Leading clubs in the Premier League are not utilising stadium naming rights to their full potential, a report from Duff & Phelps has revealed.
The report found that only six of the 20 (30 per cent) Premier League teams have a stadium sponsor, compared to 26 of 32 (over 80 per cent) in the United States’ NFL.
Of these six teams, only Bournemouth and Huddersfield – recently relegated to the Championship – have stadium sponsors independent of their shirt sponsor and owner.
By comparison, the average NFL stadium naming rights deal comes in at £6.0 million per season, with the most valuable a £14.3 million deal between the Dallas Cowboys and AT&T.
Turning back to the Premier League, Duff & Phelps found that the ‘big 6’ – Manchester United, Manchester City, Tottenham Hotspur, Liverpool, Chelsea and Arsenal – accounted for 82 per cent of the potential value for naming rights across the league (£116.45 of £142.0 million), up from 77 per cent in 2018.
Despite a difficult season on the pitch, Manchester United’s Old Trafford stadium remains the most valuable proposition, with a potential value of £26.75 million per season.
In second place, Manchester City have closed the gap to less than £5 million from c. £7 million in 2018 by reaching a potential value of £21.90 million, while the biggest movers are Liverpool, whose estimate has risen over 50 per cent to £16.90 million.
“Multimillion-pound Premier League shirt sponsorships have been signed, multimillion-pound sleeve sponsorships are being signed, and it is only a matter of time until multimillion-pound stadium sponsorship follows, said Michael Weaver, Managing Director and Head of UK Valuation Advisory at Duff & Phelps. “Brands just have to be courageous enough to take the first step which will bring the market alive.
“Few would have expected the level of growth we have seen in shirt sponsorship deals which is why there is a huge opportunity for sponsors to capture value in the stadium naming rights market in Europe. If a sponsor were to take out a long-term, fixed value naming rights contract with a good team this could shield them from paying significantly higher prices in the future as the market matures.
“An example of this can be seen with the NFL’s Los Angeles Chargers and the Buffalo Bills. LA’s 20-year 1997 agreement was worth less than $1 million per season whilst Buffalo’s more recent 2016 agreement is worth $5 million per season. This has proven to be value accretive for the LA franchise.
“Financial institutions have long realised the benefits that come with sponsorship which is more than a simple branding exercise. These sponsors have been able to become financial partners with the teams and can sell forecasting, player and stadium financing as well as gain access to supporters.
“With the influencer market set to reach £7.5bn in 2020 and 67% of marketers planning to increase their influencer budgets over the next 12 months, brands could save significant sums of money if they can negotiate access to clubs and players’ social media platforms which are some of the most followed in the world.
“Not only would a brand have direct access to millions of potential consumers, but they could also get exposure to jurisdictions which may have previously been hard to access.”