The Business Success of the Champions League

In 2013 UEFA reported a global audience of 172.6 million viewers when Bayern Munich defeated Borussia Dortmund at Wembley Stadium.  As the final for this year approaches it is expected that the global viewership will surpass these numbers when Real Madrid and Atletico face off in Lisbon.

So why is the UEFA Champions League such a successful ¨product¨?

If we analyze the tournament from a business perspective we can come up with the following conclusions:

Marketability

The Champions League is one of the most well-marketed sports properties in the industry.  The best way to measure the success of a property is by analyzing its audiences and the levels of engagement and interest that it generates.  As is stated above, the Champions League matches are eagerly anticipated every year drawing huge global audiences throughout the season making it an attractive property for commercial sponsors.

UEFA´s UCL sponsorship program is one that has adopted the ¨less is more¨ approach with only eight official sponsors (Gazprom, Heineken, MasterCard, Sony, Unicredit, HTC, Adidas and Ford, soon to be replaced by Nissan) allowing for true partnerships that add great value to the engagement for both sides.

Furthermore, sponsors get a huge impact in the form of commercial airtime along with on-ground benefits that can be activated during the eight-month duration of the competition, along with logo placements at pre and post-match interviews and VIP ticket allocation.

Branding

UEFA has mastered the art of branding its star product.  Every football fan across the world recognizes the tournament’s official logo and anthem, and regardless of whether a match is played in London, Barcelona or Milan, all stadiums look exactly the same on television.

In addition, all matches are played at exactly the same time on Tuesday and Wednesday evenings having created what is known in the industry as an ¨appointment to view¨ for the past 20 years, building massive brand strength for the property.

Structural Strength

The tournament is made up of the best football clubs from across Europe who in turn have the best players on the planet.  This leads to very competitive matches that are attractive to audiences in neutral markets.  (For example, a match such as the recent semifinal between Atletico Madrid and Chelsea FC is not only viewed in the UK and Spain, but in fact performs very well in many ¨neutral countries¨).  This means that the competition is not only attractive in local markets, unlike many other football leagues and tournaments across the world.

So wherever you may be on May 24th watching the final between Atletico Madrid and Real Madrid, remember that behind all the marketing and commercial success of the Champions League there is a fantastic football product.

Written by:  Diego Valdes, Program Director, Sports Business Institute Barcelona

-The Sports Business Institute Barcelona provides online sports management training for the football industry.

www.sbibarcelona.com
@SBI_Barcelona
@DiegoValdesBCN

A Bid To Stay In Existence: Hereford United’s Struggle

The financial state of those clubs in the top tiers of the English Football League is well documented throughout the media, but sadly those lower down the divisions in non-league, such as Conference Premier side Hereford United, just don’t receive the same amount of coverage and support when they fall into a financial mess.

No league club has gone out of business in the past twenty years, since Maidstone United back in 1992-93, yet it is a common occurrence in the grassroots world, with Chester City, Rushden & Diamonds and Darlington just some of the most recent examples of teams going into liquidation.

Many football fans out of the Herefordshire area can be excused for not knowing about the ongoing situation at Edgar Street due to its lack of coverage by the national media, so here is a quick catch-up of the facts.

  • Losses of £541,000 were announced in March 2014; the largest at the club since it was formed back in 1924.
  • Already this year the club has managed to stave off two winding up orders from HM Revenue and Customs, thanks to the fund raising attempts of Hereford United fans desperate to keep their football club in business.
  • Players at the club have received minimal wages since February and many players are still in fact owed money.
  • United are in deep financial trouble needing to raise £300,000 by the end of May this year otherwise the club is likely to fall from existence.

Hereford narrowly avoided relegation from the Conference on the final day of the season in dramatic style, when an 88th minute winner from Michael Rankine and a late equaliser from Salisbury City against relegation rivals Chester sent the phoenix side down, after only one season in the top flight.

Avoiding relegation is likely to only be a stay of execution, with the likelihood of administration and a ten point deduction for next season’s campaign looming large.

In the 2011-12 season the side were relegated from the Football League and Chairman David Keyte has already admitted that the club has never fully recovered from this. Keyte admitted that he overspent on the playing staff budget in a bid to get back into the Football League.

This same phenomenon happens at almost every level, where clubs set their sights on trying to gain promotion in search of a better future for themselves, often taking large financial risks to try to succeed, sometimes these risks backfire and like Hereford United the club fall into major financial difficulty.

The Conference is notorious for being very difficult league to get out of, with just two promotion places back to the football league available and four clubs are relegated from the bottom of the league.

Media coverage is very importance in a clubs bid to survive through a financial crisis and it makes the financial struggle just that bit more difficult for a non league team when they don’t receive that kind of support.

Portsmouth are a fine example of surviving with help from the media. The club were a Premier League side when their extreme financial difficulties came to light, the media coverage on the situation was massive and it made their battle against survival easier as the world seemed to rally around the side, doing whatever they could to ensure a community doesn’t lose their only team.

The Football Association even allowed Portsmouth to sell players outside of the transfer window to help sort out their finances.

Teams like Hereford don’t seem to gain the same treatment, it begs the thought that if you’re not a big club then your demise is not important to the majority until it’s too late.

Their survival so far is completely down to their incredible support, the fans have raised all the necessary funds to keep the club running, including finance for the two winding up orders and the part payments of the player’s wages made recently.

Comedian Omid Djalili offered his support to the cause raising £20,000 pound from a show in the area whilst Dutch brewer Heineken also pitched in with £10,000 donation.

The club supporter’s trust is preparing a bid for the club, with them confident of completing a deal to take over the club by the end of May before they fall into more trouble.

Vice-chairman of the trust Martin Watson has reiterated to many that the organization feel they have enough money raised to take the club forward and out of trouble and the current board seem open to the idea of the fan run club.

The decision needs to be made fast and its clear to see that to keep the club in existence heavy investment is needed to clear the debts. It may be some while before we see the side back in the football league but for fans that does not matter at this particular moment in time.

Whatever happens the club have only lasted as long as they have because of their incredible fans, Hereford United is clearly a football club close to the hearts of many and life in the area just wouldn’t be the same without their local team.

 

Source: Sean Caulfield