08/09/2020 by Peter Halpin 0 Comments
English Premier League sponsorship in the wake of Covid-19
English club soccer’s top flight has had a turbulent time during the pandemic, but the last five months could only be the start of its commercial challenges.
If Covid-19 has torn up the sponsorship deal playbook, Premier League clubs find themselves in the unenviable position of trying to decipher and apply a new set of rules just weeks before English soccer’s top flight returns for the 2020/21 campaign.
During the height of lockdown, Premier League clubs moved to take stock of their three core earners – commercial deals, broadcasting contracts (what is that I hear League of Ireland Inc. ask!) and matchday income – and reassess fiscal projections for the financial year. Maintaining and brokering partnerships in an effort to offset losses were also top of the to-do list.
The power of the brand will usually win out and the Premier League’s status as the most-watched soccer league in the world cannot be underestimated. But amid a stack of varying studies, uncertainty, as overused a word it has been, continues to stand out.
Like it or not, clubs will be living with Covid’s commercial consequences for the foreseeable future. Perhaps indefinitely. Focus on the solution, not the problem, as the old cliché goes. Certainly no small task.
To shed some light on Premier League teams’ next steps.
1. Rethink the model
A return date allowing fans back into stadia remains unclear after the UK government scrapped further pilot sport events with spectators for the first two weeks of August. According to the PA news agency, Premier League clubs had been hoping to admit supporters at pre-season friendlies on a socially-distanced basis.
Regardless of when, or if, fans come back, teams must prepare their grounds to improve both the viewing experience and commercial offering.
For ventures such as advertising across seating, those have had “mixed results” due to teams having to give some of that income to existing partners. This has made it even harder to recoup matchday revenues, though it has helped to ease some of those difficulties.
2. Collaborate more closely with partners
In recent times any brand who we engaged with that has already dipped their toes in sponsorship have been somewhat deflated with the “lack of love” from the club during the agreed sponsorship term.
It is absolutely vital that rights holder (football clubs) stay engaged with their sponsors – the days of taking money and not liaising with the decision-makers at the brand until a renewal is due are long gone! – some clubs still find ot difficult to realize that it is a partnership rather than a sponsorship ---it must be mutually beneficial for club and company!
At the start of lockdown, a number of grounds were made available to support the National Health Service (NHS), followed by fresh activations from clubs and their partners.
Closer collaboration may well extend to the boardroom when it comes to formulating deals. The flat fee with performance bonuses is nothing new for partnerships. However,flexible incentive-based payments could be more widespread and intricate as brands seek to strike a balance between risk and reward.
3. Accelerate digital
The lack of action during sport’s shutdown saw more clubs turn to social media to appease fans eager for their content fix. That reliance on digital could only be the start for teams in a bid to monetise more effectively.With the new season kicking off on 12th September, the pressure on brands and clubs to be more astute with their partnerships will be greater than ever. Companies have been “sympathetic” to teams’ current plight but warns that can’t last forever in the search for value.
Deal structures could be about to shift. Clauses covering unforeseen events such as global pandemics, resulting in contracts being devalued, will surely become universal. The length of agreements, too, may alter.
Teams have to focus and double down on their efforts around sponsorship. Retention of partners is going to be key in the ‘new normal’.
A compressed middle for mid-range tie-ups could also be forecast, thanks to a bifurcation of mammoth and more modest contracts. The five-year plus kit deals, for example, should be here to stay, but lesser, short-term agreements have caused the split.
Interesting times ahead despite the inevitable challenges.