Sunday , 24 September 2017
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Cannon Fodder: Show us the Money!

(Image from www.ebay.com)

Who wouldn’t want an Arsenal Piggy bank??? (Image from www.ebay.com)

Greetings and Salutations brothers & sisters of the Goonerland! Hope you have had a good week. I was a little bored at office, so I deiced that an unbiased look at our spanking new deals would kill time rather well , so here goes:

Never have I seen a bunch of football fans get so riled up over shirt deals and sponsorship agreements. The promise of “funds” and ‘moolah’ coming into the club has everyone salivating. Looks like following Arsenal has made us all a little money-mad. Most supporters of other clubs are barely aware of their club’s finances and sponsorship deals beyond the name of their shirt and kit sponsors. Who would have thunk that following a football club would have made us all armchair financial analysts, eh?

As most of you would be aware, AFC has renewed/renegotiated/extended its current deal with “Emirates” to keep the airline’s name on the shirts. The deal is a “new £150 million deal which grants the airline a five-year extension to their shirt partnership with the Club until the end of the 2018/2019 season”. Straight from the horse’s mouth.

Ivan G was his usual suave, calm self during the press conference; he said the right things and played the part of public representative of the board of directors (and owner) par excellence. Sometimes I can’t help but appreciate the man, he’s certainly brilliant at dodging bullets and maintain a calm visage in the face of fire. But the man’s allegiance is to the creatures that pay his salary, not the club’s well being itself, so I tend to be a little cautious with his words.
Let’s peel off that glossy layer of media hype and look into the real facts of the deal. The deal has been lauded as “brilliant” and “Amazing” by fans but let’s take a look at the numbers before running our collective gobs on the whole thing.

The best way to appraise a sponsorship deal is to compare it the deals our contemporaries boast. For, now let us take a magnifying glass to three types of “sponsorships”:

1. Main-Shirt sponsors (ex: AFC-Emirates, MU- AON, CFC-Samsung etc.)

2. Practice kit/shirt Sponsorship (ex: AFC-Emirates, MU-DHL)

3. Stadium naming rights (viz. Emirates Stadium & Sports Direct Arena etc.)

AFC’s new deal includes these three separately marketable entities and clubs them into a single all-encompassing deal which offers £150mil over the span of five years. The renegotiated deal will come into effect after the end of the current season which means that the much talked about “funds” will be made available only over the summer at earliest.
In layman’s terms, the January “transfer war-chest” (if this mythical entity does exist) will undergo NO augmentation. I doubt that the club would see a dime even if Hill-Wood asks nicely (that’s scheduled to happen right after pigs starting flying and cows start teaching us quantum physics) & I’m rather certain emirates wont do “loansies” so don’t get your hopes up.

Manchester United’s current shirt(s) deal(s) from AON & DHL (shirt and practice jersey respectively) garners them around £30million a year combined. Their deal next year with Chevrolet is supposedly umpteen gazillion pounds (£44.75mil to be exact) a year, so they will effectively outstrip AFC’s (shirt related) income by a mile and a half, not to mention the £10mil that DHL will continue paying them. That’s what comes when you are market leaders, I guess. Their stadium’s name is unlikely to be tampered as I doubt that the Mancs would take kindly to that. But in the unlikely event that they do, our deal with Emirates will go back to looking like that puny kid who got picked last for every football game.

Chelsea’s current deal with Samsung is inferior to our own and fetches them around £19mil per annum. But again, If “Stamford Bridge” were to be replaced with (assume) “Millhouse Arena”, we would be in deep waters indeed. Again, this scenario is rather unlikely as the blues wouldn’t want Roman tampering with their “history”.

Liverpool (Standard Chartered), Sunderland (Invest in Africa) and Manchester City(Ethihad Airways) are tied at £20mil an annum each. The mind boggles as to how Liverpool and Sunderland managed such lavish deals when their global appeal is insignificant compared to the other clubs on our little list. Neither club hasn’t even the tiniest sniff of top flight European football, but yet they manage to punch far above their perceived weight. Commendable indeed! (Anyone else wondering why AFC’s team couldn’t pull off a similar miracle, vis-à-vis Man United?)

Else where in Germany, at the house of the one of the most marketable footballing brand in the world(surprised?), Bayern’s deal with Deutsche Telekom is worth around £24.3mil per annum. The deal also includes certain media rights such as match analysis and behind the scenes interviews with players. With the jiggery-pokey that is a part of every business contract and our lack of clear knowledge of the wording of the deal, we can’t make a fair assessment of the setup and its financial consequences.  Allianz is rumored to have paid a “vast” sum of money for the “Allianz Arena”, but I couldn’t get my hands on an exact figure. Their income for all three of our parameters is rumored to be around £27.6mil which is slightly south of the figure AFC have agreed to.

Now, the ugly Spanish leviathans :
Real Madrid are rumored to be paid around £17mil by Bwin while FCB gave up their altruistic ways a year or so ago and agreed to pick up a cool £25mil a year from Qatar Foundation in exchange for their names plastered across their shirts.

At first glance our deal looks nice and dandy as it sits atop our list, but let me express a few little problems that we I’ve noticed:

Firstly, most of the aforementioned deals are relatively short-term, which means the clubs will re-negotiate the terms and will probably get a huge pay rise while we’ll stuck firmly with our numbers as figures until 2019, especially the stadium naming deal. This may be perceived as a good thing as AFC might lose its bargaining chip (to command heftier deals) if we were to slide into the dark and (financially) scary of realm of the mid-table of the premier league.

Secondly, Man Utd’s insane deal with Chevrolet that kicks in next year is going to set a whole new standard for shirt sponsorships, this means that the big boys (Bayern, Real, Barca et al) are all going to look for a giant rise in their deals as well, this will again result in a whole host of clubs racing ahead of us over the next few years. Most of this is conjecture and prediction, but it is worth noting as I’m rather confident regarding these unlike the last time I got rather riotously drunk and predicted that the Singularity would occur in a fortnight and Skynet would take over the world in a month. Needless to say, it did not.

Thirdly, I feel that putting all three of our eggs (the aforementioned separately marketable entities) in a single basket (deal with Emirates) seems to be folly. Other clubs will soon follow the financial trail blazers and start looking for sponsors for their practice jerseys and stadium names (if need be) to increase the revenue generated by sponsorships, needless to say, this would NOT be too good for us.

Fourthly, Emirates also sponsor a few other teams (Paris SG & AC Milan), this is no big whoop. But I’m of the opinion that a club of AFC’s stature deserves an exclusive sponsor rather than belong to a Emirate’s little harem. Yes, this is barely a valid reason to be irked.

So far the commercial team has done a merely passable job, they have conjured nothing unexpected or phenomenal and have merely hit the expected mark with a ‘brand’ as popular as Arsenal. Expecting miracles (Liverpool, Sunderland & United) of the commercial team might be slightly unfair.

On the whole, the deal looks rather healthy from the current shape of things, but in a few years we will once again be lagging behind clubs that we actively compete with in terms of shirt sponsorship. I expect that a section of fans, the self-satisfied and smug bunch are going to give me a earful about my “pessimistic” take on things but the day I take their insults  seriously is the day you’ll find me on the roof singing: “I believe I can fly…..”
Nonetheless, the new deal is light-years ahead of the current deal, so we are moving in the positive direction. We can’t crib too much as long as that keeps happening. The impending Adidas deal will again be pivotal to the club’s financial statement in the coming years.

Stay Gooneristic!

P.S credits for title to Abdul Azeez (@Abdul_AZ)

Angry? Happy? Filled with uncontrollable rage? Express yourself in the comments section…. or find me on twitter (@varunchand_)

About Varun Chand

Profile photo of Varun Chand
Full time nothing doer and part-time Engineer (supposedly). I really hate the Arsenal and that's why I spend so much of time writing/talking/discussing/debating about them. I enjoy mocking YOU because it's fun.

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