Top Six Football Clubs In Sponsorship League Of Their Own

Only the central commercial rights of the Premier League itself and the Football Association, as the holder of England national team and FA Cup rights, are keeping up with these clubs, although neither organisation can match their potential for growth over the next five years.

Of the big six, Manchester United and Manchester City are in a mini-league of their own with commercial revenue of £275.5m and £218m respectively in 2017.  

United’s 2017 income comprises £162.4m in sponsorship revenue and £104m in retail, merchandising, apparel and products licensing revenue.

The latter income stream leapt from £31.6m in 2015 to £97.3m in 2016 after the first year of the club’s 10-year kit-and-merchandising deal with adidas, which carries a minimum guarantee over the term of £750m, or £75m per year.

Commercial revenue was 47.4% of United’s £581.2m record income last year. Adidas spending was 13.6 % of the total and car brand Chevrolet’s shirt deal was 10.2 %.

Whereas United has built a commercial giant on club’s sporting success, City’s commercial rise was sparked by the ownership of the billionaire Emirati royal Sheikh Mansour bin Zayed al-Nahyan, deputy prime minister of the UAE.

Mansour’s ownership has delivered funds to buy marquee players, a multi-property sponsorship by state-owned airline Etihad, and the creation of City Football Group, a multi-club ownership model that allows brands to activate not just with City, but clubs in the US, Australia, Japan, Spain and Uruguay.

City’s commercial revenue grew 23 per cent in 2017, to represent 46 per cent of total revenues of £473.4m.

Spurs to join £100m-plus club

Arsenal, Liverpool and Chelsea have also passed the £100m commercial revenue mark in recent seasons. Tottenham Hotspur is likely to break that barrier in the next two seasons. The club’s projected 2017-18 income will include the first season of its Nike kit supplier deal and renewal of Asian insurance giant, AIA, as main shirt sponsor. Sports Sponsorship Insider estimates this will add £24m per year to annual sponsorship revenue.

With naming rights to the new 61,550-capacity White Hart Lane stadium still to be sold, Spurs can also expect about £20m per year more in the 2018-19 season, taking it beyond £100m.

Chelsea aims to build a new 60,000-capacity stadium in the next five years but is not expected to sell naming rights.

The closest to the big six in the commercial revenue table – Newcastle United, West Ham United and Everton – earned £25.1m, £24.5m and £9.3m respectively in 2016. Newcastle’s figure includes conference and catering income so West Ham should be considered the seventh most successful football club by commercial income.

Best of the rest

Premier League revenue and Football Association revenues are growing less quickly than the clubs, but the Premier League’s flat revenue line conceals a major success – it changed from its £40m-per year title sponsorship with banking group Barclays to a group partner structure in 2016 without losing money.

The FA has renewed its kit deal with Nike, effective from August 2018, which will marginally raise kit income, from £33m per year to £33.3m. The Nike deal represents around 50% of the FA’s partnership income.

Below the football giants, UK-based Formula One team McLaren and Williams have seen sponsorship revenues decline dramatically.

In 2011, McLaren was the highest-earning UK sports property by sponsorship, with revenue of around £151m per year. After the expiry of telco Vodafone’s £75m-per-year team title deal in 2013, the team failed to find a new title sponsor. McLaren's then chairman Ron Dennis compared the Formula One team to Manchester United and said he would not lower McLaren's rate card for the title property. 

This strategy backfired, putting extra pressure on the team budget and subsequent failures on the track made McLaren a less attractive proposition to sponsors. McLaren’s commercial revenue was £85m in 2017, though this figure does not include revenue from the now-terminated engine deal with carmaker Honda.

Governing bodies such as the All England Tennis Club, Rugby Football Union and The Jockey Club all make commercial revenues of between £30m and £40m per year. The England and Wales Cricket Board made an estimated £17m in commercial revenue in 2017.

Major clubs in other traditional UK sports barely register compared to the football clubs. The top club earners in cricket and in rugby union – Surrey CCC and Leicester Tigers respectively – made £2.9m and £2.8m respectively in 2016.

Sports Sponsorship Insider is inviting case study submissions for its sponsorship activation casebook Sponsorship Works 2018.  For more information, please contact matthewg@sportbusiness.com. Sports Sponsorship Insider is part of the SportBusiness Group.