Pitch battle of the brands in the ‘beautiful game’

By Updesh Kapur/DohaThis week the UEFA Champions League in Europe kicked off in earnest for the second phase of the money-spinning soccer competition.Global fans have been jetting into Europe or glued to TV sets in different time zones in all corners of the world to see their favourite teams pitch battle in the knockout stages.After a 10-week sojourn, competitive European soccer action returned with some intriguing games drawn “out of the hat” for the enticing two-leg encounters at home and away.The likes of Spanish giants Real Madrid; English champions Manchester City; London’s under achievers Arsenal; four-time European title holders Barcelona; and French league winners Paris St Germain (PSG), have all earned places in the last 16. Joining them are German high flyers Bayern Munich; Premiership table-toppers Chelsea; the rejuvenated Italians, Juventus; Swiss champions FC Basel; and Ukrainian outfit Shakhtar Donetsk.At one end of the spectrum, there’s an elite group of clubs with strong financial backing and a pool of leading international sponsors eager to show off their powerful global brands and share in the glory in the hope of success on the pitch and securing significant returns for their investment.Global airline Emirates has three of the last 16 clubs in its sponsorship portfolio – PSG, Real Madrid and Arsenal. Gulf neighbour Etihad sponsors Manchester City while home-grown international carrier Qatar Airways has a shirt tie-up with Barcelona.Chelsea and Bayern Munich, meanwhile, have Korean electronics giant Samsung and German telecom company T Mobile as shirt sponsorship partners, respectively.At the other end, there’s a group that is fair to say is comfortably languishing in the lower echelons of the European club scene with an array of less well-known shirt sponsors ranging from pharmaceutical and motoring companies to insurance and energy firms.These include German outfit FC Schalke, sponsored by Russian global energy conglomerate Gazprom; Shakhtar Donetsk supported by national financial industrial group CKM; FC Basel backed by Swiss pharmaceutical company Novartis and Portugal’s FC Porto in a sponsorship agreement with local telecom giant MEO. Not exactly household names.And there are those in between. Either big clubs tied with lesser known global brands or smaller clubs associated with bigger brands. Germany’s Bayer Leverkeusen and Korean electronics giant LG; last year’s Champions League finalists Atletico Madrid sponsored by the unlikely Azerbaijan Tourism; Juventus in partnership with US automobile manufacturer Jeep; and German industrial firm Evonik sponsoring Bundesliga strugglers Borussia Dortmund.Money talks in football. We all know that. The more powerful and visionary owners are, willing to invest tens of millions of dollars in new players and the youth training system that many clubs have, they say the stronger the return through winning silverware at the end of the season and potential for more money flowing into the club.Money also talks through sponsorship. The more appealing the club, the more potential sponsors are willing to part with huge sums to have their names emblazoned on team shirts. The benefit is clear to see. Brand visibility to hundreds of millions of soccer fans around the world through TV exposure and photographs of players in action that appear on the sports pages of newspapers worldwide.There’s much at stake for the remaining clubs competing in the Champions League. Fan pleasers, Portugal’s captain Cristiano Ronaldo, Swedish striker Zlotan Ibrahimovic, Dutch midfielder Arjen Robben, Spanish frontman Diego Costa and the Argentine attacking duo of Lionel Messi and Sergio Aguero are among the star players out in force to help their respective clubs edge towards the quarter finals. They have to strut their stuff with teammates to the maximum in order to progress in the competition and help secure the desired financial windfall for their clubs.The further they progress, the more revenue clubs will earn from TV rights and from the value of sponsorship, though locked in for three, four or longer years, will increase in real terms. For the sponsors themselves, being tied to a strong football brand is also a financial and global marketing windfall.Clubs not only leverage from sponsorship money to raise their international marketing profile, but also utilise funds to invest in club infrastructure. There’s also the contentious issue of players’ hefty salaries which continue to rise everytime a new contract is drawn up – but that’s another story. Sponsors, it seems, feel comfortable with this as long as they get the returns they so look forward to. Fifteen European clubs will be disappointed over the next three months. There will only be one winner. And if any of the smaller European clubs progress through the knockout stages, for them it perhaps will be more meaningful for their status, their finances, their future, their fans and their happy sponsors. The ultimate prize at stake is a place in the finals being held in Berlin on June 6 and, of course holding the winner’s trophy as the Kings of Europe at the Olympiastadion in the German capital. It’s no longer a surprise that soccer’s richest clubs have leveraged their on-field performances and general high status into multibn dollar operations.There’s no better example of how a team’s success turns to eight, nine or even ten figure dollar signs than the rich kit and shirt sponsorship deals clubs have negotiated to their advantage in recent years. For the sport’s most valuable clubs, those two partnerships – kit deals with manufacturers such as Adidas and Nike that make the shirts, shorts and socks, and shirt sponsors wanting their logo across them – can be worth over $75mn a year to the club. Far and away the best example is former Champions League and English Premiership winners Manchester United who have historically been striking the richest deals ever. The Red Devils, as they are affectionately known, ironically didn’t qualify for this year’s Champions League, but continue to win lucrative commercial deals thanks to their global status as one of the world’s biggest soccer clubs with a multi-million international fan following. In 2012, Manchester United firmed up the richest shirt sponsorship deal in history, a mammoth $80mn a year agreement with car manufacturer Chevrolet over a period of seven years.The club originally set the bar on kit manufacturing deals in a 2002 agreement with Nike, worth over $35mn a year as the English Premier League’s most expensive kit contract at the time. The agreement was superseded a few months ago when United struck a 10-year kit deal with Adidas worth $100mn a year that will replace sportswear rival Nike from next season. This equates to $1bn to the Old Trafford Club, far outstripping the previous $500mn record-breaking deal struck by Adidas and Real Madrid.The landmark United pact against the background of no Champions League football this season is a sign of confidence in the British club and the Manchester Utd brand. It is also demonstrates that clubs like Manchester United, regardless of where they are in the league, have built up a strong reputation that appeals to sponsors making informed decisions based on long term prosperity rather than speculative short term gains. While no club has come close to Manchester United in jersey sponsorship income, many have been trying to close the gap. More importantly, they have been following the same commercial strategy of turning on-field success and an increased fan base into massive sponsorship deals and treating the game as big business.As clubs take to the field for the knockout stages of the Champions League, they will all be looking to boost their bank balance and provide the brands they are associated with, with greater leverage to a global audience.Winning will give the lesser known commercial sponsors a new lease of life while the well known brands can only get stronger.With the winners’ podium just a matter of a few matches away, the bait of huge fortunes ahead in the “beautiful game” is indeed very tempting for all concerned.♦ Updesh Kapur is a PR & communications professional, columnist, aviation, hospitality and travel analyst, social and entertainment writer. He can be followed on twitter @updeshkapur