What is the Value of Football Brands?

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An interesting piece about the marketing of football brands written by Rufus Barker, our work experience student for this week from the Warriner School.

Where will it all end? I came across a thought provoking article written by Barney Ronay in The Guardian that was based on the fact that mega sports brands are much bigger than any of the major leagues in the world. And when I read content such as ‘Nike has an annual turnover greater than the combined total revenues of every football club in Europe’s five leading leagues.’ and ‘…so surely it’s only a matter of time before they buy into Europe’s top leagues.’, I realised how much I actually agreed with this article.

On TV there is a constant stream of rather cheesy commercials brought out by top sporting brands for their latest range of products (material that has been glued together with a soleplate and tied up with some laces). Even cheesier can be the marketing strap-lines that go along with it, such as “Just Do It” or “All in or Nothing”. But it must be working.

As astonishing as it may seem, just for Nike to get their three minute advert on ITV1 during the half time break of the Uefa Champions League Final, ITV estimated that it would have costed Nike up to £500,000. Although, what I find even more incredible, is that they earn profit, especially when you consider all the costs involved to get onto TV: the superstars in the ads, the cost of the slots, the production etc.

Role Models
Along with the advertisements are the player endorsements. The big sports brands pay footballers up and down the divisions just to wear their boots. Two obvious examples of this would be Lionel Messi (Adidas) and Cristiano Ronaldo (Nike). Lionel Messi is reportedly payed around $2m a year from Adidas alone and Ronaldo is payed up to £5m a year, which will allegedly shoot up to £8m a year with his latest contract. In addition to this, each of these worldwide superstars has their own brand. Whether it’s seen as a fashion label or not, it is certainly having a positive affect on their bank balances.

Dani Alves, right back of Barcelona and Brazil, has quite an extraordinary fashion when it comes to football boots. He will walk out in boots one week that he is payed to play in by Adidas and then the next week he will rock up in a Nike pair. He might even wear one Adidas boot and one Nike boot at the same time. So which boots are best? The ones he’s paid to wear?

So how much do top sporting brands really pay to the biggest clubs, in order to display their fashion? Well it is a lot.

Let’s start with FC Barcelona. Although only ever having two kit sponsors in their history, one of these sponsors – The Qatar Foundation – pays Barça €30m (£25m) annually which will end in 2016 if a new contract isn’t signed. However as part of this incredible sum of money, the contract at the moment states that if success improves on the field, even more money will be pumped into their pockets. I wonder what winning the triple will do for them?

Now to the Emirates, where there is a silhouette of a cat covering the stadium. Oh yeah, as if it wasn’t all over the news: Arsenal have cut the Nike contract and started afresh with Puma. Arsenal will have £150m thrown at them over the next five years, to wear a tighter version of their original kit, and possibly bigger shorts… and stretchier socks. Maybe even technology that makes you sweat more, or perhaps it helps you breathe.

In Merseyside, the two big clubs are expressing their club colours with the help of New Balance (Liverpool) and Umbro (Everton). Liverpool fans may not have heard the name, but they will definitely remember after the contract runs out. This is because the new kits that have already been modelled and shown off at Anfield, are in my opinion very smart, apart from the checkered pattern design. But it is New Balance’s first attempt at supplying Liverpool’s kit, so they decided to p(l)ay it safe with only £25m a year. Still enough to buy quarter of the estimated £100m to build ‘New Anfield’.

Along with this, biggest rivals Manchester United have also entered a new era of kit suppliers. It is the big one. Substituting Nike for Adidas is like choosing your mum over your dad, or your brother over your sister. But you normally aren’t offered this, or have the choice, or get paid to do it! Manchester United have recently chosen to play in Adidas kits for a sum of money that has arguably got silly. The contract says they will wear Adidas for ten years and be payed £700m for it. This is £400m more than Barclays Premier League champions Chelsea over the same period of time. Adidas also expect that over the decade they will make a profit of £1.5bn. This comes as a shock to fans, as Manchester United end their 13 year relationship with Nike. They take their place at the top of the ‘Biggest Kit Deals’ leaderboard. They haven’t finished first in much lately so it is a step in the right direction for Louis Van Gaal and co.

This value of profit however, proves that all the marketing and investment really does pay off – literally.

Younger Generation
So, because of advertising and the adoption of role models, kids all around the world want to get their hands on the boots, footballs and kits they see worn. The most popular boot in The Barclays Premier League is made by Nike, and the most popular boot worn by children is Nike also. I don’t think it is just a funny coincidence. Why do the kids wear it however? Well it is because they think certain boots will improve their touch or their shot power, or make them score the most goals. Unfortunately, a boot is yet to be made that does any of those things, but what you can say is it’s great marketing!

Young footballers of today will go out with their mates to Sports Direct to buy what looks exactly like the real Premier League match ball. That is the only ball they want because it is the one on the adverts and on TV. They won’t buy a Sondico ball or an Umbro ball because they haven’t seen it before. Again, that’s the power of product marketing.

Work Labour
There is of course a downside to all this. Certain products from top sporting brands such as boots and footballs are being stitched together this very second by young vulnerable children working for just enough to survive on; not to live but to survive on. The problem is that the fortunate children around the world have no idea this is happening day in day out. Has it got to the point where these mega brands have overstepped the line and need to rebalance the books?!

In conclusion, there is no difference in the value of football brands or sporting brands in general. But it is the packaging of these brands that make them desirable in the minds of consumers. It is the perceived value that counts. No one really knows where it will all end. If it ever ends! Businesses exist to make money, and if consumers are willing to buy the products, what’s the problem?

Will te brands’ influence go even further in the future, as Barney Ronay asks? Is it that one day club brands will come up against sponsor brands? Is it that one day a time will come where Mercedes will come up against Coca Cola in the David Beckham Premier League title decider? Just let that sink in…