Five in Midfield

(*Your Football Club Is Running Out Of Money)

After a week in which football finance was again in the headlines following the high profile meltdown of Glasgow Rangers and Portsmouth – which has resulted in both sides being placed in administration – it is no surprise that the revenue streams of many football clubs are being subjected to ever increasing public scrutiny. The reasons for this spike in interest are varied, ranging from supporters bidding to preserve the professional status of their clubs, all the way to the clamour to define sustainable business models as top flight European football teeters on the edge of UEFA’s “Financial Fair Play” directives.

The 2011 Deloitte Football Money League report concluded that, of the top twenty clubs in the European Money League, only one amassed less than 20% of its total revenue from commercial activities; that is to say income garnered through sponsorships, merchandising and advertising. Whilst matchday income ranged from making up 8% of total revenue to 42% across these nineteen clubs, and broadcasting income in turn represented between 23% and 65% of revenue, the spread of commercial income was between 20% and 57%, with German clubs Schalke, Bayern Munich and Hamburger SV being the top three beneficiaries, with figures of 57%, 53% and 43% respectively.

That the Bundesliga is considered one of the most financially stable leagues in world football is no coincidence. The so called “50+1” rule implemented in Germany ensures that control of any given club remains with its members. This, paired with strict financial controls and licensing regulations, fosters an environment where outside investment is encouraged with little risk and clubs, generally, remain debt free.

UEFA’s 2008 report into European football finance declared that 25% of the €11,500 million total Europe-wide top division income in that financial year was drawn from advertising and sponsorship, and, though the Bundesliga’s profits exceeded their European counterparts, it is the English Premier League that continues to attract the largest investments. The 2010 Deloitte report described how the Premier League as a whole brought in a total of £2,326 million in revenue, aided by such high profile deals as the £100 million sale of the naming rights to Arsenal’s Emirates Stadium and the culmination of Manchester United’s four year shirt sponsorship deal with U.S. insurance giants American Internation Group (AIG), which had been worth a staggering £56.5 million over the previous four seasons. There’s certainly no denying that advertising and sponsorship deals are vitally important to the football industry.

But there is another aspect to advertising that needs to be considered. This week the power of the platform as a whole to stir public opinion has been highlighted by People for the Ethical Treatment of Animals (PETA), an American animal rights organisation that has sparked controversy with a new advert that, in suggesting a Vegan diet will increase your sex drive, appears to glamorise sexual violence. The fall out has been vitriolic and widespread. Advertising may very well be big money, but its not always easy to get it right.

Consider the case of Mr Michael Atkinson, who this week was detained by Northumbria Police after daubing the name “Saint James’ Park” over the freshly rebranded Sports Direct Arena, after workmen were filmed removing the lettering of the former name from the façade of the historic ground, which had proudly held the name for nearly 120 years before owner Mike Ashley announced the change in November last year. Atkinson felt so strongly over the rebranding that he was moved to commit criminal damage. Newcastle City Council has made its own stand, declaring that it will continue to use the original title.

Or how about the much discussed decision by Barcelona, who last year announced that for the first time in their 111 year history they would take payment in return for advertising on their shirts. The organisation they chose attracted almost as much uproar as the deal itself. The Qatar Foundation for Education, Science and Community Development, who paid €150 million for a five year deal, is a non-profit making organisation that strives to improve these fields within the borders of the Arab state. Though the deal was approved by Barcelona’s members in a bid to counter rising debts, it drew widespread criticism across the globe. Many argued that The Qatar Foundation would have been far better served by simply investing the £150 million into their own organisation, whilst conspiracy theories abounded after it was revealed that Barcelona manager Pep Guardiola had been a paid ambassador for Qatar’s successful 2022 World Cup bid, and club president Sandro Rosell had been a vocal supporter of Qatari plans to develop a football academy modelled on Barcelona’s own La Masia school.

You would be forgiven for thinking that advertising in football is a modern concept, a product of the Sky generation, but in reality the relationship goes back much further. In the 1920s Bovril had prominent advertising in place at Villa Park and Celtic Park, and Lillywhites had an exclusive deal with the F.A. to publish the fixture lists. In the 1930s stars such as Sir Stanley Matthews endorsed a range of products from cigarettes to cosmetics. Though advertising in the sport may have gone through the roof, both in terms of the financial investments involved and the amount the medium is used, it has its origins in these early examples.

But whilst advertising and sponsorship deals continue to be a valuable source of income, the balancing act between financial stability and ever increasing costs is getting more and more difficult. It seems increasingly likely that over the coming years and decades we will see further outside investment in football, and whilst this may benefit some clubs it will ultimately cause the downfall of perhaps even more. If you’re already feeling bombarded and over saturated by corporate branding it would appear you ain’t seen nothing yet.