In a recent tweet I highlighted the difference in levels of non-broadcasting income growth between Everton, Manchester United and Liverpool. I highlighted the fact that Liverpool FC have increased non-broadcasting income by £140 million (2016/17 accounts) in the 12 years since 2005, and Manchester United a staggering £293 million. In the same period Everton increased annual non-broadcasting income by just £9 million which includes the £6 million contribution from the USM sponsorship of Finch Farm.
There are obviously a number of factors at play including regular participation in the Champions League, Manchester United’s continued trophy success (which may be coming to an end), and continued ground and facilities development at both clubs to increase match-day incomes.
I’m aware, obviously that Everton have not enjoyed Champions League qualification, nor have had any development of Goodison Park. In fact, Everton’s match-day income has fallen over the period despite a healthy increase in attendances to full capacity reflecting the increase in season ticket sales and particularly the extensive discounting to children, young adults and senior fans.
Realistically with a continued & welcome commitment to affordable ticketing, Everton’s match-day income will not increase until the opening of Bramley-Moore, at a minimum of 4 seasons away.
Thus the requirement to grow commercial income is extremely strong. Therefore it is interesting to look at the last 12 months and to see if there is any evidence of an improvement in Everton’s commercial performance.
New and renewed commercial contracts in the Premier league 2017/18
I started by looking at each of the Premier League club’s and their new and renewed commercial contracts during 2017/18. The results can be seen in the table below:
|Club||No. of new/renewed commercial relationships||New Partners|
|Arsenal||11||Acronis, Tidal, CashBet, Hyde Park Developments, WorldRemit, Cover-More, Vitality, Banque du Caire , Emirates, Rwanda Tourism Board|
|Bournemouth||6||AudienceView, Deep South Media, Vitality, Tempobet, Greenwood Campbell|
|Brighton||5||IT First, Pogoseat, Italk, Bespoke, TR Fastenings|
|Cardiff||5||VideoDoc, K8.com, 1xBet, Trojan, PAS|
|Chelsea||8||Hyundai, Millennium & Copthorne Hotels, Doyen, Sony Music, Star Beer, Rexona, Ericsson, Sure|
|Crystal Palace||7||Puma, GambleAware, Royale International, Apollo Tyres, Twickets, Tempobet, Dongqiudi|
|Everton||5||Blackwell, Rovio, SecuTix, Thomas Cook Sport, Davanti Tyres|
|Fulham||2||ICM Capital, Dafabet|
|Huddersfield Town||16||Coco Fuzion, Kenyon Weston, Cedar Court, ISDM, Orchard FM, All My Systems, Kinect, Evolve, Lister Horsfall, Multiflight, Grand Central, SciSports, Bockelkamp Sports Marketing, Easy Fireplace, Goodwin Smith, Leisu Sports|
|Leicester||7||ThaiBev, Vitality, W88, Adidas, Lanes Fine Jewellery, Dafabet, DirectAsia|
|Liverpool||3||Standard Chartered, Wireless Infrastructure Group, Petro-Canada Lubricants|
|Manchester City||14||Turtle Beach, Xylem, PAK Lighting, Marathonbet, AvaTrade, SeatGeek, Nexon, Tinder, Barclays, Amazon, Gatorade, Khmer Beverages, Mundipharma, Rexona|
|Manchester United||10||Chivas, MoPlay, Melitta, Kohler, Belgium FA, MLILY, PingAn Bank, Cho-A Pharm, Science in Sport, General Sports Authority of Saudi Arabia|
|Southampton||3||Brickhill, Utilita Energy, Unily
|Tottenham Hotspur||13||Harman, Hotels.com, Beavertown, William Hill, Fun88, Daktronics, Sporting Force, Schneider Electric, Mitel, Mammoth, Healthspan, Leagoo, SCX|
|Watford||2||MoPlay, Mullany’s Coaches|
|West Ham United||3||EVA Air, Lagardère Sports, Basset & Gold|
|Wolverhampton Wanders||5||Bundled, Wolverhampton Building Supplies, Reech, Silverbug, W88|
What immediate struck me is the wide variance in number of deals, the types of companies partnering, and the almost always random selection of sectors and geographic regions.
Some clubs almost certainly have a strategy and are working towards their objectives. Interestingly it’s not just the bigger clubs that operate in such a manner.
Take for example, Huddersfield Town. Now in their second year of the Premier League, they have a small number of global partners(5) but also have a concept called the “Huddersfield Hundred”. One hundred businesses local and national sign up each season to be business partners of the club. In return they receive advertising opportunities and in the words of Huddersfield’s commercial director, Sean Jarvis “Town fans continue to support the businesses that support their team; that’s been a big success story for us. Town fans are tremendously loyal and that’s why the #HuddersfieldHundred has worked”.
The accounts for their first season in the Premier League are not available yet, but in their promotion season, commercial income was a highly respectable £4.3 million.
Other clubs seem to prefer a geographical bias, perhaps like Leicester City, based on the nationality/regional presence of the club’s owners.
Brighton and Crystal Palace both had strong growth in their partner portfolios.
Of the larger clubs, clear Manchester United’s well oiled and hugely effective partnering operation goes from strength to strength with a portfolio of 50 companies, including 22 global partners, 7 media partners, 9 regional partners and 12 financial partners. In common with many of the major clubs there is no association with gambling. In particular I find their financial portfolio a great example of choosing a sector with big marketing budgets, then optimising the revenue by selecting individual banks/institutions for specific countries, or in the case of Maybank, a region.
Arsenal’s portfolio has an interesting exposure to Africa and obviously the Middle East. Not only their long-term relationship with Emirates, but now their sleeve sponsor, Rwanda Tourism, WorldRemit a Somalian company, and in a very shrewd move, Banque du Caire in Egypt. The deal with Cashbet is interesting in that it is their official blockchain partner.
Chelsea under their heavyweight commercial director Chris Townsend (former commercial director for the London Olympic Games) are adding to their commercial portfolio at a rapid rate. The club have stated they wish to see a three fold increase in commercial revenues in less than 5 years.
Similarly Manchester City are moving through the gears, rapidly increasing their portfolio, adding 14 partners over last season.
All of which leads us back to Everton. As stated earlier the only avenue to increasing non-broadcasting revenues for the next 4 years at least, appears to be significantly expanding our portfolio whilst exploring ways of optimising the portfolio either by sector or by geographic concentration. It is essential that in the lead up to Bramley Moore we don’t wait but significantly increase revenues in this time.
Our two major and long-standing partnerships with Umbro and Fanatics are both due for renewal or replacement in May 2019. Given the nature of these deals and the lead time required I suspect decisions have already been made. There’s a high probability that both deals will be extended but one would hope on better terms financially and in the case of Fanatics in terms of the ability of fans globally to purchase Everton kits and merchandise.
To date, and with a limited number of partners, there does not seem to be a defined strategy either by sector or by geography, something which I believe is a serious omission. As ever with the club, other than the desire to grow the club, there’s no specifics. Personally with a new CEO and a new commercial director I would have expected some communication regarding our strategy going forwards and perhaps being as bold as Chelsea in providing a target growth rate.
The frustration is that the opportunities are there. The sheer number of transactions that take place bear witness to the attractiveness of the Premier League.
This is being exploited well by a small number of larger clubs, but also by a small number of challenger clubs. At Everton, we are clearly not one of the larger clubs commercially (currently), but nor are we a challenger. We are a long-established, global name with a great catalogue of individual brand elements given our history, reputation, location and yes, development potential. To me, I believe we must be the most attractive brand in the Premier League outside of only the two Manchester clubs, Liverpool (by way of their success in branding and self promotion) and Arsenal. I believe we have a stronger tale to tell than both Chelsea and Spurs (even with the much diminished chances of success in the near term).
Knowing we have one of the most iconic sporting stadia in the world, knowing we have a limited time before moving, there’s an incredible time-limited opportunity for sponsors/partners to be associated with Goodison, to align their brand with a unique location in world sport – isn’t that something we should be taking advantage of?
Our relative lack of exposure by virtue of not being Champions League participants obviously affects the value of individual partnerships, but it shouldn’t affect the number of deals we do nor the quality of any strategy we may have behind choosing partners. It would be heartening and enlightening to hear the club explain how we are going to achieve the growth in commercial revenues the business desperately needs.
As a club we have under-achieved in this area for years – to our detriment on the pitch. If we are going to achieve our playing ambitions in future years we have to change our commercial situation now not later.