Osasuna and Malaga this October in Spain’s toptier football league, La Liga, stood out for more than the welcome three points it gave the home team. In a scene reminiscent of the 1970s, the game was played out between two teams wearing shirts without the omnipresent sponsors.
With four La Liga clubs starting the season without a sponsor - Hercules and Racing Santander arealso wearing a brand-free shirt – thesituation is fast becoming a trend in Spain. Add to this Barcelona, which has historically refused sponsorship on its shirt’s prime location on the grounds of tradition, and it is easy to see why Spanish clubs under perform when revenues from shirt sponsorship are compared against other European leagues. According to SPORT+MARKT’smost recent European Jersey report, La Liga places fifth in the big five European leagues in terms of income from shirt sponsorship for the 2010-11 season.
While collectively the Spanish league traditionally lags behind the big three - the English Premier League, the German Bundesliga and Italy’s Serie A - this year it falls behind France’s Ligue 1. Although the report shows total annual revenue from shirt sponsorship for La Liga clubs has increased by €8.9 million to €57.5 million, the increase can be credited to one deal alone: Real Madrid’s agreement with online gaming exchange bwin. The agreement, now in its fourth year, now nets the club €23 million annually, an increase of €8 million per year since an extension was signed before the kick-off of the 2010-11 season.
Considering Real Madrid’s global pulling power and Barcelona’s success in the 2008-09 Champions League, Spanish clubs enjoy fairly poor pickings from shirt sponsorship and receive on average just under €2 million per club annually (compare that to €6.6 million in the Bundesliga, €6.4 million in the Premier League, €3.3 million in Serie A and €2.9 million in La Liga). A spokesman for one sponsorship agency told SportBusiness International that Spanish clubs are lacking in imagination and innovation when presenting sponsorship opportunities, and that there is a clear lack of creativity in putting together sponsorship packages.
However David Brabender, a director at Madrid-based multinational sports marketing agency U1st Sports, sees the situation as far more complex: “Firstly La Liga itself has to make more o an effort to be attractive to global brands. At the moment we have bwin at Real Madrid and perhaps the Kia deal at Atletico which have a global scope. The issue of the league’s competitiveness needs to be addressed and kick-off times have to be adjusted to gain higher TV audiences in foreign markets. “The real onus, though, sits with the clubs: they need to make more effort to become attractive to sponsors and help them achieve their objectives. Nowadays sponsors want more than just brand awareness for their investment. They want to be able to open up sales channels through sponsorship. “Spanish clubs need to look more at the clubs in the Premier League and treat their supporters like consumers, using up-todate CRM packages that target and communicate with fans that sponsors can tap into. At the same time, stadiums need to become a focal point in the community, in use 365 days a year and a unit of the business that the sponsor wants to be associated with.”
At a recent Madrid conference on brands and sport organised by Havas Sport & Entertainment, the business model for the future sustainability of Spanish clubs was discussed. The debate was opened citing the example of Wigan Athletic - a low ranking English Premier League club generating more money from its shirt sponsors than the vast majority of La Liga’s clubs. A variety of reasons were cited to explain why so many clubs started the season without a deal. Malaga, a club bought last season by the Qatari Sheikh Abdullah Al-Thani, cancelled their deal with British bookmaker William Hill midway through its first year last season, stating that the sponsor’s gaming activities did not sit well with the religious convictions of the new owner. It is also believed that the threeyear contract, originally signed for a reported €600,000 a season, simply did not meet the new owner’s assessment of his club’s value. Malaga has since become big news in the Middle East with games regularly shown on TV in the region and a bigger deal with a sponsor from that area may be in the pipeline.
The situation at Osasuna is more complicated; all summer negotiations were ongoing with Yingli Solar, a partner of the 2010 FIFA World Cup and the club’s main shirt sponsor for the last two seasons. The solar energy company spent a large proportion of its marketing budget in and around South Africa, making a deal extension at the level of €. A match between 1.2 million a year difficult to reach. After two seasons without a sponsor Racing Santander finally signed an agreement in late October with a meat producer and will wear the slogan ‘Palacios - Leaders in Chorizo’ on their shirt for the next two seasons. However Carlos Mangado, head of marketing at Osasuna, explains why signing a deal midseason, similar to Santander, is not forthcoming: “We are simply protecting the value of what we think our main sponsorship space is worth. Despite the current economic situation we simply cannot accept any price nor any sponsor, we’re looking for a certain fee and quality of brand.” Spanish clubs are permitted to use up to five separate spaces on kits with different sponsor’s logos. Apart from the main chest position, smaller, less visual spaces exist on the sleeve and around the number on the back of the shirt. There is also space on the front left and backside position of the player’s shorts. “We have filled up the other four spaces with the same sponsors as last season, we have to be fair to those companies and we probably get as much money from these positions as some clubs get from their main sponsor,” Managado explains.
Osasuna are highly regarded as one of the more advanced Spanish clubs in terms of generating marketing revenues. They have had a main shirt sponsor since 1986 and are one of the few clubs to have sold the naming rights to their stadium, the ‘Reyno de Navarra’, promoting the autonomous region in a deal paid for by local government. Financial support from public institutions has long been common in the Spanish game, and in many cases comes in the form of shirt sponsorship. This has been attributed to a lack of progress in the sophistication of many clubs sponsorship programs, as undemanding councils are happy to plaster the name of the city or local region on a club’s shirt. Mangado is frank about the shirt sponsorship situation: “We owe it to the members of Osasuna who are the true owners of the shirt to get what we think is a good price. Fortunately the club president agrees with us and does not pressure us to take a lower price. Overall I think Spanish clubs receive lower revenues for shirt sponsorship due to a lack of development on the marketing side of clubs.”
Recently promoted Hercules of Alicante continues without a deal while in negotiations with the local council to promote the town on its shirt. Meanwhile Villarreal have promoted the unopened Castellón Airport on its shirts for the last three years, while a plane is yet to take off from the unfinished terminal. But what is certain is that, in the current economic climate, Spanish clubs will continue to struggle to generate sponsorship revenues unless certain attitudes change, and a lot of work needs to be done if club’s sponsorship programmes are to match the success of Spanish football on the pitch.
SportBusiness International