Leicester City’s £150m Premier League Title Windfall
Tue 3rd May 2016 | Football Sponsorship
Leicester City’s remarkable Premier League title win could see them pocket over £150m according to analysts.
The Foxes secured the title last night (Monday 2nd May) after a late Eden Hazard equaliser for Chelsea denied title rivals, Tottenham Hotpsur a crucial victory which would have kept them in the race.
Having been confirmed Champions, Leicester City can now expect a windfall of over £150m according to Repucom. That money would come mainly from the Premier League “Merit Payment” for winning the league as well as qualification into the UEFA Champions League next season which will drive increased match day revenues in the form of gate receipts and commercial hospitality, as well as higher valuations of sponsorship assets and growth in fan bases globally.
The Premier League distribution of revenue and prize money for finishing top of the table will see Leicester City earn potentially over £90m from winning the league, compared to the £71.6m they received last season.
Aside from an increase in revenue share, this season Leicester City’s TV audiences have soared by over 23% across metered markets globally which will help the club to increase the value of their sponsorship properties next term.
In the UK, audiences have grown from 785,000 to over 1m per game, an increase of 29%, whilst in Italy they have doubled, arguably thanks in large part to the success of Italian manager, Claudio Ranieri.
As a result media values have jumped by 30% globally whilst in the US they have grown by over 70%, showing first-hand the increase in value to current and potential sponsors.
On top of the increased viewership domestically, the UEFA Champions League has this season provided English teams in the group stages with an average TV audience of 4.2m per game which Leicester and its sponsors will now benefit from.
As well as increased TV exposure, the UEFA Champions League will also generate Leicester City increased revenues from group stage fees, a proportion of the competition’s market pool and a participation bonus amounting to a further £33m, aside from a potential performance bonus which could realistically provide an additional £3m.
Qualification into the Europa League could also be on offer (as a third-place group stage finisher in the UEFA Champions League) where a further £20m is available to the winning team.
Spencer Nolan, Head of Consulting, Repucom UK&I, said: “The figures Leicester City could be making are in large part thanks to the Premier League revenue share, which is split relatively evenly across the league, and from Champions League qualification.
Of course if Leicester were to win the Premier League next year, thanks to the increased broadcast rights it could receive nearer £146m for finishing top.
“Regarding growing commercial incomes, the increase in visibility the club have received this season translated into potential brand exposure for sponsors which combined with the association in aligning to the Premier League champions will be key to increasing the club’s commercial revenues this summer.
The task now is to optimise the value of those assets and ensure they attract the incomes Leicester City could now generate.
“Taking into account teams with similar size stadium capacities as Leicester City FC’s King Power Stadium and the effect winning the domestic league had on teams who were not favourites to do so, such as Atlético Madrid in 2014, match day and commercial revenues could well be worth an increased £10m-£15m to the club.
“However in the mid to long term, the growth in fan base remains central to realising the club’s full potential as a commercial entity and whilst it is too early to really evaluate the rapidly growing fan bases we are starting to see across Asia for example, social media provides us an opportunity to start to quantify this surge.”
This season, the number of City’s Facebook page followers has grown by an astonishing 540% representing one of the fastest growing accounts of any sports team globally, rising from 476,000 in August 2015 to over 3m today.
Algeria’s 500,000 followers represent Leicester City’s largest fan base on the social network (16.7%), having grown from 23,000 in August 2016 (+2036%) and with the club’s stand out player and PFA Player of the Season being Algerian born Riyad Mahrez, this goes some way to showing the power of utilising stars in content to engage, grow and reach new fans.
Other markets which have driven Leicester City’s Facebook fan base this season include Thailand with 221,000 followers representing a 117% increase - thanks in large part to the club’s connection to the country through its Thai owners, 162,000 followers from the UK, up from 102,000 in Aug 2015 (a 58% increase) and Italy, where 155,000 people now follow the team, up from 6,000 at the start of the season, an increase of 2293%.
Leicester City FC’s real commercial potential will become clearer in the season break as brands vie to associate themselves to the club and in turn, the league winners aim to maximise the returns their status could command.
Posted by: Aaron Gourley
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