Wednesday, January 14, 2009

How to Buy a League: Where Big Business Meets the Largest Sport's Market

When you turn on a classic American sporting event, whether it is baseball or basketball, you expect to see familiar players wearing their team jerseys that are plastered with the team logo and city. How boring is that?

If you were a sponsor, how could you make sure that every moment of the game there is a spotlight on your logo, or even better, every highlight that makes it onto the Top 10 on Sports Center has your logo synonymous with the team or player that made that game winning play? Instead of being a partner, how about owning the league? If any of these ideas sound too outrageous, then simply tune into the Barclay’s Premier League. That’s right, European football has become a sponsor’s best friend.

In 2006, Barclays, an English bank, renewed their contract with the English Premier League for another 4 years. This sponsorship allows Barclay to name the English Premier League. Since Barclay has taken over, the league has been called either the Barclay’s Premier League or the Barclay’s Premiership. This sponsorship came with a hefty price tag of 65.8 million pounds sterling (roughly about $125 million). Similarly, Coca-Cola also sponsors a league in English football. In addition to having the league named after the sponsor, every team in that league has patches on their uniform displaying the league sponsor. For example, Chelsea has the Barclay’s Premier League displayed on their sleeves of their kit.

What if a company cannot afford $125 million, how can they differentiate themselves from other potential sponsors? Sponsors can literally sponsor a team. Crazy? Manchester United, the most recognizable sports team in the world, dawns AIG (American International Group) on their jersey. On a 4 year, $56.6 million contract, you can expect that the AIG logo to be the most visible logo on the front of the jersey. Some other big companies that sponsor Premier teams include Samsung (Chelsea, phone services); Carlsberg (Liverpool, beer); Fly Emirates (Arsenal, airline); and many more.

In addition to corporate sponsored jerseys, there is competition among Nike, Adidas, Umbro, and Puma is fierce to sponsor individual teams, because there is no league contract for apparel.

Here is something else, this isn’t just happening in England…it has progressed throughout the whole sport…even many of MLS (Major League Soccer, that’s right the U.S. has a professional soccer league) teams have jersey sponsors.

Still not convinced that this European football is for sale? Leagues still sell advertisements around the perimeter of the pitch, much like hockey does. Also, television advertisements still entice teams that have missed out or cannot afford other forms of sponsorship. So next time you watch an American sporting event, try to imagine the teams wearing corporate jerseys instead of their normal attire.

Cheers,

Pbo

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