How Is A Football Shirt Worth $1.28 Billion?

Wayne Rooney: Sponsored By Chevy, Goes For A Bevy

Adidas today announced a ten-year, £750 million ($1.28 billion) kit sponsorship deal with Manchester United.

The deal dwarfs the previous biggest kit sponsorship agreement, Adidas’s £31 million a year deal with Real Madrid and Nike’s £40 million a year deal with France’s national football side.

Let’s see how the club’s sponsorship deals add up.  All data is annual.

£75m kit from Adidas

£53m shirt naming from Chevrolet

£15m training ground naming from AON

= £143 million ($244m)

It more than doubles the club’s current £23.5m a year kit deal with Nike and £25m a year shirt naming deal with AON.

For context, that £143 million amply covers the annual wage bill of star players Wayne Rooney (£16m), Robin Van Persie (£10m) and Juan Mata (£7m) and, more importantly, the £71 million annual financing costs left from the Glazer family’s controversial debt-laden takeover of the club in 2005.

What’s in it for the sponsors?  AON claims its brand awareness grew from 39% to 50% during the first year of its shirt sponsorship.

Kit manufacturers get brand exposure, and also revenue from lucrative replica kit sales.  Fans buy an average of 1.4 million Manchester United shirts a year, putting it in an elite bracket of clubs that sell over a million shirts a year.  Real Madrid also sells 1.4m, Barcelona 1.15m.  Superstar players can spike that figure.  Real Madrid claimed to have recouped the £80 million ($137 million) cost of buying Cristiano Ronaldo in 2009 by selling 1.2 million Ronaldo 9 branded shirts in the player’s first season with the club.

Perhaps the figure that will matter most in the red half of Manchester is that Liverpool FC’s kit deal is worth £25 million a year, while the Merseyside club sells around 800,000 shirts a year.

 

 

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3 thoughts on “How Is A Football Shirt Worth $1.28 Billion?

  1. Adam says:

    Thanks for sharing.

    I can’t count the number of times a client has briefed me to ‘use sponsorship to increase brand awareness’ and the equal number of times I have replied ‘then go buy a media plan’.

    And this is from a guy who’s business is sponsorship!

    AON reckons brand awareness rose 11 points in 12 months from a 25million quid shirt sponsorship? Great.

    Any idea what it did to brand perception?

    How do you reckon the hundreds of millions of fans of teams other than Man U now think of this brand?

    If the objective was brand awareness, the 25M could have been much better spent on media where the message and perception of AEO can be managed. Sponsorship is a very bad way to buy reach (whih is what you need for generci band awareness). Brands are paying a premium for the association with the club and this association has limited/no benefit to awareness.

    Sponsorship does so many thing so well……….. It provides a brand with a platform through which to ‘demonstrate’ rather than ‘tell’ it’s story. It can be used to leverage the sports/team/player brand equity to improve or shift the brands own personality. And it can introduce/reinforce a brand to a very specific geographical or psycho-graphic of audience (the Man U Fan) – all good and worthy thing that can be measured for an ROI. I just get so frustrated at lazy measures like brand awareness as the sole justification of sponsorship investment.

    • Thanks for reading the post. I’m making no judgment about whether AON’s outlay is worth the return, just quoting their own justification of the sponsorship (see the link in the post.) I’m sure that brand affiliation plays a part, as you suggest, otherwise Wayne Rooney’s chest is a dauntingly expensive billboard. And likely that geographical reach plays a part in shirt naming sponsorships: Standard Chartered and Chevy are basically inactive brands in England, so presumably they put their names on Liverpool and Man U shirts to reach audiences in Asia. I’d be interested to hear more about the economic case and the ROI behind other mea-sponsorships. Mail me at TheDataOfCool@gmail.com if there’s anything you can share.

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