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European clubs scoring big with Asian sponsors

New report says such commercial tie-ups are second to broadcast rights as revenue source
Saturday, August 23, 2014 - 06:00
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Leading the pack is Manchester United, the most successful team in England, which has sealed agreements with household brands such as Japan's Nissin Foods Group - the club's official global noodle partner - and Diageo's Smirnoff vodka brand as its "responsible drinking" partner in the Asia-Pacific - PHOTO: AFP

Singapore

SOME of European football's biggest clubs are on a relentless quest to penetrate the lucrative Asian market, where they have reaped millions of dollars in revenue by selling their commercial rights.

A report by Repucom, a sports marketing research firm, names Asia as the most popular region for European teams today, with 57 deals in total.

This far outstrips Europe (12), Africa (11), Central and South America (six), North America (one) and Oceania (one).

Leading the pack is Manchester United, the most successful team in England, which has sealed agreements with household brands such as Japan's Nissin Foods Group - the club's official global noodle partner - and Diageo's Smirnoff vodka brand as its "responsible drinking" partner in the Asia-Pacific.

Repucom's report on European football clubs' income streams found that Manchester United generated more than 350 per cent extra income by securing such local sponsorship opportunities which are outside their traditional revenue streams - match-day sales, broadcasting, licensing and retail.

During the 2013/14 EPL season alone, the Red Devils generated some S$53.5 million through 38 sponsorship opportunities, the majority of them in Asia.

Thailand's Singha Corporation is both the official global partner for the Red Devils, as well as the official beer for Chelsea, which gives the company the right to sell its beer during games at the Old Trafford and Stamford Bridge stadiums. Manchester City, the reigning English Premier League champions, has an ongoing deal with Saigon Hanoi Commercial Joint Stock Bank as the club's official debit card partner in Vietnam.

Barcelona, one of the giants of the sport in Spain, has an ongoing deal with Thailand's Chang Beer as its official beer in Asia, while German champions Bayern Munich counts Samsung and China's Yingli Solar among its many partners.

Ed Fitzpatrick, Repucom's executive vice-president (Asia), noted that while broadcast rights remain the biggest income stream for clubs in Europe, commercial activities are the second largest contributor, accounting for 29 per cent of all revenue.

"Identifying new ways to increase the value of these deals is incredibly important," said Mr Fitzpatrick, who is based in Singapore.

"The approach to segment and localise commercial assets is something we are seeing more and more of in football, as clubs look to generate additional income and make increasingly engaging partnerships, tailored to that specific market."

He added that, as their global profiles rise, clubs should understand the local market forces so they can forge the most suitable and valuable partnerships available to them.

Commenting on the report, Jasper Donat, the chief executive of marketing consulting firm Branded, said football clubs should come up with creative ways to monetise their intellectual property rights.

"We saw the Italian champions, Juventus, play a friendly match in Singapore on Aug 16. Sure, it was great fun for the spectators, but what happens to the other 51 weeks of the year when the club isn't present here? And can they come to this part of the world every year? It's important for them to demonstrate their commitment to Asia, apart from the odd exhibition game," he said.

The trend of Asian brands sponsoring European football clubs, however, is one that is likely to persist for the coming years, he added.

"A lot of the big clubs already have offices and various representations in Asia, like Barcelona, Arsenal and Manchester United, and we think it's going to get even bigger. The question, really is just how sustainable this growth can be," he said.

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