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European Soccer Week | Part three: The commercial outlook

With budgets tightening in every industry, brands and broadcasters will look to be more efficient with their spending. What does this mean for Europe's soccer leagues and their clubs?

26 January 2021 Tom Bassam

In January, a telling deal was struck between Juventus and their current principal partner, Fiat Chrysler Automobiles’ (FCA). The agreement will see the carmaker keep its Jeep brand on the front of the team’s playing shirts until the end of the 2023/24 campaign.

The pair last reworked their contract in 2019, when FCA agreed to pay the Serie A giants an additional €25 million (US$30.4 million) until the end of the current season. Under that agreement, Juve received a minimum annual fee of €42 million (US$51.2 million). Yet, despite Juventus and Fiat both being controlled by the Exor group of companies owned by the Agnelli family, the club only saw an uptick of €3 million (US$3.64 million) a year on the base fee.

Now, the new partnership is one of the most lucrative shirt sponsorship deals in European soccer and the most valuable in Italy’s top flight, but it is also an increase of less than five per cent in that basic fee.

In the Premier League, Chelsea’s decision to swap tyre maker Yokohama for telecommunications brand Three last summer saw them secure no increase on their UK£40 million fee (US$53.8 million). None of this should be a surprise amid the financial crisis brought on by the pandemic, but it does illustrate the state of the commercial market in European soccer.

Sponsorship interest is expected to consolidate around the bankable teams in soccer

New partnerships have kept coming. In the Premier League, both Liverpool and Tottenham have agreed new sleeve deals this season but the upwards curve in the value of that inventory is not what it was.

Phil Carling, head of soccer at the Octagon agency, and his colleagues, have been working on make-goods and untangling cancellation clauses since Covid-19 shut down sport. Specific pandemic-related wording is now being written into all new deals.

“So virtually, every contract had some sort of force majeure in it. Some were quite prescient and did call out pandemics. Others didn’t. So you know, sort of drilling into the details of that, and then deciding with the rights owner what was suitable compensation,” he says. 

“It’s quite interesting building contingencies into the contracts to deal with pandemics and things that people might not have considered previously. Things that have actually now become quite prevalent, I would say.”

The commercial team has had to, frankly, at times, sell the whole idea of being involved in the football world again because it’s a different kind of football that we’re involved in at the moment.

Paul Barber, chief executive, Brighton and Hove Albion

Liverpool and Tottenham might be outliers in terms of agreeing major new deals, although Carling thinks the commercial appeal of the big clubs will endure. As for the smaller clubs, Carling says, centralised rights revenue is likely to be the most reliable source of commercial income for at least the next three years as brands focus their money on the reliable big names.

Brighton & Hove Albion chief executive, Paul Barber, and his commercial team have had to redraw contracts in an effort to keep partners on board. Deliverables that have proved impossible because of Covid restrictions have to be made up but, beyond finding new digital activations or agreeing free extensions, clubs need to continue to appear commercially attractive when much of that window dressing is not available.

“Our team have had to be creative,” says Barber. “They’ve had to be fleet of foot. They’ve had to be clever. They’ve had to be persuasive. They’ve had to, you know frankly, at times, sell the whole idea of being involved in the football world again because it’s a different kind of football that we’re involved in at the moment.”

Another hit is the tightening regulatory squeeze on the gambling industry's involvement in sponsorship. France and Germany have historically had very tight laws around the betting sector, while Spain has now followed Italy in moving to outlaw gambling brands from sports sponsorship. That move, according to La Liga president Javier Tebas, will cost Spanish clubs a combined €90 million (US$105 million). In the UK the government has indicated it will follow suit, further reducing the pool of potential partners for clubs and leagues.

Half of the 20 teams in the Premier League, English soccer’s top tier, have gambling brands as a main or sleeve sponsor for the 2020/21 season. During the 2019/20 season, Premier League clubs earned UK£69.6 million (US$89 million) from shirt deals with betting firms, with most clubs also holding smaller partnerships with companies from the sector.

In the second-tier Championship, 15 of the 24 teams rely on betting companies for shirt sponsorship and the English Football League (EFL), which oversees the three professional tiers below the top flight, could be hardest hit by any law changes. The league body says between its title sponsorship with Sky Bet and clubs' deals with betting brands a ban would wipe out UK£40 million (US$54.9 million) of commercial income.

Like all sports, soccer has had to think differently about content distribution in the wake of the Covid-19 pandemic

On the broadcast side, indications are that Ligue 1 clubs will not be getting the same levels of rights fee as was agreed in the now-abandoned Mediapro deal. Serie A is aiming to raise at least €1.15 billion (US$1.4 billion) per season over the next three years from the sale of its domestic rights. That would represent a 15 per cent uplift on its current deal, but a cut of that would go to its new private investors. In Spain, Tebas says La Liga’s days of double-digit fee increases are likely over as the league prepares for its next rights auction this year.

Given its status as a market leader, all eyes will be on the Premier League to see where the market stands and whether it can secure a favourable deal. The pandemic has delayed the tender as Masters and his executive team assess how to package the league’s domestic rights. As part of that process, decisions need to be made on whether to go back to the blackout for Saturday 3pm fixtures, what the data from last year’s pay-per-view (PPV) experiment reveals, and how many games to sell.

Former Sky Sports managing director, Barney Francis, who is not directly involved in a domestic Premier League rights bidding process for the first time since 2009, agrees with the projection of Claire Enders, founder of consumer research company Enders Analysis, in that the Premier League will see the value of its games drop by between five and ten per cent from the current UK£1.67 billion (US$2.26 billion) a year fee. He also has a few suspicions about how the league’s strategy to deal with that drop will shake out.

“They’ll get declarations of interest from the usual suspects that you would imagine,” he says. “There are always declarations of interest from private equity firms and all those sorts of things because owning the Premier League is a glamorous thing – particularly for financial investment vehicles – but they always seem to have fallen away in the final throes of the bidding process

“Which way do I see it going? I see them looking to sell more inventory in a bid to achieve similar numbers to last time. I think that if they were to go back to market selling 200 games, I can’t see there being an increase in the value.”

Carling also fails to see any growth for the Premier League, with international broadcasters struggling too.

“I fully expect [a plateau] to happen with the Premier League this time around, “ he says. “What you’re also seeing is that the pay operators, even in the growth markets like Asia, are similarly suffering because of three challenges, really. One is media fragmentation, so more competition. Second is the fact that the consumer now is probably not committed to watching as much television as they were previously, and the third issue is piracy. And so all of those things, they’re conspiring to attack the pay television model.”


Throughout this week, SportsPro will be unveiling a special series that delves into the structural elements that underpin European soccer in an attempt to highlight the forces shaping the game's future.

• European Soccer Week | Series hub
• European Soccer Week | Part one: Who will fund the continental game’s future?

• European Soccer Week | Part two: The evolution of club competition

This series features as part of a special report, titled 'Power games', in the forthcoming Issue 112 of SportsPro Magazine, which will be available in its entirety via digital or physical versions that can be accessed here.

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