Football’s First Billion Dollar Brand? Not Barcelona, Manchester United!
Man U overtakes Bayern to become the world’s most valuable football club brand
First club with a brand worth over $1 billion
Record-breaking deals agreed despite two mediocre seasons, driving up value
Champions League final victory adds $28 million to Barca’s brand value
But Barca is 6th, having been overtaken by Chelsea and Man City
Southampton is the fastest growing brand, up 89% on 2014
The Brand Finance Football 50, released today, is an annual study conducted by leading brand valuation and strategy consultancy Brand Finance. Football’s biggest clubs are put to the test to determine which command the strongest and most valuable brands.
Billion Dollar Devils
Despite another season without silverware, Manchester United has reclaimed its position at the top of the Brand Finance Football 50, knocking Bayern Munich off the top spot. The Red Devils have become the first billion dollar football brand, with 63% growth bringing total brand value to $1.2 billion.
Champions League Victory can’t Stop Barca’s Slide
Barca’s resounding 3-1 win over Juventus caps a year of stunning successes (including La Liga title and the Copa del Rey) in which the club has made history by becoming the first to win the treble twice. Saturday’s game alone added $28 million to Barca’s brand value, contributing to a overall increase on 2014 of $151 million dollars, bringing the total value of the brand to $773 million.
However as glorious as Barca’s record may be, it simply has not been able to harness its brand to the same extent as rivals Real Madrid (whose brand is $100 million more valuable) or the rapidly growing English teams. Man City and Chelsea have both overtaken it for the first time, pushing Barca into 6th place in the Brand Finance Football 50.
Thanks to sporting success and a squad stacked with legendary figures such as Messi and Neymar, Barcelona actually has thestrongest brand of any club, rated AAA+ by Brand Finance. However ‘brand strength’ only reflects the notional potential of the brand. For a club’s brand to generate income a business team that is as star-studded and tactically brilliant as the team on the pitch is required. That is how to build brand value.
Clubs Need Stars in the Boardroom as well as the Dressing Room
Brand Finance CEO David Haigh comments, “Manchester United’s success has been masterminded by Ed Woodward, the Ronaldo of football’s commercial sphere. As Sir Alex Ferguson developed United’s world-beating reputation, Woodward (and United’s owners the Glazers) capitalised on the brand’s growing power to establish a worldwide fan-base and a range of sponsorship deals unrivalled in their number and value.” That focus on extracting value from the brand, combined with United’s footballing success in the recent past, has allowed Woodward to mitigate the impact of the last two seasons’ mediocre results.
Sponsors’ desire to be associated with the Man U brand appears undimmed. The current shirt deal with Chevrolet (£47 million per year) is worth more than double that with previous partner AON. In 2014 Nike decided to end its longstanding relationship with United, but rather than heralding a loss of faith amongst sponsors, it merely opened the door for another record-breaking agreement. Adidas will be Man U’s kit provider for the next 10 years in a deal worth £750 million ($1.1 billion). On an annual basis, this is more than triple the £23.5 million ($36 million) per year Nike had been paying.
Premier League Payday
Manchester United received another boost to its financial potency this year thanks to a record-breaking new deal for the broadcast rights of the 2016/17, 2017/18 and 2018/19 Premier League seasons. The deal is worth £5.1 billion ($7.8 billion) for the UK rights alone, closer to £9 billion ($14 billion) for the global rights, representing a 70% increase on the last round. The news saw Manchester United’s share price immediately jump 5%. The deal has been a boon to all Premier League clubs however. Each will receive close to £150 million ($230 million) a season, which has seen their brand values surge this year.
The Saints Go Marching On
Southampton is one of them and is this year’s fastest growing brand. The Saints’ brand value is up 89% to $183 million. However Southampton has been more than a passive beneficiary of booming broadcast revenues. Ronald Koeman has masterminded a 7thplace finish that means a club facing administration in 2009 and playing in the third tier of English football in 2010 can look forward to European football next season and the chance to build its own brand on the international stage.
West Ham Moves Onwards and Upwards
West Ham is another club to benefit from the windfall. The Hammers’ 86% growth means puts them in the top 20 for the first time, with a brand value of over $200 million. When the club moves home to London’s Olympic stadium it can look forward to further growth thanks to its increased profile and match-day attendance. Tara Warren, Executive Director, Marketing and Communications at West Ham comments "When Vice-Chairman Karren Brady arrived at West Ham five years ago, she instilled a belief that we could establish the club as a truly global brand. The re-brand that my team have executed over the past year showed that desire to create a more ambitious and successful future. Our focus now is on maximising the potential of our imminent move to our magnificent, 54,000-seat new stadium. West Ham will always honour and celebrate its great history, but today's findings show that West Ham United is also fast becoming one of the most investable brands in world football."
Juventus has just missed out on a place in the top ten after what was so nearly a perfect season. Victory in Serie A and the Coppa Italia made it a triumphant year for manager Massimiliano Allegri despite this weekend’s loss. On pitch success has been matched by lucrative commercial deals. Adidas will replace Nike as the club’s kit supplier in a €139.5 million deal, contributing to a 42% increase in brand value to $350 million. Juventus appears to have made a comprehensive recovery from the scandals that dogged the club a decade ago. The sale of a 48% stake in AC Milan to Thai businessman Bee Taechaubol suggests that global audiences and investors are beginning to see Serie A clubs as prospects that cannot be ignored. If Juventus continues to perform so well, in particular in Europe, prospects for further growth look good.