship deals at previous levels. However, not all are equal, as Gareth Moore, international sales director at Sport+Markt, points out. ‘Sponsors currently have to spend their money wisely,' he says. ‘Nevertheless, the bigger clubs across Europe can still put forward strong arguments not only for maintaining but even increasing the value of their shirt-sponsorship deals.'
Despite the downward trend, shirt sponsorship continues to serve many purposes, from brand awareness, the primary aim of airline Emirates' Arsenal deal, to customer loyalty.
More recently, several clubs have begun to use the space as part of CSR programmes. FC Barcelona, for instance, had always resisted ‘soiling' its shirts with a corporate logo. In 2006, it began to use the space to promote Unicef, while Premiership side Aston Villa's shirts carry the logo of children's hospice, Acorns.
‘Understanding of the brand's stakeholders' relationship with the club or sport is key to ensuring the right assets are secured to make shirt sponsorship more than "human billboards",' says Parker. ‘It presents brands a media platform that should
be viewed only as the starting point of their sponsorship programme.'
In a downturn, retaining customer loyalty is key. Signing a shirt-sponsorship deal seems one way to tip the balance in a brand's favour, if research conducted by Chelsea FC is anything to go by. It found that the propensity of the club's fans to buy Samsung products has shot up since the brand became its shirt sponsor in 2005.
As the 2008/9 season draws to a close, players and fans may be concentrating on a final push for glory. The attention of those in the boardrooms is more likely to be focused on commercial activities. For brands, looking to tap into a targeted and loyal base of consumers, football-shirt sponsorship could provide an increasingly affordable and effective platform.
This article was first published on marketingmagazine.co.uk