Clubs catching Premier League in sponsorship race

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Football News

While Europe's economies are gripped by fear, inaction and ineptitude, and Britain braces itself for bristling cuts and years of austerity, England's Premier League continues on it's remarkable growth story.

The league's resilience seemingly knows no bounds, and yesterday it announced an extension to its naming rights sponsorship deal. Barclays bank, currently embroiled in reputation-shredding rate-fixing scandal, has agreed to pay £120million for global title sponsorship of the Premier League through to the 2015-16 season.

The British bank, which has partnered the league since 2001, will shell out an extra £12.5million a year to keep its brand name planted in front of the Premier League - a small price to pay to repair a reputation shattered by a $435million fine.

The Premier League is obviously happy to continue its relationship with Barclays - all scandals aside - but, as far as brand names go, the Premier League is only as successful as its members. Fortunately, in recent seasons, the clubs which make up England's top flight have flourished - at least those towards the top of the table.

Manchester City's £340million agreement with Etihad airways was historic because of its size, and raised 'fair value' questions due to Sheikh Mansour's close relationship with the Abu Dhabi-owned airline.

The 10-year deal, described by City's then-CEO Garry Cook as "one of the most important arrangements in the history of world football", gives Etihad the stadium naming rights, shirt sponsorship, and the exclusive naming rights to the new Etihad campus - an 80-acre training complex and business park. It also props up City's balance sheet - hammered in recent seasons by close to £750million in lavish player, infrastructure, and debt-reducing spending.

The length of the agreement makes the headline £340million number appear larger than it actually is, but at £34million per year, it's only slightly less than the Premier League's annual sponsorship income. The league's new Barclays deal nets them £40million a year, while City now take home £20million a season in shirt sponsorship alone, and £34million a year in total.

The deal, which puts Roberto Mancini's side on parity with Liverpool's Standard Chartered agreement and Manchester United's Aon sponsorship, is still a massive commitment and demonstrates the formidable clout enjoyed by the league's top teams.

For comparison, note that Bolton received just £750,000 last season in shirt sponsorship, Sunderland, Stoke, and Wigan just £1million each.

The top six clubs are negotiating ever more lucrative agreements, with companies eager to piggyback on the league's global appeal. The fact that City's sponsorship agreement is worth almost as much of the entire Premier League's naming rights clearly demonstrates the financial power of the individual clubs - but those clubs are increasingly leaving the rest of the Premier League behind.

Of course, where the Premier League really makes it's money is through the live TV rights. Broadcast to an estimated 650 million homes across the globe, the Premier League reaches billions of people, and its most recent deal reflects that reach - the three-year agreement was worth a reported £3billion.

BSkyB, the main bid winner, will pay £760million a year for 116 games - which represents a whopping £6.6million per live fixture - while the BBC Match of the Day highlights package is worth another £180million. The huge increases - in this case a massive £1.25 billion rise from the last TV deal- reflects the growing appeal of the Premier League's top teams.

Annual pre-season tours to Asia and America used to be the preserve of a handful of clubs - perhaps only Manchester United - but now the likes of Aston Villa and Blackburn regularly jet out to Hong Kong for marquee friendly matches. These smaller clubs are looking to scrape off a piece of the lucrative overseas market, but they can't compete with the likes of City, United, Chelsea and Liverpool.

Shamed bank Barclays has agreed to pay a handsome premium to promote their global banking brand because they can count on these unbelievably stable, freakishly popular worldwide sporting brands, each with a global reach into the fastest, and therefore most financially desirable, emerging markets.

Clubs like Manchester City and Manchester United have seen their individual sponsorship agreements rise massively in recent seasons. How long before a single club earns more in yearly sponsorship than the league itself? Manchester City are only £6million short on an annual basis now, and further inflation will likely push their next deal much higher.

When that happens will clubs have outgrown the league? Rumours of a European football league have already been mooted - abet not with any seriousness - but clubs may feel their brands can only grow further by permanent association with the continent's other elite clubs.

A league that spans the continent, including Barca, United, City, Real Madrid and AC Milan could be the logical next step after the Champions League.

The disparity in the Premier League sponsorship table already demonstrates the inequality inherent in English football. Pretty soon, the top clubs could even be bigger than the league itself.

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