Soccer News & Notes, November 2, 2010

CONMEBOL Copa Libertadores’ door open to MLS teams
Monday, November 1, 2010

The Confederacion Sudamericana de Futbol (CONMEBOL), South America’s football governing body, has opened the door of its flagship club competition, the Copa Libertadores, to U.S. and Canada teams.

Paraguay’s Nicolas Leoz, president of CONMEBOL, told Brazilian sports daily Lance! that the addition of Major League Soccer clubs to the tournament depends on an agreement with the Confederation of North, Central American and Caribbean Association Football (CONCACAF).

“We’ve wanted to do that for a long time, but it doesn’t only depend on us,” he said. “The level of soccer in the US is growing; the door is open.”

The best Mexican teams have been taking part in the Libertadores for 13 years now, with Chivas Guadalajara reaching the final this year, only to be beaten by Brazil’s Internacional.

Source: SoccerEx Business Daily

No change to ’18, ’22 World Cup decision day
Monday, November 1, 2010

The voting process to determine the hosts of the 2018 FIFA World Cup will go ahead as planned on December 2, the FIFA Executive Committee has confirmed.

Despite recent investigations into the integrity of voting and bidding processes, a FIFA Executive Committee meeting held in Zurich at the end of last week stipulated that voting will still take place on the same day, with the 2018 vote scheduled to take place first, with the 2022 decision following.

To win the right to host the competition, a bidder must obtain an absolute majority (50 per cent + one) of the votes of the FIFA Executive Committee members present. In the event of a tie when only two bidders remain, the FIFA President will have the casting vote.

The order of the presentations by the 2018 and 2022 FIFA World Cup was also drawn during the meeting. On December 1, the Australian presentation will be followed by Korea Republic, Qatar, USA and Japan. On December 2, the Belgium/Netherlands presentation will be followed by Spain/Portugal, England and Russia.

Source: SoccerEx Business Daily

DAILY DIGIT….

7 – Out of 20 teams in the EPL, the number that have jerseys "emblazoned with the names of online betting companies" (WALL STREET JOURNAL, 11/1).

Soccer’s Biggest Signings
By RICHARD GILLIS
Wall Street Journal
November 1, 2010

The biggest deals in football used to be multimillion dollar transfers to land the sport’s biggest stars. These days, arguably the most important signings for Europe’s top clubs are the corporate sponsors on the front of their uniforms.

Research released last Thursday paints a rosy picture of the commercial value of European club football, with shirt sponsorship up nearly 20% across the major leagues.

Manchester United’s Park Ji-Sung vies with Tottenham Hotspur’s Rafael van der Vaart, Saturday. Their clubs’ relationships with sponsors reveal a growing divide.

The European Jersey Report by sports marketing consultancy Sport+Markt aggregates the amount of money received from shirt sponsorship by all clubs competing in the top leagues of England, Italy, Spain, France, Germany and the Netherlands. The study showed that shirt sponsorship revenue for these clubs increased by 18% to €470.7 million ($656.2 million), a jump of €75.2 million from previous studies.

The 20 teams in England’s Premier League attracted the most money—a combined total of €129 million, up from €84 million—ahead of Germany’s Bundesliga (€118.5 million), Serie A in Italy (€65.9 million). For the first time since the company began compiling its findings, clubs in Ligue 1, the French first division (€58.8 million) placed higher than those in Spain’s La Liga (€57.5 million). In all, only Serie A recorded a decline in total revenue for its clubs.

Beneath the headline figures, however, the detail tells a different story. Far from being a sign of health, the study reveals the extent to which the world’s most popular sport has grown dependent on money from the gambling sector. It also provides evidence of the broad and widening divide between a small number of elite clubs and the rest, a fault line that threatens to undermine the long-term health of the sport.

Two sectors dominate jersey sponsorship: banking and gambling. The latter is largely due to the liberalization of the French gambling market, said Gareth Moore, a director for Sport+Markt. France opened up its online horse-racing and sports-betting industry to competition in June, relaxing a state monopoly on gambling that traces back to the 16th century.

Online gaming companies such as BetClic Enterprises Ltd and Bwin Interactive Entertainment AG now see football shirts as a way of differentiating their brands in a very competitive market. BetClic ranks third among a host of new brands entering the football market with €20 million paid for jersey sponsorship deals with Juventus FC, Olympique Lyonnais and Olympique Marseille.

This season, seven of the 20 clubs in the English Premier League have jerseys emblazoned with the names of online betting companies and in Spain, Real Madrid’s famous white jersey carries the corporate logo of Bwin, the club’s major sponsor following a deal worth roughly €23 million.

"Betting and gambling have helped to deliver significant revenues for football clubs across Europe in what are challenging economic times and the importance of the sector cannot be overlooked," said Mr. Moore, who suggests future liberalization of the gambling market, particularly in Germany, will ensure the market for elite football jerseys continues to rise.

Despite this optimism, the presence of so many online gambling companies raises issues beyond football. "It’s an example of how gambling is thrust in our faces following the liberalization of the law," said Professor Jim Orford, an expert in the psychological effects of gambling at Birmingham University in the U.K. Children are particularly exposed to football sponsorship, according to Prof. Orford, since there is no way to stop them seeing the logos on television.

This talks to another point: the perception, commonly held among marketers, that football shirt sponsorship is in essence a blunt instrument.

In modern marketing terms, shirt sponsorship deals are "a bit of a relic," according to Tim Crow, chief executive of U.K.-based sports sponsorship consultants Synergy. "It’s really a 20th century media buy—the players as walking billboards—rather than 21st century sponsorship, which is a highly sophisticated form of marketing involving engagement and dialogue with consumers," he said.

Mr. Crow suggests the market for jersey sponsorship will continue to be sustained by companies with low brand awareness, who will buy it just for the media exposure. But only the big clubs are price-setters, because of the amount of fans they have around the world. "The other clubs are price-takers because they have much smaller fan bases," he said.

This is true of each of the European leagues. In the Premier League the disparity between the elite few and the rest is stark, with the ability to offer a global media platform the dividing line between haves and have-nots.

Jersey sponsorship revenue from just three clubs—Manchester United, Liverpool and Chelsea—makes up 49.1% of the €129 million total received by all 20 league teams. Standard Chartered PLC, the U.K.-based but Asia-focused bank, signed up with Liverpool for more than €23 million a year, the same amount paid by U.S. insurance broker Aon Corp. to splash its logo on Manchester United’s jerseys.

Lower down the league, however, teams such as Blackpool and Wolverhampton Wanderers operate on a fraction of these sums. The shirt sponsorship deals for those two clubs are estimated at less than €1 million.

The inability to fetch a competitive price has forced some clubs to innovate. Newly promoted West Bromwich Albion sought permission to sell its shirt on a match by match basis, with local shop-fitters Esprit signing up for a non-televised game, following similar short-term deals with betting companies Blue Square Ltd and Victor Chandler International Ltd.

Tottenham Hotspur even sold its shirt twice—once for Premier League games and the other for games in the UEFA Champions League. The commercial realpolitik of such a deal was revealed by Mike Lynch, chief executive of software company Autonomy PLC, which sponsor’s Spurs’ league shirt.

"We were getting phone calls from every sport under the sun as normal sponsors disappeared," Mr. Lynch said. "The [Spurs] price fell to a fraction of the normal rate the closer we got to the season." Despite being the biggest software company in the U.K., Mr. Lynch said the firm’s brand is virtually unknown to the general public, a situation it sought to rectify ahead of a consumer launch over the next year.

Manchester United have recently set about carving their rights into smaller region-specific chunks, with three new partners announced including communications group Telekom Malaysia, Turkish Airlines and South Africa’s MTN Group. The club also has country specific partnerships with firms including India’s Bharti Airtel and Saudi Telecom Company. "These companies have rights to Manchester United IP around which they can activate globally," said Richard Arnold the club’s commercial director.

In other words, the rich just got richer.