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27 October 2010 - 5:02pm | posted by | 0 comments

The Times, They Are a-Changin’

As Bob Dylan prophetically wrote: “The times, they are a-changin’. During my time spent here in the UK, I have come to see that times, at times, struggle to change. We could debate that this is a good thing, but I’ll address the other side of the debate; should they be changing?

As a Canadian who is a massive baseball and football fan, I have been watching the purchase of Liverpool FC with great interest. As we see the American influence on English football grow, it begs the question: will football in England be Americanised? And if so, will it be a good thing?

Most of the largest and most globally renowned franchises on the planet are from America. Yes, I said ‘franchises’ not ‘sporting clubs’, and I choose this term to help express my point. A franchise is born from a league that allows it to trade under the master brand, in this case the Barclay’s Premier League. Not that I need to provide a history lesson to all you readers, but in 1863 when the FA was formed, any club that joined the league was under their guise. This is no different from any sporting model in North America. It may be splitting hairs, but this is important to point out, as there is persistent hyperbole to the contrary here in England. And this is what I’m challenging.

Liverpool FC, which has a fantastic history, is often referred to as a big club. Some may say a global brand, though I am well aware of the faux pas of calling a football club a brand. They have been revolutionary in the modern game, both on the pitch and by promoting themselves internationally. Over the history of the English game only Manchester United has surpassed Liverpool as a global entity. Part of Liverpool’s growth and popularity led to them being the first English club to have a shirt sponsor, with Hitachi emblazoned across the front of the iconic strip in 1977. This set a precedent for additional sponsorship revenue in English sport.

As we move to present day with the takeover by NESV now complete, could Liverpool take the next step to add to their revenue stream? If done right, they could reclaim their place amongst the global leaders in football.

It must be noted that I’m a Newcastle Untied fan, and have been for over 20 years. So what I’m about to recommend I would gladly accept for my club and its iconic ground, St. James’ Park. As most readers will know, Mike Ashley made the decision to rename St. James’ Park “SportsDirect.com@St. James’ Park” in lieu of a long-term revenue-generating sponsorship. The tubby beer swiller upset me, as there would be no new money coming into the club as a result of the name change. But if St. James’ Park became, for instance, ‘Newcastle Brown Ale Park’, I would not be too bothered – with a caveat. I would see this as an opportunity for the club to buy additional players in a football market that is in a state a flux – where the rich are getting even richer, and the poor can’t compete.

With NESV taking over a club that is now finding it difficult to compete in the current market, there may be an opportunity to find new areas of financial growth and brand building. So I ask the question, could Anfield become “Carlsberg Stadium” if it meant the team could compete for the Premier League title? What is more important, the ground or the trophy?

Currently, top stadium sponsorships in North America (a bigger league revenue-wise, although Liverpool is an elite club visibility-wise) can range from £4.3 – £6.3M per annum. This could buy Liverpool an additional ‘Liverpool quality’ player every two years, or take them from buying £12-18M players to £16-24M players, to give an example. And this doesn’t include the residual aspects of stadium sponsorship.

When you look at it this way it seems nominal, but I am using averages based on NFL numbers as well as the Emirates deal with Arsenal as a yardstick. When you take into consideration the four-year, £80M deal between Liverpool and Standard Chartered, the plot begins to thicken. Notably, having the shirt sponsorship deal last only four years is beneficial, as at the end of four years with a new or improved ground on the way, the shirt sponsorship could be included in the overall long term sponsorship package. Along with the stadium naming rights, this could make it the largest integrated sponsorship agreement in English football history. Liverpool supporters have been displeased that they play second fiddle to Manchester United when it comes to sponsorship – now is the moment when this could change.

Additionally, this type of integration can allow the sponsor to actually invest in the team and become a part owner of the club similar to the case of the Houston Astros in Major League Baseball. This can strengthen the sponsor’s desire for the team’s success and for growth of the team’s bottom line. It all may seem a bit dirty to the purist football supporter, but there aren’t too many chaps from the Middle East kicking around waiting to spend billions on your football club. If you want your team to compete, you need to think a bit differently as a supporter.

The current precedent has been set by Arsenal, the best-run club in the country. When moving from Highbury to the majestic Emirates Stadium, they found new revenue opportunities that have made the club more than sustainable. Though NESV have ‘bailed out’ Liverpool, they will want to be profitable and Arsenal will most likely be the model. Some may say ‘let’s wait until we build a new ground’, but why wait? If a stadium sponsorship agreement is inevitable, then the club may as well capitalise now, before the situation becomes dire.

As for the persistent distain for American owners, for every George Gillett bottling it, there is a Randy Lerner making Aston Villa a financial success. The English game wants to be seen as the best in the world but still remain local in feel. It looks like that’s a bit of a pipe dream; as you expose the potential for profit through TV deals and sponsorship pounds, you begin to price out the limited pool of British billionaires.

As the famous saying goes, “the definition of insanity is doing the same thing over and over again and expecting different results.” Isn’t that the definition of English football at the moment? How many poor owners do you need to see before you decide to do things a bit differently? How many big clubs need to fall? The times they are a-changin’, it’s time to change with them.

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