Tag Archives: She Wore

Arsenal commercial partners up to 15 in 2013

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For a long time, Manchester United have been held up as the best example of a club bringing in revenue from commercial deals. The club has 34 (at last count) deals with companies which generated £153m for the 12 months leading to June 2013. That was 43% of their total revenue, higher than their television and match-day earnings, which are worth £102m and £109m respectively.

Arsenal have always lacked not only Manchester United, but the rest of Europe when it comes to commercial deals. As our good friend LordHillWood blogged, the Arsenal board ‘dropped the ball‘ when it has come to commercial deals over the last 10 years, as they focused firstly on financing the stadium, and then paying it off. LordHillWood estimates the club has lost:

“20 million for the first half of those 8 years and 35 million for the second half, with 45 in the last year means Arsenal’s boards indifference and possible ignorance through their outdated culture cost the club a fortune.”

A conservative estimate that the club has thrown away £230million in potential commercial deals.

There is however, a bright light at the end of the tunnel. In August 2009, Arsenal hired Tom Fox as Chief Commercial Officer, he had previously work for PepsiCo and Nike as SVP Sports Marketing and Director Asia Pacific/US Sports Marketing respectively.

Whilst he had little effect in his 1st few years – it is unclear whether this was due to him having a different remit, or just not able to win a deal – over 2013, there has been a lot to shout about.

We all know about the new deals with the Emirates (renewed in 2012) and the new Puma kit deal (agreed in 2013 for £30m a year) but since Tom Fox has been with the club, we have seen us sign 13 deals in a 2 year period. Of which 9 are in 2013. Here is a full list of Arsenal’s Commercial Partners:

  • Emirates – 2004 (Renewed 2012)
  • Indest – 2011
  • Carlsberg – 2011
  • Citroen – 2011
  • Airtel – 2012
  • Puma – 2013
  • Gatorade – 2013
  • Bodog – 2013
  • BT Sport – 2013
  • Imperial Bank – 2013
  • India on Track – 2013
  • MBNA – 2013
  • Paddy Power – 2013
  • Sterling Bank – 2013
  • Telkomsel – 2013

The value of these deals is not known. There tend to be 3 types of commercial deals set up by the club:

  1. Sponsorship: A company (eg Emirates or Citroen) paying to have its name on something
  2. Commission: A company (eg Banks or bookmakers) agreeing to ‘brand’ an item, such as a credit card to increase that items popularity, with the club receiving a commission on all sales
  3. Provider: A company (eg Drinks providers or network providers) agreeing to provide a service which benefits Arsenal, such as providing the players energy drinks, or being the preferred beer supplier, where Arsenal get something out of it, but also get a bit of commission on sales

It is likely some are for very little money, but more the provision of services, such as the Gatorade one (rumours are we get around £250,000 flat fee, a percentage of sales and do not pay for the players drinks). We will only know the true value of the entire package once the accounts for 2013/14 come out which should show a huge increase in commercial activity.

With 10 deals in 2013 (including the Puma one) hopefully Tom Fox and his team can replicate this in 2014 and we can see the commercial gap closing between Arsenal and Manchester United. A sponsorship deal for the training ground and training kit is one place where Manchester United received £15m a year which we have currently not tapped. Although there might be clauses in the Puma contract which includes them sponsoring the training kit.

The only question left to ask is where this extra commercial deal will go? Will it halt the rise in ticket prices? Probably not. The fact we have a 3% rise for next season despite TV revenue dramatically increasing means that new commercial money is unlikely to see a freeze, let a lone a reduction, in ticket prices. It is more than likely new monies will go towards closing the £60m wage gap between Arsenal and Manchester City. Buy better players, and making the rich young men at the club rich.

But without fans where would the club be ? and where will it end ? £100+ for a lower tier ticket….

Keenos

 

The Arsenal and Me – Christofer’s story

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Being a foreign fan, I didn’t “inherit” my love for the club from my dad or any other relative for that matter like many of the local fans did. My love started with my favourite player at the time, Fredrik Ljungberg, getting picked up by Arsene Wenger in the summer of 98. I was twelve years old and football was my everything. If I wasn’t playing it at my local club I played it with the kids in the neighborhood or alone in my back garden. Besides from the local top club Helsingborgs IF (Henrik Larssons Swedish club) most of the kids I hung out with back then supported Manchester United. I never did though. There was something off about that club, some sort of smugness which made me dislike them. When Ljungberg then was bought by Arsenal I started to take an interest in the club. I was too young to appreciate Limpar’s time at Arsenal but when Ljungberg arrived everything fell into place. When he came on to make his debut against Manure and scored that goal lobbing Schmeichel I was sold.

From that day my club was the Arsenal. Seeing as we didn’t have the proper channels at home I couldn’t really follow the club in any other way than reading the results in the newspaper, hoping the sports newscast would show some highlights from the games.

It wasn’t until I graduated high school and got my first real job (this was in 2005) I could afford to sign up with Canal +, who at that time owned the rights to the Premier League in Sweden. Being able to watch every game the Arsenal played made my love for the club grow bigger and I felt I had to go over to London and watch a game before the move to the Emirates would happen in 06 and our beloved Highbury would be no more.
My dream finally came true when my sister, who worked as an au pair at the time for a family in London, called me and said that for my 20th birthday she had gotten a hold of 2 tickets to see the Arsenal vs West Brom on april 14th 2006. All I had to do was book the flight over and she would fix the rest.

The game itself was an amazing experience for me. The walk to Highbury from the tube with loads of fans singing and the stadium just emerging from out of nowhere. The atmosphere was just sublime and I had never experienced something like that ever before. Having the whole ground singing and making noise and to top the day of my favorite Arsenal player, Dennis Bergkamp sealed the victory with a brilliant free kick making the end result 3-1 to the Arsenal.

From that day I’ve hardly missed a game and even though I’m far away I still feel very close to the club and am very proud of its history and traditions.

Up The Arsenal!

Christofer
Christofer is red member of The Arsenal Football Club and member of Arsenal Sweden. For details on Arsenal Sweden, click here.
If you would like to tell your Arsenal story, click here

Are big clubs using MLS to get around FFP?

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Originally posted on YOUAREMYARSENAL.

It may seem odd to report on Financial Fair Play on an Arsenal blog without a focus or direct link to the club. But news this past weekend caused me and others to take notice and well, on first blush it presents the possibility of a worrying trend to circumvent FFP.

Reports have come out this past weekend saying that Bayern Munich are looking to support an MLS side at some time in the near future. This follows the news that Manchester City have formed New York City Football Club, who will enter the MLS in 2015.

A lot of people, especially in the states, will be delighted with these two potential link ups, as it supposedly highlights the growing popularity of the MLS and the possibility that more link up’s with some of Europe’s elite clubs will occur. These link-ups will see the European sides hopefully help the MLS sides financially, assist in improving the coaching and development of youth players, and lead to potential loan deals of youngsters from Europe to America. All of this having the knock on effect of increasing the level of quality on show. Perhaps most importantly, it will also see an increase of European sides playing in America against their ‘partner club.’

Whilst on paper, this looks all well and good – Manchester City for example have invested $100m into the league to ‘buy’ into their MLS franchise – I see it as a worrying danger to the future of European football, as clubs can potentially use the MLS clubs to circumnavigate the Financial Fair Play rules.

They way I see it working is as follows: Manchester City (for example) want to buy a player, lets call him Lionel Messi. Now Manchester City’s owners have the money to buy Messi, however, a £100 million transfer fee will put them in breach of UEFA’s regulation’s. So rather than buy him themselves, they buy him through their MLS franchise, who then immediately loan him to the European side for the length of his contract.

Manchester City then get a player of real quality, but at no cost, allowing them to balance the books when it comes to FFP.

I’ve provided an extreme example. Yes, MLS has stringent player contract and payment models but you get the point. A player of quality could be had and loaned to the bigger club without it violating any rules. Conversely, in England were the size of squads are being restricted, the MLS seems a great place for a club with unlimited fund to buy loads of talented young players and offload them without the club taking any hit.

The broader problem is that this has potential to expand to leagues outside the MLS, it can happen with any league throughout the world, outside of Europe. Whether it is a link up with an American side, an Asian side, an Australian side or a South American side. They would all act as the middle man, absorbing the cost of the transfer into their accounts – which is then written off by their owners – and allowing the European side to stay with UEFA FFP rules.

It’s not all too dissimilar to what already happens throughout the business world. For example, Starbucks use second tier companies based in tax havens to ‘buy beans’ to ensure their UK business does not make a profit, therefore avoiding UK Corporation tax. This method could work in a very similar method, with football clubs using sides outside of Europe to write off expensive transfer’s.

The MLS has very strict financial rules with regards to wages, however, these will also be circumnavigated as the European club will take the wage. I am also sure the MLS will turn a blind eye to being accomplices to this loophole if it ensures the League see’s a bit of the oil money currently in Europe. $100 million a franchise buys a lot of friends.

How these link up’s between European and MLS sides actually works will still be a case of ‘wait and see’ but the speculation of the scenario above, that European clubs will use them as an FFP avoidance scheme has real potential and should be a worrying sign. But we know it won’t – so long as everyone gets their palm greased.

This article was originally written and published by Keenos for our American friends YOUAREMYARSENAL.

Keenos