Business Irish

Wednesday 15 August 2018

Stadium sponsorship is name of the game as sponsors chase a big score

Ellie Donnelly

Ellie Donnelly

Lansdowne Road is now the Aviva Stadium, the former Musgrave Park in Cork is Irish Independent Park, and there's a Kingspan Stadium at Ravenhill in Belfast.

Stadium naming rights are already big business here, even if sponsors can, so far, only gaze longingly at GAA citadels like Croke Park from afar.

And there's evidence they work to build brand recognition. Aviva really only became a household name here after striking a €4m-a-year naming deal for Lansdowne Road, which it has just extended to 2025.

According to new research by Duff & Phelps, the potential market rates for UK stadium naming rights grew to €152.7m in 2017, an increase of over 80pc on the 2013 market rates of €84m.

However, the market here is underdeveloped, Duff & Phelps said.

Interestingly, the study found that in North America, where naming-rights deals are very common, new sponsors can be reluctant to take on a ground that's previously had someone else's name on it.

In the UK, Manchester United's Old Trafford Stadium could command €29.5m a season to offer seasonal naming rights to its 75,643-seater stadium, more than any of its rivals, Duff & Phelps said.

Manchester United's tally is potentially €7.9m more than that of neighbouring Manchester City, which it currently lags behind in the Premier League, the report found.

That's partly because stadiums that have never sold naming rights before can charge a premium, at least the first time.

Niall Cribben, who is a director at valuation and corporate finance advisor firm Duff & Phelps Ireland, said there's also a big potential market here in Ireland.

"There is a huge opportunity for stadiums in Ireland to explore stronger commercial agreements with top brands," Mr Cribben said.

"This will be good for the brands, good for the stadiums and the teams that fill them and ultimately good for fans as stadium experiences will undoubtedly improve."

The data, however, shows that in the UK the really big money is skewed to a tiny number of the most elite clubs.

Out of the €152.7m potentially attributable to seasonal Premier League naming rights, almost 80pc of it would go to the top six English clubs that regularly play in European competitions, highlighting how much a club's performance is directly linked to its financial performance.

The big two Manchester clubs alone would generate over a third of the Premiership's potential market of €152.7m, while the top five London clubs could generate 40pc of the total, the study found.

While many clubs are slow to sell rights, sponsors are keen to buy.

"Sponsorship demand for the content rights of the top clubs in the Premier League shows no sign of abating," said Trevor Birch, former CEO of Chelsea FC and now managing director and head of UK and Ireland Sports at Duff & Phelps.

"Although the UK hasn't embraced stadium naming rights as enthusiastically as the US, its potential to become an important revenue stream is highlighted by these figures."

In England, Arsenal, Manchester City and Leicester City are among the 40pc of Premier League clubs that have granted stadium naming rights to their grounds in recent years.

Irish Independent

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