How can Leicester City ensure long-term success after reaching Champions League milestone?

A clearly emotional Claudio Ranieri shed tears of joy yesterday as Leicester City clinched a coveted Champions League spot next season and moved one step closer to realising the impossible and winning the Barclay’s Premier League.

Ranieri’s face portrayed the poignancy of the occasion and the unexpected success which his team have fought so hard for this season but the sport moves fast and already questions are being asked of the club’s ability to ensure this season’s accomplishments can be mirrored in the preceding campaigns, particularly as Europe’s elite eye up Leicester’s star players.

There are a myriad of reasons that Leicester City have captured the hearts of the sporting world, but perhaps the most significant is that their achievements stand in defiance of the financial inequalities which have come to define football over the past 25 years. Only five teams have won the trophy since English football was rebranded in the 1992/93 season and three of those- Blackburn, Chelsea and Manchester City- did so with the help of significant financial backing of outside money.

History’s narrative shows that while titles cannot necessarily be bought, money talks and it has a loud and overbearing voice in announcing who is crowned champion.

The new £5.14bn broadcast deal between Sky and BT looks likely to exacerbate this defining aspect of the league. Next season even the bottom placed club will receive £99m while the champions will earn more than £150m in prize money on top of additional fees paid to clubs who stage more televised matches.

The reality for Leicester City that even if they win the title, advertisers will still not view the club in the same way as they do the established Big Five. From a global brand point of view, they have less significant appeal – apart from Thailand thanks to their ownership – and less international heritage, compared to a club like Liverpool or Manchester United. Of course, their fans here might argue the opposite, but the harsh commercial truth is that a new brand looking to invest in a Premier League team next season would not have Leicester at the top of their list, even if they win the title.

“It’s true that Leicester will be more attractive to sponsors next season – they will be on TV more, and compared to United, Arsenal or Manchester City, it will be less expensive to become a club sponsor or partner," said Andy Clilverd, commercial director at the sports marketing consultancy, Stadia Solutions.

"Indeed, any Leicester partner next season is likely to get an extremely good return on their investment. So, they will undoubtedly make some short-term money from advertisers on the back of their success, but I can’t see it being a long-term gain unless their success continues over several years. The chances of them repeating their feats next season are too slim. However, there will be a significant amount of prize money, merit bonus and Champions League cash coming their way. That’s not to be sniffed at, but it doesn’t mean brands will suddenly see them as the next big thing.”

If Leicester City are to continue reshaping football as we know it then they will need to be as impressive off the pitch as their team have been on it to ensure that they can narrow the gap between the Premier League’s biggest clubs.

A key aspect of this is building a global fan base which in turn will attract sponsors and strengthen revenue streams. This takes time however, last season the club only narrowly avoided relegation and prior to that they were in the Championship. Big teams like Manchester United and Liverpool have earned their fans through decades of fame and success.

“A Champions League spot gives them the chance to keep raising their profile, but plenty of teams have had one season in the Champions League then sunk back into relative obscurity,” insists Nick Keller, chairman of the Sport Industry Group.

The potential is there though for the club to buck this trend and cement a place for themselves in the top end of the Premier League. King Power’s £39m acquisition of the Foxes six years ago is key to this narrative as it gives the club a strong footing in the flourishing Asian market.

“Their Thai owners will help them expand into new territories, especially the rapidly expanding Asian football market, and they need to seek international partners that will do the same,” says Keller.

Keller believes that the club have “the potential for sustained commercial success and international growth” but warns that the Champions League “isn't a magic wand that you can just wave for success”.

“They will need sustained on-field success to continue major growth off the field and commercial success will be required to help deliver the funds for Leicester to compete at the top of the game.”

Joel Seymour-Hyde, vice president of strategy at sports marketing firm Octagon, points to one such strategy which could help the club generate more sponsorship revenue.

“The club could benefit from its relationship with King Power with its front of shirt sponsorship. Normally it would be hard to exit a shirt sponsorship deal early however because King Power are also the owners they could move to be a partner and free up the shirt space to the highest bidder.”

On-pitch success is evidently key to attracting more lucrative deals, especially in Thailand where more casual fans tend to place their allegiance and money on the clubs which are winning. Last year when the team were fighting relegation the club shop in central Bangkok resembled something of a ghost-town despite King Power plastering Leicester City merchandise and branding throughout Bangkok's busy international airport, where it has had something of an monopoly for the past decade on the duty-free spending for the 50 million plus passengers. Now King Power has struggled to keep up with the demand of shirt sales in Thailand.

Business development director at Pitch, Paul McCormick, says that if the current success continues then the club will be faced with a commercial strategic choice.

“The club can continue with its approach of securing global partnerships across a number of categories. Or, it can develop a multi-regional partnership strategy signing a number of deals with brands in the same category. Both these approaches are successfully implemented by Premier League clubs.

“For both approaches, Leicester City will be keen for partners to sign multi-year partnerships and get partners to buy into the long-term success of the club.

“Otherwise, as Chelsea have shown this season, things can change very quickly on the pitch.”

Ranieri’s post match comments this weekend echo sentiments which he has repeated time and time again this year: “We must stay focused”. This mantra will remain key for the club’s sponsorship pursuits for the remainder of the year as they try to capitalise on the commercial opportunities that the players’ heroic efforts have afforded them. The Thai owners will serve as a significant stepping stone towards building the club’s profile but Leicester City will need to show adeptness both on and off the pitch if they are to avoid being another asterisks in the narrative of money shaping football.

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