Tag Archives: corporate sponsorship

The Business of Football Kits: Sponsorships, Technology, Branding and Beyond

As we enter the final few months leading up to this summer’s World Cup in Brazil, the national teams taking part in the tournament have been unveiling their new kits to ride on the wave of growing interest in international football.

Brazil, England, Germany, Spain, Argentina and France have all released new kit designs for the summer, with various big-name sportswear companies and top international stars at the helm of high-profile launch events and flashy marketing campaigns. (The Mirror has a collection of some newly released kits here.)

As with most commercial activity in football, however, not all the recent kit launches have been met with universal acclaim: Ben Curtis’ article on the Mirror is a cynical rant at the hype machines that these events have become, while Lizzie Parry’s on the Daily Mail highlights just how expensive replica kits, launched over increasingly short time periods, have become.

In February, we explored the importance of stadiums in the overall commercial strategies of football clubs. As top-level football increasingly becomes big business and a huge revenue generator, let’s take a look at another money-spinning side to the sport: football kits.

 

Vincent Yu

 

Sponsorships

One of the first things that comes to mind when football kits are mentioned these days is the staggering amount of money they can generate for football clubs, both from the merchandising side and from the corporate sponsorship side.

While club merchandise is generally dependent on the popularity and on-pitch success of the clubs themselves—and the annual Deloitte Money League results generally attest to that—the larger context is the money that sportswear companies actually pay to be the official kit providers of football clubs.

In recent years, just in the Premier League, we’ve seen many instances of eye-watering commercial deals involving kit suppliers. Liverpool’s 2012 deal with Warrior Sports, the latter’s first foray into football, would, according to Andy Hunter of the Guardian, net the club at least £25 million a year.

Just this January, Arsenal announced they would be changing their kit maker from Nike to Puma, in a five-year deal reportedly worth more than £30 million a year, per the BBC. And, as ever when it comes to business deals, Manchester United shocked the world this March with their world-record 10-year deal with Nike, which, according to Simon Mullock of the Mirror, will see the Old Trafford club earn more than £60 million a year.

Besides contracts with sportswear makers, the other big player in the football kit boom is the corporate sponsorship deals that have taken center stage in recent years. This 2013 J.J. Colao article in Forbes listed Manchester United, Barcelona, FC Bayern Munich, Liverpool and Real Madrid as the biggest shirt sponsorship deals in the world.

Another interesting marketing tactic has been employed by Tottenham Hotspur this season, as they featured different sponsors on their shirts in different competitions, with Hewlett Packard their Premier League front and AIA their cup shirt partner. According to Kevin Palmer of ESPNFC, however, even Tottenham will revert to the traditional “principal partner” model at other big clubs, having agreed a lucrative £20 million-a-year deal with AIA for the next five years.

 

Richard Heathcote/Getty Images

 

Technology

But with all the money that goes into the kits, and their burgeoning price tags, do those who get to wear them actually benefit?

Specifically, do the footballers themselves get anything out of the constant kit changes, or are they just excuses to step in front of a camera for yet another photo shoot?

Just ask the Italian national team stars. According to the BBC, the high-tech football shirts they will be wearing at the World Cup this summer will be able to deliver massages during the game. The shirts contain a special tape that provides “micro-massages” for their wearers and “maximise muscle power” by allowing the body to recover from exertion more quickly.

Away from the luxury options provided to footballers these days, far more important is the shirts’ ability to keep their wearers warm in extreme cold temperatures. This article from PRNewswire.com lists a few examples of temperature-regulating technologies that are present in football shirts on the market.

Different sportswear manufacturers—the same who enter into the lucrative long-term contracts with football clubs and will rely on such technology to win such bids—integrate different functions into their shirts, but the underlying principles are the same: adding layers onto shirts that keep players comfortable, dry, warm or cool depending on the surrounding weather conditions.

With the digital space increasingly at the center of the football fan experience, besides featuring on shirts themselves, technology has also crept into the marketing side of football shirts and kit launches, so much so that organizing such events can be considered an industry in itself.

See, for example, this analysis on Liverpool’s new kit launch in 2012 on Dan McLaren’s TheUKSportsNetwork.com. Liverpool’s multichannel marketing and promotion strategy, across different social media platforms, was all about putting out a united front for the kit launch, which also had to match the club’s corporate branding.

But, as they’ve tended to do so in social media in general, Manchester City will take home the technology and marketing hybrid approach for football kits as well.

They’ve since switched to Nike as their main shirt sponsor, but City’s launch of their Umbro kits for the 2012/13 season, as covered here by SoccerBible.com, took fan engagement to a new level when they invited fans to decide how the new kit would be officially launched.

 

Ray Stubblebine

 

Branding

Using a new innovative campaign to bridge the marketing and technology worlds with branding in football was yet another Manchester City-affiliated project, New York City FC.

Since their official announcement in 2013, New York City FC have caught the attention with their cutting-edge digital-marketing campaigns despite the MLS outfit not yet officially competing in the U.S.’s highest-tier domestic football league.

NYCFC put their fans truly at the center of their business and branding strategy by inviting them to submit ideas for an official club crest, which was met with widespread acclaim and culminated in a win-win scenario where the club also got their hands on an excellent winner, shown here on the MLS official website.

An example of how the football kit itself has become more than just one of the components of a football club’s identity; it’s evolved into an integral part of the football club’s business strategy on the whole.

So eager have clubs and affiliated sponsors wanted to tap into their fanbase for merchandising dollars that they have begun creating hype cycles out of kit launches to boost profits and increase circulation among their followers—at the risk of straying into grey areas and stirring controversies.

In tandem with the ongoing, controversial narrative that football is becoming more and more middle- and upper-class and moving away from the traditional working-class fanbase that gave the sport its following and popularity, clubs and corporations have rushed into a branding frenzy and become eager to associate themselves as “premium” titles.

A major recent example was that of Adidas, who, according to Anna White of the Telegraph, may refuse to supply Sports Direct, one of the biggest sports retailers in the UK, with a variety of World Cup football kits due to concerns over its stores and customer service.

Said Adidas, “Like all manufacturers, we regularly review, season by season, where our products are distributed. We determine distribution channels for all products based on criteria such as in-store environment and customer service levels.”

In other words, sportswear manufacturers are eager for their football kits to be treated as premium consumer goods—indeed, the mooted £140 price tag for the new England kits by Nike almost automatically price themselves into that category—and they’re not afraid to incur the wrath of fans and middlemen retailers to achieve their commercial goals.

Charlie Crowhurst/Getty Images

 

Prior to the World Cup row, Adidas also landed themselves in hot water with Sports Direct over their treatment of Chelsea’s official club kit. In light of the public spat, Matt Scott of InsideWorldFootball.com put together an excellent and in-depth analysis of the changing role of the football kit itself.

Linking the state and rationale of Chelsea’s commercial and branding activities with the area’s wealthy and exclusive reputation, Scott consolidates a list of the London club’s highest-profile official sponsors, who all pride themselves on their elite stature within their respective industries.

The ever-changing face of the football kit, then, is not just an evolution of modern shirt design and an extension of clothing technology into sport, but is a reflection of a shift in the status of merchandise and football itself in the eyes of football clubs, manufacturers and sponsors.

And with seemingly unstoppable momentum behind money-spinning sponsorship deals, it seems that football kits will continue to be at the center of football’s paradigm shift. One only hopes that it doesn’t one day become only limited-edition items due to their exclusivity.

 

This article first appeared on Bleacher Report.

The World Cup: Evolution from Celebration of Football to Money-Making Exercise

“No decision will be taken before the upcoming 2014 FIFA World Cup Brazil, as agreed by the FIFA executive committee.”

Source? An official FIFA statement, via the Guardian. Topic? Whether the 2022 World Cup in Qatar will be held in the summer or winter, of course; it’s only been the topic that’s consumed most international football fans and FIFA observers in the past few months.

The timing though? Immediately after Jerome Valcke, the FIFA secretary general, suggested to a French radio station that the World Cup might be moved to November 2022 after all.

Confused? You’re not the only one. But what’s been made apparent from the Qatar World Cup 2022 debacle, is that besides all the confusion and suspicions, the focus has firmly been taken away from what the World Cup is supposed to celebrate: football, the game itself.

Sure, the talk has revolved around Qatar’s temperatures in the summer, which would make for harsh conditions for players and fans alike, but surely that would’ve been a factor in the decision-making process leading up to awarding Qatar the host rights, instead of a topic to be discussed afterwards.

That Sepp Blatter and FIFA want to bring the World Cup to the Middle East is not a secret: Back in November, he even entertained the idea of hosting the tournament across several countries in the Gulf region, according to the Telegraph. So the globalization of football and the expansion of FIFA are two key items on the agenda, and both politics and money are equally prominent at the heart of all this, as we studied in an earlier article on the World Cup controversies.

But how exactly did the World Cup get to this current state? To answer that question, let’s go back and trace the evolution of the world’s most prestigious tournament from celebration of football to money-making exercise.

Laurence Griffiths/Getty Images

The Olympics: Eternal Rival and…Founding Father?

To understand the World Cup’s evolution and growth, we must first consider the history of the Olympic Games, eternally seen as the World Cup’s rival tournament in terms of global reach and prestige.

The distinction is always made that the Olympics celebrate not just one sport, but sport as man’s pastime, while the World Cup is only the gathering of footballing nations in the world—and before the United States’ entry and strong showing, not even encompassing the entire world. The World Cup’s proponents point to the final as the premier spectacle in world sport, with no single sporting match able to match its global appeal.

In reality, while they might be rivals now and trying to outdo each other every two years, it didn’t start out that way. In fact, the World Cup has the Olympics to thank for its current iteration and success, because it was the Olympics that gave birth to the World Cup as we know it.

When FIFA was founded in 1904, international football—indeed, professional football—was a phenomenon only affordable for a few countries, and when football was inducted into the Olympic Games in the summer of 1908, only amateurs were represented. Any attempt at organizing a truly international football tournament was undermined by the lack of professional setups in most countries around the world.

But when Uruguay won both the Olympic football tournaments in 1924 and 1928, FIFA, with then president Jules Rimet as a visionary driving force, stood up, took notice, and most importantly, set about realizing his dream. The first FIFA World Cup was to be staged in 1930 in Uruguay, with politics—what else?—at the heart of the host location decision: It was to be the 100th anniversary of Uruguay’s independence, and it was to be made not a great celebration of the game itself, but a spectacular political statement.

How else to explain it, given that the Uruguay national football association was willing to cover all travel and accommodation costs incurred by participating teams? As even FIFA.com concedes, that possible profits would be shared with participants and deficits taken on by the host country won Uruguay the first ever World Cup hosting rights.

The 1934 competition was held in fascist Italy under the dictatorship of Benito Mussolini, and Rimet, according to this excellent Independent feature on his life, was already criticized for politicizing football.

Before the advent of television and the phenomenon of globalization, the World Cup had surrounded itself with politics and money.

(A footnote to add, though, is that Jules Rimet’s vision and dream of uniting the world through sport and creation of the World Cup earned him a Nobel Peace Prize nomination in 1956. Perhaps, hopefully, the World Cup at its heart was actually more than a celebration of the beautiful game, but a triumph of humanity.)

Carlos Alvarez/Getty Images

The Context: Globalization and Technology

But just as we can’t give the Olympics all the credit for introducing the concept of a FIFA World Cup, so Rimet and FIFA can’t claim all the glory for growing the tournament from a small competition featuring just a few countries in Montevideo, Uruguay, to the global spectacle that was the 2010 World Cup in South Africa.

As ever, context is key, and the explosion of global business and trade, just as it’s played a huge role in the history of the 1900s, is an integral part of the World Cup’s continued evolution. Before the business side of things took over, though, first came the phenomenon of television.

According to this TIME feature, the impact of television on the World Cup’s boom cannot be understated: From 1954 to 1986, the number of TV sets worldwide “increased more than twentyfold, from a little more than 30 million to more than 650 million.” This laid the foundations for a truly groundbreaking moment in football history.

The first live World Cup games were broadcast in Europe in the 1954 tournament, which reached only a handful of audiences due to the low volume of matches shown, but the potential of television and TV advertising was already apparent. (Not that the Olympics were to be beaten, of course: The 1936 Summer Olympics were the first to be broadcast on TV to local audiences. International broadcasts came in 1956.)

Fast forward a decade and a half. Spying an opportunity to conquer the world of football and reap the ensuing economic benefits in 1974, was new FIFA president Joao Havelange, who upon taking office turned his organization into a modern international NGO, putting in place the infrastructure, people and income-centered mindset of a corporation.

The only thing left to do for the World Cup, which previously featured 16 national teams, was to expand. And expand Havelange did, opening the doors to developing countries with eight additional slots (which have since been further increased to a total of 32 participants since France 1998), as discussed by Tim Vickery for The World Game. The Havelange era also saw the introduction of the FIFA U-17 World Cup, FIFA U-20 World Cup, FIFA Confederations Cup and FIFA Women’s World Cup.

The costs of hosting such an immense global tournament in one country were too much to bear for one host country and FIFA, and thus came the idea of corporate sponsorship of the World Cup. Havelange struck deals with Horst Dassler, heir to the Adidas fortune, for the German sportswear company and other big-name corporations like Coca-Cola to fund the tournament, paving the way for the commercialization of international football.

So while the advent of television advertising led to increased premiums for marketers to get their spots onto World Cup TV screens, behind the scenes within FIFA itself was a concerted movement to pump money into the World Cup—with political and economic influence once again the main motivation behind all these changes.

(The name Joao Havelange may be familiar. He was the same FIFA ex-president that resigned in April 2013 after a FIFA ethics report ruled that he had taken bribes, as reported by BBC Sport. The culprit in question? International Sport and Leisure [ISL], founded by Horst Dassler. Politics and money, indeed.)

Getty Images/Getty Images

The 1990s and Onwards: Spiraling Out of Control

If ever there was a curious decision in the history of world sport, the idea to host the 1994 World Cup in the US was clearly one, at the time. In hindsight, however, it was just another calculated plan from Havelange to bring the game to North American shores, which had yet to be consumed by football fever.

The legacy was stunning: To this date, USA 1994 still holds the total attendance record (over 3.5 million) and the average attendance record (68,991), according to USSoccer.com. The US’s advancement to the round of 16 for the first time since 1930 contributed to soaring TV ratings.

(Leading up to its hosting of the World Cup, the US also put in place their first ever professional soccer league. It’s no surprise that Major League Soccer was founded in 1993, a year before the 1994 World Cup. We explore the growth of soccer in the US in another article.)

The introduction of the World Cup in practically uncharted territory in 1994 was met with enormous financial successes, and since its foray into the world leader of commercialized sport and corporate sponsorship, FIFA have never looked back. The World Cup has since traveled to Asia (2002) and Africa (2010), goes to Russia in 2018, and brings us to the Middle East in 2022.

According to this Economist article, the World Cup broadcasting rights for France ’98 were sold by FIFA in 1987, before the stunning 1994 American success, for $344 million. An indication of how far the World Cup and FIFA have gone: In 1998, at the time of the article, ISL—which would later collapse, of course—had agreed to pay $2.2 billion to show the games outside America.

The groundwork for corporate sponsorship was laid by Havelange, but was taken to new levels under the leadership of current president Sepp Blatter. Let’s consider the 2010 World Cup, for example: According to a UPenn study, FIFA’s revenues related to the South Africa tournament amounted to a staggering $1.022 billion, of which $650 million belonged to broadcasting rights.

Participating national teams are in on the act too: FIFA was to provide $420 million to all participants and the football league teams providing players to the national teams, $30 million of which would go to the World Cup-winning team (Spain). First-round teams qualified automatically for $8 million each, while $1 million in preparation costs were provided to each participating football association.

This was brought about by the stellar line-up of corporate FIFA sponsors, known as “partners,” which included Adidas, Coca-Cola, Emirates Airlines, Hyundai-Kia Motors, Sony and Visa, who were “guaranteed exposure in the tournament stadium” and would receive “direct advertising and promotional opportunities and preferential access to TV advertising.”

The cost? A minimum of between 100 and million euros through to 2014. By which time, of course, the next World Cup cash cow will be held this summer, this time in Brazil.

Clive Mason/Getty Images

Conclusion: It’ll Only Get More Expensive From Here

Is it damning or merely inevitable that corporate sponsorship and incessant marketing efforts are now part and parcel of any World Cup?

In the build-up to this summer’s tournament, the allegations of corruption have been brushed aside after Havelange’s resignation in 2013, while all the talk of political and commercial interests have been directed towards the distant 2022 World Cup in Qatar, still eight years away.

It’s no longer news—rather, it’s an accepted fact—that the World Cup is now considered an extremely lucrative opportunity for brands and nations alike; this Fox article on Nike and Adidas’ brand battle pre-World Cup is now just part of the fabric. In fact, any sports company—or indeed any business entity at all—would be condemned for not taking advantage of a World Cup year to promote its business.

And so it’s only going to get more expensive from here. The spending and rights associated with the premier world football tournament have skyrocketed in the past decade or so, with the help and under the influence of a few key players, but the brand-new stadiums that are to be constructed in host countries are just the tip of the iceberg when it comes to World Cup spending.

But it’s the World Cup. Just as FIFA continue to rake in the cash, we football fans will continue to ignore the commercial influences and political battles and focus on the spectacle that will unfold before our eyes when the first whistle is blown on June 12 at the Arena de Sao Paulo.

An event of this magnitude only comes once every four years, after all. When the winning team hoists the Jules Rimet trophy on July 13, for once the celebrations will be directed entirely towards the football that they have played, not the money they will make.

This article first appeared on Bleacher Report, where I contribute regularly on Liverpool and the Premier League, and at times on the business of football.