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Sponsorships from the Gulf is helping European football clubs grow

Emirates, Etihad airways and Qatar Foundation now figure among the top sponsors of football

  • By Saifur Rahman, Business Editor
  • Published: 15:12 August 24, 2012
  • Gulf News

  • Image Credit: Agency
  • In 2004, Emirates and Arsenal Football Club signed the biggest club sponsorship in English football history. The deal included naming rights to the new stadium as well as an eight-year shirt sponsorship deal from season 2006-07

Dubai: Gulf money is fuelling revenues of European football clubs while the once rich continent grapples with a prolonged financial crisis as the top European lenders try hard to make both ends meet even with bailout money, according to a latest report.

Investment from the Middle East has coincided with record levels of revenue in European football, according to the Sports Business Group at Deloitte. The 2012 Deloitte Football Money League reported that during the 2010/11 season, the combined revenues of the world’s 20 highest revenue generating football clubs grew by 3 per cent year-on-year to exceed $6 billion, in part due to investment from the region.

The European football market continued to show resistance to wider economic pressures, growing by 4 per cent to €16.9 billion in 2010/11. The ‘big five’ leagues’ revenues grew by 2 per cent to €8.6 billion, with all but Ligue 1 experiencing growth.

Broadcasting revenue was the main driver of growth (up 3 per cent) and now stands at over €4.1 billion, followed by commercial revenue up 5%, and partly offset by a 2 per cent decrease in matchday revenue as clubs adapted pricing strategies to deal with the difficult economic environment.

“Continued growth in revenues of the top 20 football clubs emphasises the strength of these clubs, especially in these tough economic times,” Dan Jones, Partner in the Sports Business Group at Deloitte, said. “Their large and loyal supporter bases, ability to drive strong broadcast audiences and continuing attraction to corporate partners has made them businesses with a global appeal and made them relatively resilient to the European economic downturn.”

Of the 20 clubs featured in the Money League, five benefitted from shirt sponsorship agreements with Middle East based organisations. This included Barcelona, whose agreement with the Qatar Foundation was the first commercial shirt sponsorship deal in the club’s history, worth a reported $40 million per season.

The deal contributed to the club’s 13 per cent revenue growth in 2010/11 and saw their revenue exceed $650 million for the first time, narrowing the gap to Real Madrid, who maintained their position at the top of the Money League for a seventh consecutive season.

Emirates – the biggest Arab airline -- is a major sponsor of European football clubs. Through the acquisition of sponsorship rights with governing bodies and leading clubs teams, Emirates has arguably become one of the most prominent brands within football.

Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive, Emirates airline & Group, sees sponsorship as vital in the airline’s marketing strategy. “We believe sponsorships are one of the best ways to connect with our passengers. They allow us to share and support their interests and to build a closer relationship with them,” he said.

Emirates currently sponsors Arsenal Football Club, AC Milan, Paris Saint Germain FC, Hamburg SV, Olympiacos FC and Real Madrid C.F.

“From the outset our objective has always been about acquiring key sponsorships that will provide maximum reach for our brand,” said an Emirates spokesperson. “Each sponsorship is carefully assessed and the return on investment (ROI) is measured to ensure we receive the greatest benefit for our investment. Through our sports sponsorships Emirates gains a considerable amount of media exposure each year with our sponsorships being televised to a global audience of many millions.”

In 2004, Emirates and Arsenal Football Club signed the biggest club sponsorship in English football history. The deal included naming rights to the new stadium, which is known as the Emirates Stadium, as well as an eight-year shirt sponsorship deal from season 2006/07.

“Sport transcends cultural and language barriers, and is an important means of fostering interaction between the different peoples of the world. Emirates has confidence in our sponsorships effectiveness in strengthening the Emirates brand while bringing us closer to our customers, very many of whom share our genuine passion for sport. Football is a truly global sport and consequently has always been an important strand to Emirates’ sponsorship portfolio.”

Following the footsteps of Emirates, Abu Dhabi-based Etihad Airways has been Manchester City Football Club’s main club partner since May, 2009. During that time the club has enjoyed considerable success, including its first FA Cup win since 1969 in the 2010-2011 season. The relationship with Manchester City Football Club has gone from strength to strength with the recent announcement of a 10 year partnership.

“Manchester City’s recent 10 year naming rights deal with Etihad Airways, estimated to be worth up to $600 million, will further assist them in moving up the Money League in the years to come,” the report says.

The stadium has been renamed as the Etihad Stadium, forming the centre piece of a newly-named Etihad Campus, which encompasses a large part of the Sportcity site in East Manchester, the popular City Square entertainment space and additional existing and planned facilities.

“It is no surprise that as Middle East based organisations look to further promote themselves on a global stage, we are increasingly seeing them choose football as a medium through which to achieve this,” Jones says.

“The global popularity of, and passion for, football offers a tremendous opportunity, especially in Europe’s top leagues in terms of brand and product exposure for sponsors. As European economies struggle with recessionary pressures, which may make securing sponsorship and investment challenging domestically, so there is an appetite from both European clubs and Middle Eastern companies alike to forge new partnerships.”

Whilst the most high profile area of investment by Middle East owners in recent years has been in the transfer market, with Manchester City spending over $700 million on transfer fees since Shaikh Mansour’s takeover and Paris Saint-Germain being the largest spenders in world football so far this summer, there is also significant ongoing investment in physical infrastructure and facilities in Manchester, and stadium development plans being discussed in Paris.

Mark Roberts, a senior manager in Deloitte’s Sports Business Group, noted: “The appetite for football in the Middle East seems to be ever growing, with the acquisition of Nottingham Forest by the Al Hasawi family, being the most recent example. With the Middle East hosting its first FIFA World Cup in 2022, we expect to see further investment in football from Middle East sources in their domestic clubs, leagues and facilities as well as continued investment in European football.”

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