Professional football is a very lucrative business, with many clubs at the top level generating massive revenues every year.
According to Deloitte, Real Madrid, Barcelona and Manchester United are the three richest clubs in the world, with each pulling in revenues of more than €660 million in 2018.
There are three main areas where clubs generate revenue – matchday income, broadcasting and commercial income.
In the case of many bigger clubs, their overall revenues are impacted greatly by the commercial income they generate.
For a club like United, sponsorships account for more than 45% of their total revenue, highlighting how important they are to the success of their overall business. Read on as we look at how clubs sell sponsorships in the modern era.
Stadium income on the up
Many clubs generate huge revenues from their stadiums, with naming rights and pitch-side advertising amongst the most popular methods used.
For instance, Arsenal’s agreement with Fly Emirates to name their ground the Emirates Stadium until 2028 generates huge revenues for the club.
Manchester City (Etihad Stadium) and Leicester City (King Power Stadium) are other great examples of naming rights in action.
Perimeter boards around the pitch is also lucrative for clubs, with some using the latest LED technology to tailor advertising images that are most relevant to their respective international television audience.
Others have taken advantage of LED sports lights to sell sponsorships on floodlight pylons, using the technology to illuminate more traditional printed advertising boards.
Shirt deals still hugely popular
Shirt sponsorships are a superb way for clubs to generate significant revenues, with many linking-up with some of the world’s biggest brands for multi-year deals.
Premier League clubs will earn almost £350 million from sponsorship deals in 2019/20, a rise of more than 10% from the previous season.
Half of the clubs in England’s top flight will have a gambling company’s logo on the front of their shirts for the current campaign, the joint highest number ever from a single industry.
However, with the combined deals worth around £69m, they are far from the most lucrative for Premier League clubs.
United’s £64m income from car manufacturer Chevrolet will be the biggest this season, with City and Arsenal’s respective deals with airline companies rounding off the top three.
Digital revenue keeps growing
With clubs increasingly using different digital channels to promote themselves, it is inevitable that sponsorship has infiltrated onto the various platforms.
Monster Energy’s new deal with Leicester City is likely to be a good example of this, with the firm hoping to increase its international exposure through the link-up.
Their branding will be visible throughout the King Power Stadium on matchdays and for the entire 2019/20 Premier League season.
In addition, the Monster Energy name will appear repeatedly across Leicester’s digital media output, promoting their brand to a massive worldwide audience.
With 1.4 million followers on Twitter alone, it is clear to see how attractive this type of sponsorship deal can be to big brands.