remark April 2017 - Page 11

4 OUR THOUGHTS ON Premier League pulls up its sleeves for Summer The English Premier League will now allow clubs to sell ‘shirt sleeve’ sponsorship ahead of the 2017-18 season. This is a significant development for one of the most valuable sponsorship spaces in world sport. Here are our thoughts on the impact for the clubs themselves as well as how brands should approach this new opportunity. Given its omnipresence in professional sport, stalwarts of the sponsorship industry will not see this as a pioneering initiative, nevertheless, it is a big step for the Premier League. The League has resisted up until now, taking a view that a clean product with a firm control on the level of branding will command more valuable broadcast deals. However, a combination of the most recent £8.3 billion broadcast deal and the new ‘clean’ Premier League minus title partner has provoked this new commercial avenue for clubs and brands. In order to capitalise, clubs need to make a strategic decision: is this new inventory something that can be sold, or is it a great opportunity to enhance or up-sell to one of their existing partners? Manchester City proudly announced they were the first Premier League Club to sell this inventory in March. The deal was negotiated with existing partner Nexen Tire, the South Korean Tyre giant. This deal was part of a renewal process and the opportunity for Man City to include this right as part of a new contact was clearly too appealing for Nexen to ignore. The approach of enhancing existing partnerships can easily be adopted by the Top 6 Premier League clubs such as Manchester United, Arsenal, Chelsea, Tottenham and Liverpool. Their significant portfolio of international partners would facilitate this and thus we anticipate this to be a likely outcome. From a brand perspective, purchasing a sleeve sponsorship and expecting a significant ROI from just badging the shirt is an absolute no. Nexen Tire and Beko (Barcelona sleeve sponsors) are perfect examples of a brand amplifying their existing partnership. A new brand entering into this space should carefully think about the rights negotiated as sleeve sponsorship alone may not reap rewards. The EPL is a good example: outside of the top 6 clubs, ten of the remaining clubs have betting partners as their main shirt sponsors. In an already -cluttered market, there is a risk of this new inventory compounding the saturated and highly competitive gambling brand portfolio in the league. The question thus remains as to whether these betting brands will consider dominating the shirt (by holding both properties) as an important part of their deal. Another consideration that clubs should take on board is a potential new sponsor having a detrimental effect on existing long-standing partnerships. An exclusive shirt sponsorship has traditionally been the principal partner of a club – this notion has now been disrupted due to the sleeve patch option. To conclude, this is an interesting development within sponsorship given the magnitude of the English Premier League. However, rights holders and brands should not get sucked back into the badging approach and carefully consider where and how this inventory could be most effective. Looking ahead to the 2017-18 season it will be fascinating to see how many of the 20 clubs manage to sell this right and to whom.