The DataPOWA view on the most important talking points in the worlds of sport sponsorship and digital.
Sponsorship deals by Paris St Germain and Manchester City allegedly brought the clubs into conflict with UEFA’s financial fair play rules.
Documents published under a project called Football Leaks and now reported in detail by Reuters have shown how wealthy organisations and individuals have become key players in the European football scene.
PSG and City are the primary focus of the leaks, with Reuters writing: “Under UEFA’s ‘Financial Fair Play’ rules, clubs must be transparent about revenues and broadly balance them against expenditure…
“They are intended, among other things, to prevent clubs running up big debts or receiving unlimited amounts of money through inflated sponsorship deals with organisations related to the owners. In short, related-party sponsors should not pay more than the market rate to support a club.
“In the cases of Man City and Paris St. Germain, UEFA’s Club Financial Control Body (CFCB), which oversees Financial Fair Play rules, accepted that the clubs could receive income from Emirati and Qatari sponsors that was far in excess of the market value estimated by independent experts hired by UEFA to assess the deals, according to investigatory reports, settlement agreements and other documents. UEFA’s investigators concluded that key sponsors were related to the club owners, the documents show…
“These arrangements helped to boost the clubs’ income, enabling them to comply with UEFA rules that limit the losses clubs are allowed to incur. That, in turn, helped the clubs to spend tens of millions more on players than they otherwise would have been able to do.”
North American sport will be worth $80.3 billion by 2022, according to new research.
PricewaterhouseCoopers (PwC) has flagged that year as a watershed moment because broadcast contracts for the MLS and NFL will come to an end.
The NHL’s current deal concludes the year prior, with the NBA’s following in 2025, and PwC are predicting that digital companies could make a big splash in the forthcoming bidding wars.
“The story has yet to be told, but what we do know is that there will be competitive bidding for the sports programming pieces that will be out there,” said Mike Keenan, managing director of PwC.
“Competition will drive up licence fees post-2022 and, when you look at it, mobile rights are still complimentary to live TV.
“They are reaching the consumer who isn’t watching on live TV – so, as leagues and teams continue to connect with fans, they are starting to realise that they want to watch sport wherever and whenever they can.”
With the sport struggling to make an impact, Championship Horse Racing is hoping that a new tournament will give it a fresh lease of life.
‘The Series’ will feature sponsor-friendly teams, at-course entertainment and a more accessible format that CHR believes will help the sport emerge from the doldrums.
CHR chief executive Jeremy Wray said: “This is a fantastic chance for racing to lead the way in changing how people watch sport, both live and in terms of bite-size, interactive content.
“The viewers will become fans and engage with brands like never before, on a global scale. Furthermore, everyone in racing benefits, be they stable staff, owners or jockeys.”
The concept is being spearheaded by agency Red Bee, and the company’s Head of client services Christopher Godfree says that sponsors will find great value in the offering.
“CHR wants to make [racing] like a cup final between Manchester United and Chelsea FC. You know what’s going on from the colours, the sense of competition, and even if you’re not a football fan you can understand from context. They’re looking for quick cues that audiences can use to pick up the drama. They’re taking it from a niche sport to a broader audience.”
“People would refer to the names by the brand and pledge their allegiance to teams depending on the brand, much like they do with Formula One.”
Major League Soccer is set to follow in the Premier League’s footsteps by opening up jersey sleeves for sponsorship.
The opportunity will be available from 2020, with teams expecting to receive between $1m and $2m a year for any deals they make.
“The sleeve patch is a premium opportunity for brands to be connected in a significant way with MLS and our teams across the U.S. and Canada,” said Gary Stevenson, president and managing director of MLS business ventures.
“Our clubs will determine the best way to package and price this asset, but we anticipate that it will serve as a foundation for a broader relationship with a corporate sponsors in each market.”