UEFA’s landmark decision to sanction Manchester City with a two year suspension, following financial fair-play (FFP) breaches sent shockwaves through football.
If upheld, the sanction will inevitably have far reaching consequences on the Premier League champions, with it not only hindering the side on the pitch, but also the club’s exponential sponsorship growth.
Insider Sport asked two experts in the brand development and sponsorship sectors, Russell Yershon of Connecting Brands and Phillip Canavan of SEM Global, to find out if Man City is set to suffer further losses as a result of its UEFA ban.
Insider Sport: How will Man City’s sponsorship possibilities be impacted if UEFA’s two season ban isn’t successfully overturned?
Russell Yershon: Sourcing new sponsors may not be as easy as it has been given brands may not want to be associated with what Man City as a club are accused of doing, thus leading to this ban. However, there are plenty of brands who will still look to partner with Man City. With no Champions League football, the asking price of sponsorship with Man City will be reduced, given there will be less matches and coverage during the season.
Driving new sponsors may not be an issue, though the value of the sponsorship will be less.
Phillip Canavan: Regardless of European football, City’s achievements over the last decade will ensure they remain an elite club in terms of commercial appeal and rightly so. All briefs for sponsorship originate with different specific objectives and there will be brands in the market who want a club competing in the champions league as a non-negotiable to fit their strategy, so in some cases City will now miss out.
There are also intangibles at this stage – will top players leave to ensure they have Champions League football? Regional partnership deals will often be driven by the stature of the players at a club so there may be an unseen impact there too.
Insider Sport: How will Man City’s ban impact the club’s current sponsorships?
Russell Yershon: The current club sponsors will have less matches to promote their product and engage with Man City’s fan base. If you’re a training kit partner like Marathon Bet, you miss the opportunity for awareness before a Champions League match.
Current sponsors could seek to request reductions in their investment given this was not what they signed up for when signing the sponsorship agreement. Overall, this will have a negative impact on the club’s current sponsorship and their activation strategy.
Phillip Canavan: It will depend on the main focus of the club’s partners and the drivers for those individual deals. The lack of Champions League exposure will undoubtedly take a degree of value off the sponsorships on a black and white level, reduced number of games/less televised games and missing out on the Champions League knockout stages which are at the absolute pinnacle of club football in terms of quality and commercial appeal.
Insider Sport: Will brands be more wary of sponsoring clubs given these recent events?
Russell Yershon: I don’t think so. The Premier League in particular gives huge global reach and partnering with a team can meet objectives the brand wants to achieve. Premier League Clubs themselves are continuing to grow their reach to be attractive to new sponsors. Moreover, in this digital age, clubs can create new rights to give the sponsor value for their investment.
Before finalising a sponsorship agreement, the club needs to take out a full due diligence report on the brand and it’s background, and the brand will do the same, so any potential negative impact can be found out at this stage.
Phillip Canavan: Well, I can’t see there being any really wide ramifications other than an awareness from sponsors or potential sponsors. It illustrates that FFP and this type of ban from European competition is a reality so I suspect it will lead to clauses and contract inclusions to safeguard sponsors from such circumstances.
However, I don’t see much chance of a diminished appetite for sponsorship in top level football purely because of this one case. A heightened awareness yes, but certainly not an industry wide concern.