Brand Finance Football 50 dominated by clubs powered by Gulf investment

LONDON // Half of the top 10 football club brands are benefiting from Arabian Gulf investment in sponsorship and ownership according to new research published today.

The UK-based global branding consultancy Brand Finance’s Football 50 2015 report evaluates the value of a football club by combining financial values and intangibles with brand identity. It is an annual benchmark index for companies involved in, or considering, football sponsorship.

Real Madrid, Manchester City, Barcelona, Arsenal and Paris Saint Germain (PSG) all have shirt sponsorship deals with Arabian Gulf airlines.

Two of the top five clubs also have stadia named after Gulf airlines, while investments by Abu Dhabi and Qatar in Manchester City FC and PSG, respectively, helped the clubs to take 18 per cent of the total value of the top 10 clubs in Brand Finance’s Football 50.

Manchester City, sponsored by Etihad Airways, rose one place to fourth this year, valued at US$800 million, while Arsenal, sponsored by Emirates, fell one place to seventh, valued at $703m. Qatar Airways-sponsored Barcelona fell two places to sixth with a value of $773m while PSG, sponsored by Qatar Sports Investments and Emirates, rose one place to ninth, valued at $541m.

The research also shows how Gulf nations have used football to help to build soft power. According to Brand Finance, the value of the UAE as a national brand has risen from $249 billion to $293bn over the past year.

The value of Saudi Arabia has risen from $420bn to a 2015 figure of $463bn and Qatar is the fastest growing national brand in the world, rising from $184bn to $256bn in the past year, helped to a large degree by an association with the Spanish giants Barcelona, who won Saturday’s Champions League final against Juventus. The Saudi fitness chain Fitness Time has become a regional club sponsor in Saudi Arabia for the next three years. Fitness Time is Barcelona’s second sponsor in Saudi Arabia, together with the Samba Financial Group.

Fitness Time is also the promoter and sponsor of the first FCB Escola football academy in Saudi Arabia, in Riyadh, scheduled to open later this year.

The UAE has also forged links with top European clubs, which in turn helps the country’s brand value.

“Perhaps the clearest example of this use of football to build a nation brand is Abu Dhabi’s Manchester City FC investment, which has given Abu Dhabi rapid global awareness and has provided Etihad a global platform to expose and promote its brand to a receptive audience,” says Andrew Campbell, the managing director of Brand Finance Middle East.

Despite losing the Champions League final, Juventus have had a good season, rising two places from 13th to 11th, with a value of $378m, from $274m.

The result did not affect Barcelona’s position, which remains the same at number six, having fallen two places from last year, with a value of $745m, some way behind Chelsea on $795m.

Outside the top 10, there are two more clubs in the 2015 Brand Finance Football 50 with Emirates as sponsor. The Italian giants AC Milan are unchanged in 14th place, with a value this year of $244m, up from 236m last year. However, Hamburger SV have tumbled from 18th in 2014 to 41 with a value of $103m, down from $138m last year.

Had Hamburg been relegated, they would have been replaced in the top 50 by England’s Norwich City, which has only just won promotion back to the English Premier League (EPL) from the Championship.

This rise illustrates the value of the new £5.1 billion (Dh28.6bn) domestic TV rights deal agreed between Sky and the Premier League, the proceeds of which are split between the EPL’s 22 teams.

“Commercial and broadcast revenues are now more important than ever to clubs, to enable them to compete financially to put the best talent on the pitch,” says Deloitte, a global professional services firm.

“This has led to further dominance … by clubs from the ‘big five’ European leagues.”

Norwich were in the Premier League until being relegated themselves in 2013/14, but Bournemouth, a club where the last set of accounts for 2013/14 season showed turnover of just £10m, are on the verge of entering the Brand Finance Football 50 after the club, which is owned by the Russian businessman Maxim Demin, won promotion to the Premier League in 2014/15.

There are six new entries in the 2015 Brand Finance 50. The highest is AS Monaco, the Ligue 1 club that reached the quarter finals of this year’s Champions League. But the three next highest new entrants – Swansea, Crystal Palace and Leicester – are all from the EPL, as is the fastest rising club, Southampton, which rose 12 places to 18th.

“Southampton [have shown they] can pick players so well for the Premier League and have qualified for the Europa League,” says Robert Haigh, the communications director at Brand Finance.

The top ranked side this year is Manchester United, which despite failing to finish in the top four in the 2013/14 Premier League or to take part in the last Champions League, is now the only billion-dollar football club brand. Manchester United’s valuation surged 63 per cent to $1.2 billion in the 2015 table to knock Bayern Munich off the top spot.

However, even though Manchester United has attracted the highest valuation, the club is only rated AAA by Brand Finance unlike Spanish clubs Barcelona and Real Madrid, which are both rated AAA plus.

“Regaining AAA plus status will provide a further boost to United’s brand value but will require titles and trophies,’ says David Haigh, the chief executive of Brand Finance. “The executive vice president [of the club] Ed Woodward clearly understands that the commercial and competitive sides of the club cannot be run in isolation.

“United’s commercial architect has suggested United will be aiming for all four trophies next season, commenting recently ‘Is the squad deep enough to challenge? The squad will be absolutely deep enough and ready to challenge on all fronts, all competitions next year.’”

Manchester United’s success, in the short term, has been boosted by persuading key brands such as Adidas and Chevrolet, to stay with the club.

“Manchester United have not had a great season but they have almost disengaged their on-the-pitch performance with their commercial performance,” says Mr Haigh. “You can only do that for so long if you are unsuccessful before the brand begins to degrade but they seem to have persuaded sponsors to stay.”

However, not all sponsorship can necessarily provide a positive influence on brand value. Mr Haigh cites Newcastle United’s relationship with Wonga, the controversial British pay-day loan company which has been much criticised for sending fake legal letters to struggling borrowers.

As the English Football Association says: “You need to think about who you approach in the target list. The companies should be reputable and a suitable match for your club.

“For example, it is not appropriate for a pub to sponsor a youth team, and a small-scale business will not be able to afford to support a large community club.”

Sponsorship from betting companies is another example of a potentially damaging relationship, although this has not deterred some top clubs in the Brand Finance Football 50 from signing shirt sponsorship deals with gambling groups.

Sunderland, which has just broken into the top 30 in the latest Brand Finance table, recently announced the Philippines-based online gaming group Dafabet as a shirt sponsor, but Mr Haigh warns: “There is no synergy between the values of the sponsor and the values of the club and this leaves the club open to the risk that they are sending the wrong message to fans.”

Brand Finance assesses brand value across all major industries from banking to telecoms and airlines. To put football in context, there is not a single club in Brand Finance’s latest Global 500. The lowest ranked company in this list is worth $3.1 billion, three times Manchester United’s value.

The closest a club from the UAE comes to breaking into a place in the Brand Finance Football 50 is Al Ain, but a place among the elite remains some way off yet.

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