As the world’s most popular sport, football offers investors a chance that no other sport can – a true global audience. The world’s top clubs in Europe boast the sport’s most expensive real estate for marketing; that being per square inch on the club’s kit. A recent article from Forbes lists the top five most expensive kit sponsorship deals:
- Manchester United – Chevrolet ($80 million per year)
- Barcelona – Qatar Airways ($38 million per year)
- Bayern Munich – Deutsche Telekom ($37 million per year)
- Liverpool – Standard Chartered ($33 million per year)
- Real Madrid – Bwin ($29 million per year)
Manchester United signed a deal with Chevrolet in the summer of 2012, replacing its current sponsor AON whose contract runs through the 2014-15 season. The deal is for 7 years and worth a reported $559 million in total. United are supposed to get $70 million in the first year of the deal, with the yearly earnings increasing by 2.6% annually. In an ESPN article from this past summer, it was stated that they also stand to gain a reported $18.6 million in annual fees for both the 2012-13 and 2013-14 seasons (Click here for the full article). According to Forbes, the Chevrolet deal was so expensive that GM’s former CMO, Joel Ewanick, lost his job because he misrepresented the true value of the deal to GM top management.
Barcelona FC agreed to terms with Qatar Airways last month to have its first ever commercial kit sponsor (other than a non-profit organization) in the club’s 100+ year history. An article from Gulf News on March 4th stated that the $38 million, 3-year deal starts on July 1 of this year, replacing the current deal with the Qatar Foundation, which Qatar Airways coincidentally owns (Click here for the full article).
The only German club on the top 5 list, Bayern Munich, signed its current sponsorship deal with back in 2007, but agreed to an extension with the German telecommunications company in 2012 to have the contract run through 2017, according to an article from SportsPro (Click here for the full article). It was alleged that this deal was partially predicated on the club’s performance, giving Bayern real incentive to continue its Bundesliga dominance in recent years – a trend that no doubt lead to the contract extension in some part.
Liverpool signed its kit sponsorship deal with Standard Chartered in 2009, a four-year deal worth approximately $33 million per year. The deal replaced the old sponsorship contract with Carlsberg, which the guardian reported was worth only $11 million per year, and was the longest running kit sponsorship in the Premiere League (Click here for the article).
The Spanish representative rounding out the top 5 most expensive kit sponsorship deals, Real Madrid, signed its deal with Bwin in 2008. However, a recent announcement from the club revealed that it intends to sign a new deal on Tuesday 4/30 with Fly Emirates, an Arab based airline company. The contract is expected to be for four years, and is reportedly worth anywhere between $31-34 million per year (Click here for the full article). The new deal will add Real Madrid to the company’s already impressive football sponsorship portfolio of AC Milan, Arsenal, and Paris Saint Germain.
As teams in Europe’s top leagues only gain in global popularity with time, these deals will only increase in value and the competition to win them will only get fiercer. Just to put the magnitude of these deals into perspective, the typical MLS kit sponsorship runs somewhere in the ballpark of about $3-5 million per year. Granted, the clubs’ reach and marketing value is drastically different than those in Europe, thus warranting a lower price tag for kit sponshorships, but it throws into perspective how far behind the MLS really is financially when compared to the world’s top leagues.