Tag Archives: New York City FC

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.

Manchester City: Building a Global Football Empire from the Etihad Stadium

The rise of Manchester City Football Club in recent years has been nothing short of astonishing, and since Sheikh Mansour and the current ownership team took over, they have gone from strength to strength, establishing themselves as a Premier League powerhouse.

Manuel Pellegrini’s impressive setup at the Etihad Stadium had—for a good few months—his City team the runaway top scorers in England, which are currently looking to secure a domestic double with the League Cup already in their hands.

From the outside, City seems like the archetypal sugar-daddy story: After all, didn’t Chelsea, Paris Saint-Germain and now AS Monaco go down the same path of sudden fame, fortune and success because of mega-rich owners?

That City’s newfound prestige—and that their starting XI boasts the likes of Vincent Kompany, Yaya Toure, David Silva and Sergio Aguero—is down to the money injected into the club by their Abu Dhabi owners is undeniable, and in some quarters perhaps spoken of negatively and cynically.

But a quick look at their off-field projects, initiatives and business developments suggests City aren’t just in this for the short term, and they’re not just around to pick up a few trophies.

Manchester City mean business, and they’re well on their way to building a global footballing empire.

Michael Regan/Getty Images

Building a City around their fans

From their well-known support of the club even during their lowly third-tier days to their fanatical celebration of a first-ever Premier League title after a 44-year drought, Manchester City fans have long been famous for their undying support.

So it was only right for any City management to focus on their fans—and to their credit, this is exactly what they’ve done.

As fan engagement started to go digital and social media started to take off, City were one of the first clubs to fully embrace these new channels, and as such became one of the pioneers in this arena among the football industry. (Michael da Silva of Alpha Magazine has more in this excellent write-up.)

Along the way, they’ve picked up their fair share of accolades, and for good reason.

Besides their long-admired Twitter channel, they have also become known for offering one of the most comprehensive YouTube librariesin all of football: Their “Inside City” and “Tunnel Cam” series are a rare breath of fresh air in an industry where much of the behind-the-scenes content remain proprietary and available only on paid subscriptions.

By putting their fans in the center of an all-inclusive, fun and interactive social media strategy, Manchester City have hit the jackpot—and their success has encouraged them to strike up innovative and interesting partnerships to take such marketing and fan engagement methods to the next level.

Take their collaboration with GoPro—known for their work with Red Bull Stratos and Felix Baumgartner’s record-breaking free fall from the edge of space—last year, for example.

Announced in August 2013, the GoPro tie-up was a groundbreaking look into “what it’s like to train and play like a professional footballer.” A slight exaggeration, perhaps, given that players wouldn’t have worn the cameras during competitive games—but their viewer numbers of more than two million to date have more than paid off.

Prior to that, their May 2013 partnership with Cisco and O2 turned the Etihad Stadium into the “Premier League’s most technologically fan-friendly stadium,” allowing fans to fully immerse themselves into the digital world while watching a live match unfold before them.

Shaun Botterill/Getty Images

Transforming the City of Manchester

The City of Manchester means a lot to the football club in two different ways.

The first is obvious: Their landmark deal in 2011 with Etihad Airways, which, according to Daniel Taylor of the Guardian, was worth awhopping £400 million, renamed the City of Manchester Stadium to the Etihad Stadium it is known as now.

It was also the largest sponsorship deal in sports at the time and showed the financial powerhouse that Manchester City Football Club were becoming—and the raw commercial potential they had in abundance.

But while the sponsorship arrangement was momentous, arguably more important was what the owners and related stakeholders had in mind for the city of Manchester itself.

The £400 million partnership had significant funds earmarked for the continued development of the Etihad Campus, an area of land around the stadium including a fans’ village and other training facilities. When they put pen to paper on the landmark deal, the landscape and the immediate vicinity was instantly changed.

Two-and-a-half years since he announced the deal, Taylor revisited the topic and wrote more extensively on the “changing football landscape” in Manchester this February (via the Guardian).

With the Etihad Campus due to start its operations within six months and the redeveloped area to include “16 other pitches, accommodation for players, apartments for relatives, a medical center, a boardman, a media theater,” this is truly the beginning of an exciting new era at Manchester City. (The Telegraph have more on the training facility plans here.)

In conjunction with this is the vision at the boardroom level, where Mansour set out a model to incorporate a sustainable future in his plans for the club, which led him to the long-awaited appointment of Txiki Begiristain and Ferran Soriano, both instrumental to Barcelona’s dynasty under Pep Guardiola.

The Barcelona blueprint was instrumental and central to Manchester City’s own footballing approach, according to Sid Lowe of the Guardian, and has begun to work its magic. As reported by the Independent, Patrick Vieira, the ex-Arsenal legend, was chosen last summer to move from his position as football development executive to head up City’s new elite development squad, who have been flying high in the under-21 Premier League this season.

Ray Stubblebine/Associated Press

Cities abroad: A global empire

As Manchester City’s youth players go through a one-club development philosophy and prepare to graduate to first-team level, City’s groundwork has been laid at the local level. Prepare to arm Manuel Pellegrini with a squad that can compete at the top of the European game in the coming years.

Whenever it comes to empire building, the next logical step after sorting out the local setup is to look global.

And City first hit the headlines for their worldwide ambitions with their foray into the United States’ Major League Soccer, joining up with Major League Baseball team, the New York Yankees, to establish New York City FC as MLS’s 20th franchise, as confirmed via SI.com.

Besides forming a fresh new local rivalry with the New York Red Bulls, New York City FC will also be commissioning a brand new football-specific stadium in the Bronx area, according to the Guardian, while also boasting the highly rated American coach Jason Kreis as their first manager.

They weren’t content with moving to just one continent, either, and in January this year, City confirmed, via the Guardian, they would be dipping their feet into the Australian market with their acquisition of A-League side Melbourne Heart.

These two acquisitions and expansions have been branded as “strategic” investments in two of the fastest-growing football nations: City will have had one eye on their revenue streams and profit margins when they decided to move ahead with these bold ventures.

But just as they’ve done at home, City also have a one-of-a-kind opportunity waiting in front of them, the kind of opportunity that will only present itself to those with the resources and long-term vision to make it happen.

If Mansour and his management team continue their good work in the city of Manchester and decide to invest in boosting the footballing infrastructures in both New York and Melbourne, not only will they develop their new football clubs, but they might also have a defining say in the footballing growth of the US and Australia.

The potential and the possibilities of a Manchester City football empire are as tantalizing as they are awe-inspiring.

They’ve already gone back to their roots: In a classic fan-centric move, New York City FC have released two winning designs for their club badge and put them up for a public vote among their fans.

We can’t wait to see what’s next.

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

The Football Business Column: MLS Expansions, Premier League Interest and the Rise of Football in the US

The latest installment in the never-ending story surrounding Major League Soccer and its expansion plans arrived last week, as Orlando City Soccer Club was officially announced as the league’s 21st franchise, to join New York City Football Club as new entrants in 2015.

The story of football’s expansion and rise in the US is impressive, especially given the context of its domestic league’s relative young age, but a look at the FIFA World Rankings shows that at 14th place (as of the time of writing), the US is here to stay.

To explore just how football has developed in America though, we have to first look back across the pond and to the Premier League, whose increasingly globalized product is at the heart of it all.

 

NBC Sports deliver polished Premier League product to US audiences

The new PL carrier in England, BT Sport, recently struck a groundbreaking deal to carry the Champions League from 2015-2018, as reported by BBC Sport.

But they’re arguably not even the biggest newcomer to have caused waves through the football television industry. That accolade goes to America’s NBC Sports, who have well and truly taken football coverage in the US up several notches, especially in comparison with the likes of FOX Soccer and ESPN.

NBC’s coverage is a curiously familiar one, especially to those already well versed in typical English broadcasts. There’s little to interfere with normal play, and the analysis shows before and after the matches—as well as during half-time—all feature English commentators and pundits.

Essentially, NBC have stuck to the basics and not delivered any coverage that might come across as patronizing towards the American viewer; they’ve assumed that their audience is familiar with football and have promoted intelligent discussion with this as the basic assumption.

Add in the aggressive marketing campaigns that NBC have embarked on—especially in New York City in the buildup to the 2013/14 season—and the conclusion thus far is that the English Premier League has been an unequivocal success. Keeping with the core English base but adding some of that famous American marketing and broadcasting technique on top? Sounds like a winner.

Tom Pennington/Getty ImagesFootball’s rise in America

For avid fans of the Premier League—and no doubt for its executive team—the fact that NBC’s coverage has been a success in America bodes well for the future of what is surely now the world’s most popular and exported professional sports league, so much so that the PL is now seen in some circles as NBC’s flagship product.

But those worried about any possible decrease in interest in the US’ own Major League Soccer because of the widespread coverage of the Premier League need not fret: According to this New York Times report, since PL coverage began on NBCSN, viewership of the eight MLS games on NBC has increased by 60 percent, while the number of unique visitors to NBC-streamed MLS games has jumped 322 percent.

There was never any worry about Americans’ interest in their own national teams in World Cup years—whether it be the men’s or the women’s tournament. Neither was there ever any worry, especially in recent years, about support of their local MLS teams, who have boasted stadium attendance numbers to rival and surpass those of both the NBA and NHL, according to this Forbes article. Nor was there any worry about American football fans paying attention to their overseas-based stars, such as Tim Howard, Landon Donovan and Clint Dempsey (the latter two have, of course, returned to the US).

So the fact that TV viewership of MLS is rising—and alongside the Premier League—is massively encouraging for the sport and its growth prospects in the world’s most sports-consumption-heavy country.

USA TODAY SportsMLS expansion, aggression and inevitable evolution

Given the Americans’ propensity and expertise at marketing, commercialization and business expansion—and especially given the increase in the number of American owners of European football clubs—was it any wonder that interest, both foreign and American, would eventually return to US shores?

Setting aside the increasing trend of relatively big names in Europe spending their final footballing years in MLS, the incident that really indicated the prospect of a “soccer boom” in the US was Manchester City’s investment in their joint venture, New York City FC, due to join MLS in 2015.

Sheikh Mansour interested in American growth and influence? A partnership with one of Europe’s newest big boys? Almost seems too good to be true.

If that wasn’t enough indication of a new era beckoning in American football (ahem), what about the recent announcement of the Orlando City SC franchise expansion—and the imminent possibility of a Miami-based MLS venture backed by David Beckham?

That both of these developments have hit the airwaves is not surprising: MLS have shown textbook aggression by aiming to capitalize on a rising wave of interest in football, by proclaiming that the Orlando-Miami rivalry will be one to look forward to, according to the Miami Herald. The bullish pronouncements of Orlando City’s owners, reported here by BBC Sport, regarding the possible signing of Brazilian star and AC Milan legend Kaka merely add to the hype.

And if even that wasn’t enough, surely the recent revelation that MLS franchises have increased 175 percent in value over the past five years (c/o SportBusiness.com) will do it. The current average valuation is $103 million, with seven teams—Seattle Sounders, LA Galaxy, Portland Timbers, Houston Dynamo, Toronto FC, New York Red Bulls and Sporting Kansas City—already surpassing it. (Don’t be surprised if NYCFC and OCSC join them at the top by 2016.)

Harry How/Getty ImagesThe growth will only continue. The beautiful thing about the beautiful game is that once interest starts to grow, it snowballs. And the beginnings of a real football revolution are starting to take place in America.

Which, inevitably, leaves club owners and the league with big decisions to make over the coming years, regarding the direction that they want to take the sport in. Murmurs of instituting the promotion and relegation system, so ubiquitous in the European leagues but almost nonexistent in the US, are growing in noise level, and with MLS expanding to a grand total of 21 teams by 2015 (22 if Miami is awarded a franchise by then), that leaves MLS wanting to join the world’s collection of elite first-division football leagues with the most number of teams in it.

The rest of the infrastructure—league-paid transfer fees, league-owned players, salary caps and Designed Player systems—is currently still a universe away from what the top professionals in Europe are familiar with, and there will need to be an inevitable coming together of practices and policies if MLS are to break into that top bracket of leagues.

While that’s being pondered by Don Garber, the MLS Commissioner, and his executive team, they’ll continue to see the steady growth of the beautiful game in the US.

Perhaps one day, it’ll be they who look forward to exporting their product overseas.

 

This piece originally appeared on Bleacher Report and is also part of my Football Business Column for SWOL.co, in which I discuss some of the latest news, trends and developments on the business side of football—everything including marketing, strategy, technology and finance.