BRANDFINANCEfootball50The annual report on the world’s most valuable FOOTBALL brands | MAY 2013Fussball’sComingHomeBayernBecomesFootball’sMostValuableBrand®
2 | BRANDFINANCE® football 50 | MAY 2013ContentsThe BrandFinance® Football 50is published by Brand Financeplc and is the only study to rankthe top 50 most valuable FootballclubsBrand Finance plc3rd Floor, Finland House,56 Haymarket, LondonSW1Y 4RN United KingdomTel: +44 (0) 207 389 9400Fax: +44 (0) 207 389 email@example.com Executive Summary4-5 The BrandFinance® Football 50final results6 Our Verdict7-15 A Deeper Look at the top 1016-18 What the Clubs Say; Arsenal, Spurs & Juve19 Glaze of Glory: Manchester United andThe Glazers20 Bundesliga vs Premier League21 Football Shirt Brands: Cutting aFine Figure22 Sponsorship: The Growing Value ofFootball Sponsorship23 The Strength of the Brand:A Brief Look at KPI’s24 Methodology: How Were the RankingsCompiled?25 About Brand Finance & Our Services26 Contact details 27 Appendix28-29 USD table30-31 GBP table32-33 EUR tableContentsBRANDFINANCE®football50
MAY 2013 | BRANDFINANCE® Football 50 | 3• FC Bayern München take the number one spot this year after atremendous domestic and European season. On pitch successcoupled with some of the strongest financials in sport sees theirbrand grow to $860m.• Manchester United FC drop to second place, the departure of SirAlex Ferguson leaving uncertainty over whether the Red Devils cancontinue to be successful without him. Their value falls marginally to$837m, but are still only one of two football brands deserving of anAAA+ brand rating, the strongest rating available.• Spanish and Italian football again sees tough economic conditionshamper their growth. Despite this both Spanish giants have grown,Real Madrid CF up to $621m just ahead of FC Barcelona at $572m.• Juventus FC ($180m) and SSC Napoli ($101m) both continued theirreturn to form at the expense of FC Internazionale Milano who takeanother dip after a poor season to $151m, while rivals AC Milan see aless dramatic fall in value to $263m.• Elsewhere Turkish and Brazilian brands made great strides thanksto their booming emerging economies and passionate domesticfanbases. Galatasaray AŞ are our highest ranking Turkish teamvalued at $116m, while SC Corinthians Paulista ($103m) take thehonour of highest ranking non-European club.• Average brand growth across the top 50 is a healthy 7%. Attendanceshave remained solid, with many top teams filling their stadiumsweek-in week-out coupled with long season ticket waiting lists.• There are now 10 different kit suppliers to the top 50 clubs in thishotly contested and increasingly lucrative marketplace. Adidaslead the pack with 18 supplier contracts while Nike follows with 14deals. Both however are feeling the pressure of new market entrantsWarrior and Under Armour.Welcome to The BrandFinance® Football 502013 report highlighting the world’s mostvaluable Football brands.Executivesummary
4 | BRANDFINANCE® football 50 | MAY 2013BrandFinanceFootball50TOP 50 FOOTBALL BRANDS 1-25Rank 2013 Club CountryBrand Value2013 USD MILLIONS 2012 USD MILLIONS change Brand Rating1 FC Bayern München Germany 860 786 9% AAA2 Manchester United FC England 837 853 -2% AAA+3 Real Madrid CF Spain 621 600 4% AAA+4 FC Barcelona Spain 572 580 -1% AAA5 Chelsea FC England 418 398 5% AA6 Arsenal FC England 410 388 6% AA+7 Liverpool FC England 361 367 -2% AA8 Manchester City FC England 332 302 10% AA-9 AC Milan Italy 263 292 -10% AAA-10 Borussia Dortmund Germany 260 227 15% AA11 FC Schalke 04 Germany 259 266 -3% AA-12 Tottenham Hotspur FC England 219 225 -3% AA13 Juventus FC Italy 180 160 12% AAA-14 AFC Ajax Netherlands 162 184 -12% AA15 FC Internazionale Milano Italy 151 215 -30% AA+16 Hamburger SV Germany 144 153 -6% AA17 New Galatasaray AŞ Turkey 116 NEW NEW A+18 Olympique de Marseille France 111 168 -34% AA-19 SC Corinthians Paulista Brazil 103 77 34% AA20 SSC Napoli Italy 101 85 20% AA-21 Olympique Lyonnais France 101 120 -16% AA-22 New Fenerbahçe SK Turkey 95 NEW NEW A+23 Bayer 04 Leverkusen Germany 90 64 41% AA-24 Paris Saint-Germain FC France 85 64 34% A+25 VfB Stuttgart Germany 83 71 18% A+
MAY 2013 | BRANDFINANCE® Football 50 | 5TOP 50 FOOTBALL BRANDS 26-50Rank 2013 Club CountryBrand Value2013 USD MILLIONS 2012 USD MILLIONS change Brand Rating26 Valencia CF Spain 83 68 22% AA-27 VfL Wolfsburg Germany 82 66 25% A28 AS Roma Italy 82 85 -3% AA29 West Ham United FC England 82 70 17% A30 Newcastle United FC England 81 86 -6% AA31 Aston Villa FC England 80 87 -8% AA-32 SV Werder Bremen Germany 79 68 17% AA-33 Everton FC England 78 79 0% AA-34 Fulham FC England 75 65 16% A+35 Sunderland AFC England 72 66 10% A+36 New Beşiktaş JK Turkey 71 NEW NEW A+37 Club Atlético de Madrid Spain 67 50 34% AA-38 New Santos Futebol Clube Brazil 65 38 70% AA39 São Paulo FC Brazil 62 58 6% A+40 PSV Eindhoven Netherlands 61 74 -18% AA-41 Stoke City FC England 59 55 6% A+42 New SL Benfica Portugal 56 NEW NEW A+43 Sevilla FC Spain 56 49 14% AA+44 Celtic FC Scotland 55 64 -13% AA-45 CR Flamengo Brazil 55 46 20% A+46 SC Internacional Brazil 55 51 8% A+47 West Bromwich Albion FC England 54 NEW NEW A48 FC Girondins de Bordeaux France 53 76 -30% A+49 ACF Fiorentina Italy 52 46 15% AA-50 SS Lazio SpA Italy 52 46 12% AA-BrandFinanceFootball50
6 | BRANDFINANCE® football 50 | MAY 2013OurVerdictWelcome to the BrandFinance® Football 50 2013 reporthighlighting the world’s most valuable Football brands.• This year’s edition of the BrandFinance® Football 50 seesa new champion, FC Bayern München take the number onespot after a tremendous domestic and European season. Onpitch success coupled with some of the strongest financials insport sees their brand grow to $860m.• Manchester United FC drop to second place, the departureof Sir Alex Ferguson leaving uncertainty over whether the RedDevils can continue their success without him. Their valuefalls marginally to $837m, but is still only one of two footballbrands deserving of an AAA+ brand rating, the strongestrating available.• Spanish and Italian football again sees tough economicconditions hamper their growth. Despite this both Spanishgiants have grown, Real Madrid CF up to $621m. They arejust ahead of FC Barcelona at $572m.• Juventus FC ($180m) and SSC Napoli ($101m) bothcontinued their return to form at the expense of FCInternazionale Milano who take another dip after a poorseason to $151m, while rivals AC Milan see a less dramatic fallin value to $263m.• The Milan Contingent is struggling with aging stadia, fallingattendances and crowd trouble. Serie A was the only leaguein Europe to see an average attendance fall for 2012/13 andis desperately in need of a rebrand if it wishes to reignite itsglobal appeal to the levels experienced during the 90s.• Elsewhere, Turkish and Brazilian brands made great stridesthanks to their booming emerging economies and passionatedomestic fanbases. Galatasaray AŞ are our highest rankingTurkish team valued at $116m, while SC CorinthiansPaulista ($103m) take the honour of highest ranking non-European club.• Average brand growth across the top 50 is a healthy 7%outpacing their domestic economies. This shows that top levelsport is largely recession proof with almost all clubs reportingsolid revenue increases.• Attendances have remained solid, with many top teams fillingtheir stadiums week-in week-out coupled with healthy seasonticket waiting lists. Clubs are not resting on their laurels withall working hard to improve the match-day experience via newtechnology and upgrades.• Manchester City FC enjoyed a 10% jump in brand value to$332m despite a disappointingly trophy less season. A failureto build on last season’s success despite the highest wage billin Europe has seen Italian manager Roberto Mancini shownthe door. The club’s recent pioneering announcement tostretch the brand into another market teaming up with theNew York Yankees to form a new MLS franchise opens upa new dimension of commercial and fan experiences for theclub.• Beyond Europe, the top 50 contains 5 Brazilian clubs headedup by Corinthians in 19th place. Whilst revenues in theBrazilian game remains well below European equivalents,the combination of the FIFA World Cup 2014 and 2016Summer Olympic Games being held in Brazil is driving aninflux of investment into the sporting sector and will provideopportunity for the country to shine on a global platform.• On the front of the shirts, this year we saw a continued rise inthe average price paid by sponsors to be associated with top50 clubs. Manchester United’s deal with Chevrolet set anew record when it announced the $559m 7 year agreement.Emirates continued their deep affiliation with the game andnow sponsor 4 of the top 25 teams. Qatar Airlines burst intothe sports sponsorship arena and its offer of $38m per yearwas enough to lure Barcelona to breaks its 103 year traditionof not having a corporate brand on its shirt. This year’s tablesees a more diverse portfolio of sectors taking up shirtssponsors as more companies recognise the branding benefitsthe beautiful game can bring.• Providing the kits to the top 50 now sees 10 separate providersin this hotly contested and increasingly technical marketplace.Adidas lead the pack with 18 supplier contracts while Nikefollows with 14. Both however are feeling the pressure of newmarket entrants Warrior and Under Armour.• The two significant US brands in Warrior and Under Armourhave fuelled an upward trend in annual payments thatsuppliers are willing to be aligned with such an irresistibleplatform. For supplier brands, the awareness that top tierfootball provides combined with the return on investmentavailable from replica sales makes kit supplying an attractiveinvestment. We have recently seen Arsenal, ManchesterCity and Lazio leave long-term supplier relationships to entermore lucrative shirt deals. Combined with this competitivelandscape is the continued sophistication of the jersey,optimised by the fact that Lyon “the City of Light” will have a“glow in the dark” feature on its new third kit.• Outside the top 50 we have seen some other interestingbranding trends with the most extreme being Cardiff Citywhere we saw the “bluebirds” go red to expand the clubsappeal in “international markets”.
MAY 2013 | BRANDFINANCE® Football 50 | 7TheTop10:ProfilesWorthywinnersOver the next 6 pagesaremini-profiles of the world’s10 most valuable footballbrands, starting with thisyear’s winner FC BayernMünchen.01FC Bayern München Germany2013 USD 860 2012 USD 786 Change 9% Brand rating AAA 2012 rank: 202Manchester United FC England2013 USD 837 2012 USD 853 Change -2% Brand rating AAA+ 2012 rank: 103Real Madrid CF Spain2013 USD 621 2012 USD 600 Change 4% Brand rating AAA+ 2012 rank: 304FC Barcelona Spain2013 USD 572 2012 USD 580 Change -1% Brand rating AAA 2012 rank: 405Chelsea FC England2013 USD 418 2012 USD 398 Change 5% Brand rating AA 2012 rank: 506Arsenal FC England2013 USD 410 2012 USD 388 Change 6% Brand rating AA+ 2012 rank: 607Liverpool FC England2013 USD 361 2012 USD 367 Change -2% Brand rating AA 2012 rank: 708Manchester City FC England2013 USD 332 2012 USD 302 Change 10% Brand rating AA- 2012 rank: 809AC Milan Italy2013 USD 263 2012 USD 292 Change -10% Brand rating AAA- 2012 rank: 910Borussia Dortmund Germany2013 USD 260 2012 USD 227 Change 15% Brand rating AA 2012 rank: 11
8 | BRANDFINANCE® football 50 | MAY 2013TheTop10:Profiles011FCBayernMünchenThis year, Bayern Munich first mastered the Bundesliga. Then, on Saturday25th, the European title was secured. Now a global title can be added tothe list; Bayern has toppled Manchester United to become the World’s mostvaluable football club brand. Its $860 value is driven by on-field successbacked by off-field stability and scale.With a commercial revenues stream alone in excess of €200m, BayernMunich really is the game’s commercial powerhouse. Long standing (andownership) ties with Audi, Adidas, Deutsche Telecom and Adidas providecontracted and visible revenue streams for the club to invest into one of theWorld’s most talented and exciting squads.Alongside its commercial clout, the 2012/13 season has been one ofdomestic domination. The domestic title was secured as early as April andsaw Bayern end with a massive 25 point margin over 2nd place Dortmund.The free-flowing football was further visible on the European stage wherethe world watched them humiliate arguably the greatest ever football team,Barcelona. Trophies bring inflows to all three revenues streams (matchday, media and commercial) and with many of Bayern’s commercial dealsbeing performance-linked, we anticipate 2012/13 is likely to have produceda record year of turnover for the club and help add another year of profit toits impressive financial track record.With Bayern being the leading club in Europe’s largest economy, theyhave been able to leverage commercial deals to maximise this position.Though German media deals are dwarfed those of some other Europeanclubs, the fact that most German football is televised on free to air channelsdomestically, helps feed greater commercial appetite for sponsorship deals.It is also worth highlighting the financial stability of the club that sets itout from its European rivals. The club comfortably meets UEFA’s financialfair play criteria and will see little discomfort as this is fully rolled out. Itstrack record of running a profitable operation and the doubling of turnoversince 2007 is testament to the quality of the commercial team behind thescenes. Whilst much of its financial prudence is driven by strict Bundesligaguidance, the club is working proof that silverware and profit are notmutually exclusive in the beautiful game.More impressive still is that Bayern top the brand value table whilstcharging fans a fraction of Premier League clubs for equivalent matches.Bayern’s cheapest season ticket costs €123 whilst at Arsenal, the cheapest isan astronomical £985. The club’s spectacular Allianz Arena is consistentlyfull and it now has over 170,000 members showing the its enduringpopularity. As President Uli Hoeness famously said this year, “We do notthink the fans are like cows, which you milk. That’s the biggest differencebetween us and England”.The next challenge for Bayern to ensure it stays on top of the brand valueleague is to devise a strategy to drive further revenue growth. To do this,it will need to see if it can transcend its domestic dominance and attract aglobal audience. With highly rated Josep “Pep” Guardiola joining the clubfor the 2013/14 season, it is one of the clearest indicators yet that there hasbeen a step change in outside perceptions of the Bundesliga. It can and inBrand Finance’s view will, truly challenge the Spanish and English leaguesfor European dominance.BRANDVALUE$860m +9%BRANDRATINGAAA SHIRTSPONSOR ANNUAL VALUE$40mKITMANUFACTURER ANNUAL VALUE$34m
MAY 2013 | BRANDFINANCE® Football 50 | 9TheTop10:Profiles022ManchesterUnitedFCWith Sir Alex Ferguson announcing his retirement, Manchester Unitedsuffers another blow as the club loses its status as the World’s most valuablefootball brand. The Red Devils have delivered another successful year bothon and off the field, however the departure of the clubs ultimate “brandmanager”,Sir Alex Ferguson, leaves a question mark as the club entersa new era. United’s commercial success has been underpinned by itsconsistent on-pitch performance, fans and investors alike will be waiting tosee if David Moyes can deliver.The club continues to operate a regional and sectoral approach torecruiting commercial partners and throughout 2012-13 has continuedto add new partners. To fuel this approach it has opened a commercialoffice in Hong Kong to be closer to the expanding number of existing andpotential commercial partners in the region. It has also mooted that theclub is soon to open an office in its owner homeland, the USA, to tap intothe World’s largest economy.The magnitude of the recent Chevrolet deal is testament to the globalbrand that the club has built particularly under the Glaziers’ guidance.At over £50m per year, this is more than a five-fold increase on the £9mannual shirt sponsorship deal in place with Vodafone when the Glaziersarrived in 2005. Alongside the traditional front of shirt sponsor, the clubhas also installed a significant training ground naming rights deal with Aonworth £160m over eight years. The fact the club can demand a greater valueon naming its training ground than many can generate from naming rightson its main stadium demonstrates the potency of United’s brand. It is alsoencouraging that the club current shirt sponsor, Aon, is keen to remaininvolved with the club in another dimension and would suggest a positiveReturn on investment (ROI) is being generated.Whilst the club has published questionable statistics about its globalfanbase (claiming 659m people worldwide support the club), there is nodenying that Manchester United has global awareness and stature thatmany of its peers are vying to replicate. At last count it has no less than 40commercial partners set around a structured sponsorship matrix basedon specific sectors and territories. Whilst many top clubs are condensingtheir partnerships along the “less is more” path,United is following a “moreis more” strategy and believe the brand has the strength to be furtherstretched.Manchester United has always been at the forefront of setting brandtrends in the game, from innovative new commercial deals, to its successfulTV channel and far flung tours across the globe. The club is once againsetting the mark through an impressive social media strategy to connectwith its ever expanding global fanbase. The club’s partnership with multipletelecom providers affords it access to followers in over 40 countries and itswebsite, now available in seven languages, receives over 60 million pageviews per month. Whilst this connectivity is still in its infancy, the challengefor the brand will be how to monetise this channel.BRANDVALUE$837m -2%BRANDRATINGAAA+ SHIRTSPONSOR ANNUAL VALUE$31mKITMANUFACTURER ANNUAL VALUE$38m
10 | BRANDFINANCE® football 50 | MAY 2013TheTop10:Profiles03,043RealMadridCFThe departure of the “Special One” Jose Mourinho caps the end of adisappointing season for Real Madrid, leaving them stuck in third placein the BrandFinance® Football 50. Whilst its 2011/12 season generatedthe largest revenues in the game (€513m), the clubs brand value has beendampened by the economic woes of the Spanish economy. The distributionof media rights in La Liga continues to be negotiated individually, althoughthis is set to move to a collective basis shortly, which will squeeze Madrid’smedia income. The club has expressed an interest in increasing the match-day and commercial buckets to help continue its growth.Redevelopment plans are currently being tendered to transform theBernabéu, with club President Florentino Pérez stating, “I want a stadiumthat doesn’t look like a stadium and is profitable”. The drive will be to notonly provide an improved match-day experience but create sources ofrevenue that can be generated every day of the week.Away from the field, the club operates an expanding (and very successful)merchandising operation – the club sold over 1.5 million replica shirts lastseason alone. For the 4th consecutive summer the team will complete atour of the US, the club is nurturing a strong following in both North andSouth America. Mourinho tested the Real Madrid “blue book” duringhis reign, the club can ill afford another unsuccessful season and theappointment of a new manger could be crucial to maintaining the clubstop three standing, let alone to reclaim the title of World’s most valuablefootball brand.BRANDVALUE$621m +4%BRANDRATINGAAA+ SHIRTSPONSOR ANNUAL VALUE$30mKITMANUFACTURER ANNUAL VALUE$39m4FCBarcelonaFC Barcelona’s brand value remained stagnant this year as concern growsthat Pep Guardiola’s trophy filled golden era is drawing to a close. TheCatalans will be hoping the signing of the hugely marketable Braziliansuperstar Neymar will continue the traditions of Maradona, Cruyff andMessi that made the club a multinational institution. It is a tantalisingprospect for anyone to see two of the world’s most exciting talents, Messiand Neymar, playing together in the same team.The Nou Camp, Europe’s largest football stadium, has a capacity of98,787, with average attendance figures ranging between 79,000 and84,000. The star studded Barça squad playing attractive football hasallowed these attendance figures to steadily rise and there is no reason thiswill not continue. Such profitable infrastructure has allowed FC Barcelonato grow revenues by 4.5% this year to almost €494m, cementing its positionof 4th in the BrandFinance® Football 50.Although Barça won La Liga this season, that victory was overshadowedby a failure to reach the Champions League or Copa Del Rey final. The clubmissed out on the rewards of additional trophies this season and so theplayers and coaching staff forfeited bonuses of €12m. Under the financialstewardship of Javier Faus and Sandro Rosell, FC Barcelona have been ableto embark on a successful strategy of cutting costs and securing long termpartners such as Audi, Coca Cola and Movistar in addition to kit and shirtsponsorship from Nike and the Qatar Foundation. Impressively they havemanaged this without compromising their football on the pitch. All theseelements combined resulted in FC Barcelona producing an “historic” €48mprofit.BRANDVALUE$572m -1%BRANDRATINGAAA SHIRTSPONSOR ANUAL VALUE$38mKITMANUFACTURER ANNUAL VALUE$46m
MAY 2013 | BRANDFINANCE® Football 50 | 11TheTop10: Profiles05,065ChelseaFCChelsea has enjoyed a 5% jump in brand value following ChampionsLeague and, more recently, Europa League success, which boosted allthree revenue streams. High staff turnover has continued however, withthe manager count during the Abramovich reign now in double digits. Thiscontinued managerial merry-go-round along with its limited stadia capacityis weighing on the Chelsea’s ability to challenge the Brand Finance Football50’s ‘Big Four’.Whilst the club has lacked consistency on the pitch, it has enjoyed greatstability with its long standing commercial partners Adidas and Samsung.Alongside these global brands it has added Delta, Gazprom Audi andmore recently Singha Beer, demonstrating the increasingly global appealof the Chelsea brand. The club also has in place an innovative brandingpartnership with F1 team Sauber, focusing on ways to enhance sportingand business performance. This includes the exchange of knowledge insport science, launching joint commercial initiatives, merchandising,events, marketing and linked sponsorship opportunities. We expect to seemore collaborations of this manner throughout football as different sportsrecognise the synergies and commonalities that exist.BRANDVALUE$418m +5%BRANDRATINGAA SHIRTSPONSOR ANNUAL VALUE$21mKITMANUFACTURER ANNUAL VALUE$15m6ArsenalFCWhilst Arsenal endured another trophy-less year, off the pitch its fortuneshave been more impressive. The club has been criticised in recent yearsfor its poor commercial revenues relative to its peers. However, earlier thismonth it announced a record breaking kit deal with Puma. Reported to beworth £30m a year, the deal was enough to see the Gunners end a 20 yearalliance with Nike. In addition, significantly increased extension of shirtsponsorship and naming rights has been agreed with Emirates Airlinesthrough to 2019. The club now needs to feed its increased revenues into onpitch talent to end its eight year trophy drought.The Emirates Stadium continues to sell out and be one of the highestyielding stadia in the world; once again the stadium will host a numberof events during the summer football break that will bring in ancillaryrevenues and act as a touch-point for the brand to new consumers. Arsenalis unique in that match-day revenues continue to be its largest incomestream.Speculation is still rife about a potential takeover approach for theclub, either from one of its current wealthy shareholders or an externalconsortium. With its listed shares at an all-time high, valuing the club at justover £1bn, it would take a brave investor to see where they could eke out areturn.BRANDVALUE$410m +6%BRANDRATINGAA+ SHIRTSPONSOR ANNUAL VALUE$8mKITMANUFACTURER ANNUAL VALUE$20m
12 | BRANDFINANCE® football 50 | MAY 2013TheTop10: Profiles07,087LiverpoolFCDespite a very slight brand value fall after another disappointing year onthe field, Liverpool is backed by an increasingly solid commercial team andexperienced US owners. With a brand new shirt supplier, the 2012-13 seasonsaw the first evidence of the club’s impressive deal with new market entrantWarrior. This deal saw Liverpool move away from a 22 year relationshipwith Adidas and take a gamble on Warrior’s first foray into the ultracompetitive football apparel market and away from its lacrosse and hockeyroots. However, whilst the deal alone represents a 100% increase in value,it also opens the club up to greater branded merchandise opportunitiespreviously contracted out in the Adidas deal.Liverpool’s tremendous heritage has not gone unnoticed by kit supplierWarrior. Drawing inspiration from Liverpool’s 1964/65 kit they havereintroduced the iconic yellow Liver Bird emblem last seen on the shirt in1985 during the club’s golden era. Football clubs tend to move slowly whenit comes to visual identity changes and it speaks positively of Liverpool andWarrior’s relationship that they recognise the opportunity and have theconviction to make such a change.Despite the shrewd business and marketing minds now steering the club,Liverpool must return to the European stage to drive all three revenuesstreams, and equally push on with the development of Anfield to tap intothe great match-day yields available from such a rich heritage and loyalfans.8ManchesterCityFCWinning no major trophies, losing in the final of the FA cup to underdogsWigan and a disappointing Champions League outing led to the sacking ofRoberto Mancini. The fact it happened on the anniversary of winning thePremier League title shows the strong desire of the Abu Dhabi based owners.With one of the largest wage bills in Europe the club needs on pitch successto drive all three revenue streams to make a sustainable business operation –this will soon become compulsory as Financial Fair Play kicks in.Whilst match-day and media revenues are largely dictated by on-fieldactivities, City has been frantically trying to catch up with its neighboursto boost commercial income, recently opening a commercial office in thecentre of London, akin to their red rivals. Long term, lucrative deals arecurrently in place with Etihad for naming rights and shirt sponsorship, aswell as a new kit supplier partnership with Nike worth £12m per year beingrolled out for the 2013/14 season. Outside these traditional sponsorshipavenues, the club has taken the pioneering move in acquiring the rights toMajor League Soccer’s 20th expansion franchise from 2015 in a partnershipwith baseball team the New York Yankees. Whilst the deal has only justbeen announced and full details of ‘NYCFC’ are yet to emerge, it shows thecommitment of the club to take the brand global and compete with theirneighbours both on and off the pitch.BRANDVALUE$361m -2%BRANDRATINGAA SHIRTSPONSOR ANNUAL VALUE$31mKITMANUFACTURER ANNUAL VALUE$38mBRANDVALUE$332m +10%BRANDRATINGAA- SHIRTSPONSOR ANNUAL VALUE$31mKITMANUFACTURER ANNUAL VALUE$40m
MAY 2013 | BRANDFINANCE® Football 50 | 13TheTop10: Profiles09,109ACMilanAC Milan has suffered a bigger drop in brand value than any other in thetop 10. The club had a relatively disappointing domestic and Europeancampaign this season. Similar to many of its Italian peers, the club isconstrained by its aging San Siro home with its match-day revenuesmaking up less than 15% of its €257m turnover. In 2010, the club bravelyintroduced a disciplined, tiered sponsorship structure, which saw it reduceits commercial partners in a drive to provide greater visibility, exclusivityand value for a more select number of sponsors. The strategy appears to beworking as the club has seen commercial revenues grow significantly sinceimplementing the “less is more approach”.However, for the club to climb the ranks, it needs to invest in its fixedassets to improve its match-day offering. Unfortunately this may provechallenging as the club does not own its own stadium, instead theStadio Giuseppe Meazza is owned by the City of Milan. Co-tenants FCInternazionale Milano seem to be the most proactive in this area, taking aleaf out of Juventus’ book. They have reportedly already found a locationfor a new 60,000-seat Stadium.10BorussiaDortmundDomestic success in 2011/12 and this season’s Champions League final spothelped Dortmund enter the top 10 of the BrandFinance® Football 50 forthe first time. The club’s long-term marketing agreement with Sportfiveprovides the platform for strong commercial performance, which includesrecently extended deals with shirt sponsor Evonik Industries and stadiumnaming rights holder Signal Iduna. The club brand is still very muchcontained to domestic appeal, however it consistently fills it 79,000 seatstadium and the club broke a European record for season tickets for thethird year in a row, with more than 54,000 sold for the 2012/3 season.Whilst very much a domestically focused brand, the club has completeda “black and yellow” miracle in its turnaround of fortunes that has seenthe club go from the verge of bankruptcy in 2005 to the Champions Leaguefinal. The Dortmund identity is based on ‘intensity’ and is reflected inhow they play, the challenge is now for the club to try and spread thisintensively to a global audience. Highly rated manager Jürgen Klopp willbe key to maintaining this brand of football, but with more and more clubsseemingly afflicted by the increasingly unpredictable reshuffling of footballmanagement, the Dortmund club may struggle to hold onto what could bea very successful brand manager.BRANDVALUE$263m -10%BRANDRATINGAAA- SHIRTSPONSOR ANNUAL VALUE$16mKITMANUFACTURER ANNUAL VALUE$13mBRANDVALUE$260m +15%BRANDRATINGAA SHIRTSPONSOR ANNUAL VALUE$20mKITMANUFACTURER ANNUAL VALUE$8m
14 | BRANDFINANCE® football 50 | MAY 2013Top 10 historical overview 2013The diagram below charts the rise, fall and rise of the world’s 10 most valuable footballbrands over the past seven years. Bayern Munich’s rapid rise and the emergence ofDortmund shows the growing significance of the Bundesliga.02004006008001000 FC Bayern MünchenManchester United FCReal Madrid CFFC BarcelonaChelsea FCArsenal FCLiverpool FCManchester City FCAC MilanBorussia DortmundBrandvalue($m)2007 2008 2009 2010 2011 2012 2013AC Milan finish5th in Serie A,ManchesterCity purchasedby Abu DhabiUnited Group ManchesterUnited win theChampionsLeague ChristianoRonaldofinishes firstseason at RealMadridfollowing£80m transferfrom UnitedThe Eurocrisis begins totake its toll onSpanish andItalian clubsManchesterCity win thePremier LeagueSir AlexFergusonretires, BayernMunich win theChampionsLeagueAC Milan winChampionsLeague
MAY 2013 | BRANDFINANCE® Football 50 | 15WinnersandlosersBayern Munich has clinched the title of 2013’s most valuable football brand with this year’sbiggest gain in brand value ($68 million). Inter Milan, Bordeaux and Olympique Marseilleshave fared the worst, all recording brand value falls of over 30%.-50 -25 0 25 50 75 100Olympique de MarseilleFC Girondins de BordeauxFC Internazionale MilanoPSV EindhovenOlympique LyonnaisCeltic FCAFC AjaxAC MilanAston Villa FCHamburger SVVfB StuttgartSSC NapoliCR FlamengoValencia CFVfL WolfsburgClub Atlético de MadridParis Saint-Germain FCSC Corinthians PaulistaBayer 04 LeverkusenSantos Futebol ClubeChange in brand value ()70%41%34%34%34%25%22%20%20%18%-6%-8%-10%-12%-13%-16%-18%-30%-30%-34%BRAND VALUE CHANGE (USDm)BRAND VALUE CHANGE (%)-50 -25 0 25 50 75 100FC Internazionale MilanoOlympique de MarseilleFC Girondins de BordeauxAC MilanAFC AjaxOlympique LyonnaisPSV EindhovenCeltic FCAston Villa FCHamburger SVJuventus FCSantos Futebol ClubeBayer 04 LeverkusenSC Corinthians PaulistaChelsea FCArsenal FCManchester City FCBorussia DortmundReal Madrid CFFC Bayern MünchenChange in brand value ()68292727242319191817-2-3-4-7-9-10-12-13-34-37
16 | BRANDFINANCE® football 50 | MAY 2013WhattheclubssayArsenalDo you have documented set of brand guidelines/values?Arsenal Football Club is synonymous with history, traditionand success. We believe that the Club exists to make ourfans proud wherever they are in the world and however theychoose to follow us.Everyone that works for the Club understands that we willfulfil our goal of making fans proud by being together, alwaysmoving forward and doing things ‘The Arsenal Way’. This finalelement is a key ingredient of who we are. It’s about thinkingabout others, getting the detail right and going above andbeyond expectations.What do you view as key territories for further brand growth?As a genuine global Club with millions of fans all over theworld, we have a major focus in a number of different overseasterritories, with our most notable growth currently acrossAfrica and Asia.How do you balance the dual role of fans as both customersfrom whom you must make money and supporters/brandambassadors?We know that as a Club we have an avid following all over theworld and while the vast majority will never make it to anactual Premier League game, our challenge is to engage withtheir passion for Arsenal and make all supporters feel a part ofthe Club wherever they are.The primary objective is to have as many supporters aspossible regularly engaging with the Club across a number ofdifferent platforms, whether that’s directly through fan eventsand activities tied in to our Tour, or through digital media.Once you have established a conversation with those fans andunderstand their interests in more detail (something we aredeveloping extensively through investment in our CustomerRelationship Management (CRM) system), it is easier for theClub to interact on an individual basis and develop potentialcommercial revenue streams.How much impact can off-pitch activities (charitable efforts,advertising & marketing, tours etc) have when compared tothe effect of on-pitch success?In our opinion, the two need to work in tandem to drive realfan engagement and brand value. We know that supporterpride is driven primarily by success on the pitch and thismeans winning trophies. At Arsenal, we are also proud thatare our style of play, our focus on developing youth talent,our magnificent stadium, our broader contribution in thecommunity and our self-financing approach helps us to standout amongst the crowd and provide additional sources of prideand recognition.Players are obviously key to your image, how do you managethe risks that they may personally damage the club’s brand?The players are undoubtedly the Club’s primary asset and wework hard to ensure that they, like the rest of the Club’s staff,adhere to our vision and values both on and off the pitch.The growth in digital and social media means that manyplayers now interact directly with supporters, and whilethis presents its challenges, we are able, through consistentengagement and comprehensive media training, to providethe players with clear parameters whilst using their individualappeal and profile to enhance and support the Club’s owninitiatives.A Club Spokesperson
MAY 2013 | BRANDFINANCE® Football 50 | 17WhattheclubssayJuventusFCHow many people do you have working in your marketing/brand team? Do you have more than one office?We have no specific marketing team but rather a commercialteam covering a range of areas from merchandise to marketingthe stadium and the brand made up of 9 people. At Juventuswe do all our marketing activities in house, unlike most otherItalian clubs, we feel this gives us greater control and a betterconnection with our fans.Do you benchmark/record your brand value in any way?No, we feel it would be too subjective to do it ourselves we relyon information from Brand Finance and the market.Do you have a documented set of brand guidelines/values?In 2006/07 we changed the logo, we are continually trying toadapt the brand to keep it modern. In terms of intellectualproperty it is Nike who is reliant on us to protect the IPthrough our ‘Guardian of the brand”.What do you view as key territories for further brand growth?The focus has always been Italy however we can now lookto engage new markets in new ways. In the future we will belooking to local partners in Japan, China, India, Australia,Indonesia and USA. This summer we will be competing in theGuinness International Champions Cup in the USA along withMilan and Inter. This allows us to promote the Serie A leaguetogether as opposed to one club going to China one club goingto Australia and the message being lost. We work with SerieA to improve the image of the league overall. In my opinionthe Italian league remains an entertaining league due to thenumber of top sides that compete. The German Bundesligaand the Spanish La Liga are dominated by two teams whereasin Serie A you have Juventus, Inter, Milan, Roma, Lazio andNapoli who all compete for top honours.Do you have a unified return on investment (ROI) metric thatyou use with all commercial partners/sponsors?10 years ago sponsors and partners were primarily concernedwith buying visibility. Today sponsors are more concernedwith gaining access to content and fans.How do you balance the dual role of fans as both customersfrom whom you must make money and supporters/brandambassadors?The 1st priority is that the team wins. We work to develop aclose relationship with the fans and hope that continued onthe pitch success will deliver financial rewards in the future.Players are obviously key to your image, how do you managethe risks that they may personally damage the clubs brand?There was a Juventus before them and there will be a Juventusafter them, the club is more important than any one player.What impact has the new stadium had on your brand?The process of moving to a new stadium took 16 years. Weare already beginning to see increased participation andengagement of the fans.Francesco Calvo, Commercial Director
18 | BRANDFINANCE® football 50 | MAY 2013WhattheclubssayTottenhamHotspurFCHow many people do you have working in your marketing/brand team? Do you have more than one officeThere are eight members of the marketing team including twodigital specialists. The team are all based at the stadium.Do you benchmark / record your brand value in any way?Yes. Our main bench marks are based around tangibleindicators of brand value i.e. growth in commercial revenues,merchandising and licensing, fan base development – globalTV audiences for our matches, estimated size of our fanbase in key territories, volumes of engaged fans across allour channels globally and level of reach and increase intransacting supporters.Do you have documented set of brand guidelines/values?Yes. The Club has a comprehensive set of guidelines thatset out our brand proposition, values and tone of voice andoutlines a clear narrative of what our brand stands for. Ourbrand’s visual identity has comprehensive guidelines aroundthe use of our badge as well as how we achieve a cohesivebrand look and feel across every Club touch point. This iscombined with a clear brand protection strategy that ensuresour marks and IP are protected and where any potentialinfringements are carefully monitored.What do you view as key territories for further brand growth?Our primary focus outside the domestic market is the USA andAsia. We have seen significant growth in the USA following our2012 Tour. Our supporters Club network has grown by around40% in the last season.Do you have a unified return on investment (ROI) metric thatyou use with all commercial partners/sponsors?Yes in that we commission independent analysis from trustedindustry sources in order to put a valuation on both thetangible and intangible elements of a partners package ofrights. We use current market media and branding valuationdata and measures to put values on each element of thepartnership e.g. media, hospitality and ticketing, event andfacility usage, corporate real estate, merchandise etc. Inaddition we use accepted industry methodologies to quantifythe brand value to a partner through brand awareness andbenefit of association impact, brand stand out and rarity value,promotional rights and money can’t opportunities.How do you balance the dual role of fans as both customersfrom whom you must make money and supporters/brandambassadors?Our aim is to bring all our fans closer to the Club - providea sense of belonging and make them feel part of the Club.First and foremost it is about creating ways for fans to engageand interact with the Club whatever their desired level ofinvolvement and ultimately aim to nurture a one-to-onerelationship with each and every Spurs fan. The growth insocial media and digital channels allow us to extend ourreach and open up new opportunities to attract new fansand inspire advocacy from existing fans. If we achieve this,the ability to monetise support is a seamless outcome ofengagement whether it’s direct transactions or value for ourpartners or broadcasters.How much impact can off-pitch activities have whencompared to the effect of on-pitch success?What we do off the pitch is also important in determining ourbrand values and gaining new supporters and both on and offpitch activities are mutually supportive. By way of example, weare at the forefront of charitable efforts and CSR through ourTottenham Hotspur Foundation, which is dedicated to utilisingthe power of football to engage young people and create lifechanging opportunities. The Foundation runs a vast numberof programmes which are fully supported by the players andcoaching staff, who attend events on a weekly basis. This hasearned the Club a reputation for being responsible, caringand inspiring. Our global coaching programmes also take the‘Tottenham style’ of play to grass roots football at schools andcolleges. Everything we do is guided by our core principles.Players are obviously key to your image, how to you managethe risks that they may personally damage the club’s brand?The players have a duty to represent the Club in the best wayat all times and all are made aware of this responsibility. Weconstantly liaise with the players regarding new trends and thebest ways to communicate.Emma Taylor, Head of Marketing
MAY 2013 | BRANDFINANCE® Football 50 | 19Manchester United and The GlazersGlaze of Glory?Love them or loathe them its hard to dispute the impressive numbers generated underthe Glazers guidance at Old Trafford. Since taking over the club. in 2005 the Club hasseen revenues double bouyed primalry by the every increasing number and value ofcommercial deals. Following a succesful IPO in New York in 2012 the clubs shares arecurrently trading at an all-time high valuing the business at almost £2bn2005 2013Market Cap $1,398M $2,888MBrand Value $293M $837MBrand Rating AA AAA+Annual Revenue $294M $486MRevenue splitMatchday Media CommercialShirt sponsor(deal signed 2013, shirt sponsor from 2014)Annual shirt sponsor value S16m $68mKit supplierCommercial Partners 10 40+Domestic Titles 15 20European Cup / CL 2 3Ground capacity 67,540 75,811Sources: Company accounts, press reports, Brand Finance league table, bloombergSince acquiring Manchester United inMay 2005 the Glazers have set aboutextracting the “unrealised” commercialpotential they saw within the club,relative to their US sporting experience.In an 8 year period, the club has seenoverall revenues almost double with thecommercial stream providing the mainimpetus. Driving this commercial gain isthe fact that the club truly recognise thebrand asset that they own and have setabout a clear strategy to invest and getexponential returns on this investment.The club had devised a clear territorialand sector approach to commercialpartners, which sees it with commercialrelationships with over 40 partnersserving many territories. Whilst thisstrategy could dilute weaker brands,Manchester United is confident they havethe global awareness and brand strengthto pursue such a strategy. Credit needsto go the commercial team behind thebrand, who are consistently inventingnew partnership opportunities, the clubrecently took the bold move to back outof a “revolutionary” training kit deal withDHL as they felt they could command agreater return on the opportunity.The brand and its strategy featuredheavily in last year’s IPO prospectus andthe club is very pro-active in seekingout new partners. It has recently setupa commercial office in Hong Kong toservice its Asian partners and has beenopen about its desires to setup a similaroffice in America.The Glazers remain close lippedabout their exit strategy, but with sharescurrently trading at an all time highvaluing the club at close to $3bn, thefigures demonstrate what a great job theGlazers have overseen.$122(m)$86(m)$86(m)$150(m)$159(m)$178(m)
20 | BRANDFINANCE® football 50 | MAY 2013Football leaguesBundesliga vsPremier LeagueFootball is a business and with UEFA’sFinancial Fair Play looking to curbthe advantages given to club’s treatedas billionaire playthings the profitgenerating potential of clubs is only setto become more important. Commercialsuccess allows clubs to sustainablycreate on-pitch success through theacquisition of better players, hiring ofbetter staff and capital expenditure onbetter training facilities. In turn, on-pitch success helps drive commercialsuccess by attracting better sponsors,selling more merchande and enablinghigher ticket prices. A club that isboth successful as a business and asa sporting endeavour is a force to bereckoned with and the Bundesliga mayhave found the perfect balance.14 of the Bundlesliga’s clubs madea profit in 2012, with an overall profitfor the Bundesliga of €55m, the EPLmade a staggering €245m loss over thesame period despite the EPL generating€2.8bn of revenue compared to theGerman club’s €2.1bn. The Bundesligahas managed this profit through strictcost control; only 38% of total incomegoes to players and coaches whereas inthe EPL the figure is far greater at 64%.Ticket prices in the Bundesliga arelow with the cheapest average ticketat about €12, EPL average ticket pricesare three times higher. The low ticketprices are a matter of policy for Germanfootball and kept purposely low, unlikein the EPL where free market supplyand demand sets prices high. These lowticket prices coupled with large modernstadiums has allowed the German topdivision to attract the biggest averageattendances in the world, averaging45,000 spectators per match comparedto the second place EPL with 34,000.But despite the record attendancesthe low prices are limiting match-dayrevenues, this has forced the GermanBundesliga English Premier LeagueFormed 1963 1992Clubs 18 20Average ticket price 2011/12 (in USD) 29.81 43.15Total Revenue FY2011 3,349 6,022Estimated club average revenue FY2011 ($m) 186 301Rank in Europe 4 1Average spend on wages as % of revenue 52% 68%Club Revenue Compound Annual Growth Rate 2006-10 8.3% 13.1%GDP Compound Annual Growth Rate over same period 0.6% -0.3%Total Transfer Value of League ($m) 2,468 4,388Average squad value ($m) 137 219Foreign player % 49% 65%Average age 24.80 27.00Champions League Titles 12 7UEFA Country coefficients 2012/13 79.328 82.677Rank in Europe 3 2Average Attendance (2011/12) 45,116 34,600Total Attendance (2011/12) 13,805,462 13,148,133Largest Attendance (2011/12) 80,521 75,387Rank in Europe 1 2clubs to concentrate on leveraging theirbrand elsewhere; the commercial space.German clubs historically have formedclose relationships with local businessesand as the German economy has grownthese businesses have become hugeglobal corporations better able tosupport their sponsored team. BayernMünchen has the highest reportedcommercial revenues of any club in theworld.Broadcasting is the only area theBundesliga lacks in comparison to theirEnglish counterparts and unlike cheaptickets this is not by choice. The EPLderives a third of its views from Asia anda quarter from Africa and the MiddleEast allowing the league to distributeover €1.3bn in broadcasting revenue toits clubs. By comparison the Bundesligaonly generated €519m.If trends continue German clubfootball will become better recognisedon the global stage, the all-German UCLfinal as well as big-name foreign coachPep Guardiola entering the league areearly indicators of the step change inglobal perceptions to come. With thisrecognition comes an opportunity topatch up poor broadcasting deals withforeign markets. Not until this is fixedand incorporated into the financiallyresponsible model of German footballwill the Bundesliga truly be able tochallenge the EPL on a level playingfield.
Away from the club brands, an equallyexciting branding battle is taking placebetween the kit suppliers. This year’sBrandFinance® Football 50 sees anunprecedented 10 different apparelproviders dressing the World’s topteams. Adidas leads the pack, supplyingkit to 18 of the top 50 clubs, includingthis year’s winners, Bayern Munich. TheGermans are hotly pursued by Nike,which hold contracts with 14 of the top50 teams. The long-term dominanceof Nike and Adidas however is beingthreatened by a raft of smaller brandsvying to gain market share.Warrior sports entered the market in2012 with a deal to supply Liverpool’s kitsover a 6 year period. Warrior, owned byNew Balance, is better known in the USmarket for providing lacrosse and hockeyapparel. Liverpool brokered the deal overa 12 month period, speaking with all themajor kits suppliers before settling on thevalue and exclusivity that the Warrior dealwould provide. Richard Wright, Warrior’shead of football, said “we are not the sortof brand to keep our head down, we arehere to shake up the world of football”.They were certainly not afraid to spend toachieve it; the deal was worth a reported£300m, a record braking sum.Under Armour is another US brand justbeginning to capture UK market share,using its deal with Tottenham Hotspur asa market entry tool to tap into the footballmarket and continue its rapid revenuerise. The company is particularly wellknown for its pioneering research andtechnological innovations and is at theforefront of the current trend for footballshirts to be treated on a par with boots asserious pieces of technical apparel. Theaverage retail price of a team shirt acrossthe top 50 is now over US$75.Puma, which has tended to focus onlower tier teams, has re-entered the top10, announcing that it will supply kitsto Arsenal. The five-year, £170milliondeal ends the Gunners’ 20 year alliancewith Nike. Puma owner PPR is currentlyin the process of completing a drasticreorganisation of the company to reverseits financial woes and has recently exitedRugby kit sponsorship citing the greateropportunities offered by football.We do not expect too many furtherentrants into this busy marketplace,however we do expect to see clubsleverage the competitive landscape in newkit supplier negotiations and anticipatethat longer and even more valuabledeals will be struck by the games’ biggestbrands.MAY 2013 | BRANDFINANCE® Football 50 | 21Football shirt brandsCutting a Fine Figure -£300m to be preciseKit SupplierNumberofPartnershipswithclubsintheBrandFinance®Football5018154 42 2 21 1 1‘we are not the sort of brand tokeep our head down, we are hereto shake up the world of football’RichardWright,Warrior
22 | BRANDFINANCE® football 50 | MAY 2013SponsorshipThe Growing Value ofFootball SponsorshipSponsorship is a huge investmentopportunity for corporate brands seekingto expand their global reach and raiseawareness amongst new customersin new markets. In world football thevalue of these sponsorships has growndramatically in recent years with someof the top clubs now generating morethan $70m per year from shirt & kitsponsorship alone. This should not besurprising with shirts worn by individualplayers and loyal fans televised to a globalaudience of 4.7 billion, shirts are primereal estate for sponsors.The 2014/15 English Premier League(EPL) season will see ManchesterUnited begin a $79 million per yearshirt sponsorship deal with Chevrolet,making it the largest deal of its kind.Bayern Munich, UEFA Champions Leaguefinalists two years running, generates$37million per year from a deal withDeutsche Telekom. In recent years evenCatalonian giants Barcelona have chosento emblazon their traditionally plain shirtwith a lucrative sponsorship deal. TheQatar Foundation is reportedly paying€30 million a year to be the club’s firstever kit sponsor in its 113 year history.The top 10 most valuable brands inthis year’s report generate an impressive$266m from their shirt sponsorshipalone, not taking into account the raft ofsecondary deals and kit partnerships.Corporate brands seeking a platformfor building, strengthening andmaintaining their brand image seefootball brands as the ideal vehicle.Brands seeking to develop in newmarkets will look to clubs with thestrength to raise awareness. ManchesterUnited are gold standard in this regard,their new deal with Chevrolet signalsthe car manufactures desire to drive itsappeal up in the European market byusing the well developed United brandas a vehicle. Conversely, United itself isattempting to grow their brand in the USwith the Glazer’s pioneering large tourevents across the Atlantic.Clearly sponsors must also fit with theirtarget audience and brands must havesynergy with viewers and supportersalike. A look at the top sponsorship dealsin world football shows huge investmentfrom brands which believe they sharethe same ideals that make a football clubsuccessful: the pursuit of perfection, hardwork & passion.Aspirational brands such as cars andairlines as well as some of the world’smost valuable banking and telecomsbrands can be found on the shirts of themost successful clubs. Away from thetop global brands, betting has continuedto be a major sponsor of football. Thesynergy between these areas is clearwith TV, mobile, online and pitch sideadvertising invested in heavily by bettingbusinesses such as Bet 365, Bet Fred and32 Red amongst others. Shirt sponsorshipby betting brands in the Football 50 isnow worth US$47 million per annum.It is no coincidence that the majority ofadverts at half time are betting adverts.Sponsorship in football is not withoutits risks however with on-pitch successby no means a guarantee. Corporatesponsors can risk aligning their brandwith a sinking ship or paying tens ofmillions of dollars only to have theirsponsored club miss out on vital UEFAChampions League qualification andthe awareness that comes with globaltelevision broadcasting.Sponsors must not forget that throughtheir partnerships with the club asan entity they are also associatingthemselves with the individual stars.Footballers as individuals are notoriouslydifficult to control at the best of times, forexample Luis Suarez provides a difficultdilemma for Liverpool’s head sponsorStandard Chartered. The Uruguayan’ssilky skills are vital to the success of theMerseyside club on the pitch which canin turn become off pitch brand success,but his consistent negative antics areno doubt straining heavily on StandardChartered’s own brand ideals.Unexpected success is the flip-side ofthis with the potential to reap rewardsfor sponsors well beyond a relativelymodest sponsorship deal as in the caseof Swansea City. Sponsors 32 RED willno doubt have been extremely happywith the clubs promotion from theChampionship, the securing of a 9thplace finish in this year’s EPL as well asa first major trophy, lifting the CapitalOne Cup in February this year. Thereverse of this has been experiencedby Wolverhampton Wanderers sponsorSporting Bet following the club’srelegation in consecutive seasons. Thisuncertainty is however reflected in thesize of deal a club can command, thosethat can guarantee European footballconsistently will attract the best sponsorsfor the best money.Sponsorship revenues are a keycomponent of any clubs income andthese sponsorships are often driven byon-pitch success. The problem facedby many clubs is that in order becomesuccessful on the pitch they must firstattract the big sponsors to fund the bestplayers and staff. Many clubs have foundthis leap difficult, leaving an imbalancein football where the smaller clubscannot challenge the big boys on or offthe pitch. The increasing emphasis onrunning clubs as a viable business createsan opportunity for traditionally smallerclubs who, with shrewd commercialteams, will be able to break this cyclethrough innovation and value for money.
Below is a sample of the Key PerformanceIndicators we look at when accessing thestrength of a football brand.•HeritageHistory is something you cannot buy.The oldest clubs tend to have the mostsuccessful histories and a loyal fan basestretching back generations that will stickwith the club through thick and thin.•TrophiesUltimately history only rememberswinners, the runner-up is rarely given ashout. Fans and sponsors alike want to beassociated with these winners. Every fan,player, manager and owner talks in termsof trophies, they are the raison d’etre forany club.•StarplayersStar players win matches and sellmerchandise – they can be the keycomponent of strengthening the brand. Aclub can have the heritage, the staff andthe stadium, but if they don’t have thefundamental product – the players – towin and be successful on-pitch then it isall for naught.•StadiaA vital revenue generator and brand“touch point”, stadia are where the clubs“product” is showcased. Creating anenjoyable experience for fans is a must tomake them part with their hard earnedmoney as well as being large enough to fitall their fans in, easily accessible and wellmaintained.•ManagerThe single most important person at anyclub and the single hardest job. Withouttheir successful stewardship no club canrise to the top of our rankings.The Strength of the BrandThese are calculated using Brand Finance’s Brand Strength Index analysis, whichbenchmarks the strength, risk and future potential of a brand relative to its competitors ona scale ranging from AAA+ to D. It is conceptually similar to a credit rating. The data usedto calculate the ratings comes from various sources including Bloomberg, annual reports,websites such as transfermrkt.co.uk and Brand Finance original research.strapClub2013USDBrandRatingKey Performance IndicatorsFoundedLeagueTitlesCLTitlesUEFA 5ycoefficientSquadValueUSDStadium Size UtilsationManager(12/13 season)ManagerialAssessmentManagerCareerWin %1 860 AAA 1900 23 4 145 578 Allianz-Arena 69,901 99% JuppHeynckes VeryStrong 52%2 837 AAA+ 1878 20 3 131 562 OldTrafford 75,957 99% SirAlexFerguson ExtremelyStrong 63%3 621 AAA+ 1902 31 9 137 798 SantiagoBernabéu 80,354 91% JoséMourinho ExtremelyStrong 67%4 572 AAA 1899 22 4 158 806 CampNou 99,354 80% TitoVilanova Good 70%5 418 AA 1905 4 1 136 517 StamfordBridge 41,841 99% RafaelBenítez Strong 54%6 410 AA+ 1886 13 0 114 380 EmiratesStadium 60,355 99% ArsèneWenger ExtremelyStrong 56%7 361 AA 1858 18 5 79 327 AnfieldRoad 45,522 93% BrendanRodgers Satisfactory 42%8 332 AA- 1880 2 0 71 578 EtihadStadium 47,726 97% RobertoMancini ExtremelyStrong 55%9 263 AAA- 1899 18 7 94 281 GiuseppeMeazza 80,065 58% MassimilianoAllegri Good 49%10 260 AA 1909 8 1 62 342 SignalIdunaPark 81,264 97% JürgenKlopp Strong 48%11 259 AA- 1904 7 0 85 220 Veltins-Arena 61,482 100% JensKeller Satisfactory 56%12 219 AA 1882 2 0 70 357 WhiteHartLane 36,257 99% AndréVillas-Boas Good 59%13 180 AAA- 1897 29 2 71 433 JuventusStadium 41,000 93% AntonioConte Good 50%14 162 AA 1900 31 4 65 123 AmsterdamArenA 52,960 89% FrankdeBoer Strong 63%15 151 AA+ 1908 18 3 106 274 GiuseppeMeazza 80,065 75% AndreaStramaccioni Satisfactory 52%16 144 AA 1887 6 1 56 141 ImtechArena 57,274 95% ThorstenFink Good 55%17 116 A+ 1905 19 0 54 190 TürkTelekomArena 52,695 64% FatihTerim Strong 48%18 111 AA- 1899 9 1 79 147 StadeVélodrome 60,031 85% ElieBaup Satisfactory 41%19 103 AA 1910 5 1 0 94 EstádiodoPacaembu 40,199 63% Tite Good 48%20 101 AA- 1926 2 0 47 289 SanPaolo 60,240 76% WalterMazzarri Satisfactory 41%MAY 2013 | BRANDFINANCE® Football 50 | 23Brand strength
24 | BRANDFINANCE® football 50 | MAY 2013MethodologyWhat is a brand value?We define the brand as the trademarkand associated intellectual property.Football clubs are made up of a mixtureof fixed tangible assets (stadium, trainingground) and disclosed intangible assets(purchased players) with brand value,internally developed players & goodwillmaking up the difference to provide thecombined clubs value.How do we measure its value?We use the Royalty Relief method. Thisapproach assumes the company doesn’town their brand and must license it froma theoretical third party. The methoddetermines how much it would cost to dothis. It is called the Royalty Relief methodbecause when a business owns theirbrand they are ‘relieved’ from paying a‘royalty’ rate for its use.Royalty Relief ApproachThe Royalty Relief method is used forthree main reasons:1. It is the most recognised by technicalauthorities’ worldwide and favouredaccounting, tax and legal users becauseit calculates brand values by reference tocomparably third-party transactions.2. The method ties back to thecommercial reality of brands and theirability to command a premium in anarm’s length transaction.3. It can be performed on the basis ofpublicly available financial informationHow does the Royalty Reliefapproach work?Determine forecast revenues -referencing historic trends marketgrowth estimates, competitive forces,analyst projections and companyforecasts.1. Assess the Brand Strength – we useour BrandBeta® Index which in thecase of football clubs scores domesticand European honours, club heritage,revenue scale and split, attendancesand global reach amongst others tobenchmark the brands against eachother.2. Establish a Royalty Rate – we reviewcomparable licensing agreements aswell as analysing margins and valuedrivers to establish a royalty rate rangefor the sector and revenue stream. Theβrandβeta® is then applied to find thecorrect royalty rate for each brand withinthe range.3. Determine the Discount Rate – thisallows us to calculate the net presentvalue (NPV) of the brand’s futureearnings, therefore putting futurebenefits in today’s terms.4. Brand Valuation Calculation – steps 1-3are then brought together to determinethe NPV of post-tax royalties, which isthe brand value.Brand Ratings:These are calculated using BrandFinance’s Brand Strength Index analysis,which benchmarks the strength, risk andfuture potential of a brand relative toits competitors on a scale ranging fromAAA+ to D. It is conceptually similar to acredit rating. The data used to calculatethe ratings comes from various sourcesincluding Bloomberg, annual reports andBrand Finance research.Brand ratings definitionsAAA+ Extremely strongAA Very strongA StrongBBB-B AverageCCC-C WeakDDD-D FailingValuation dateAll brand values in the report are asat 29th May 2013 and displayed in US$millions. For any further information,please contact:Dave ChattawayHead of Sports Brand Valuation+44 207 389 9400D.Chattaway@brandfinance.comMatt HannaganSports Valuation Analyst+44 207 389 9400M.Hannagan@brandfinance.comOr visit:www.brandfinance.comHow were therankings compiled?The Brand Finance Index of ‘The Brand Finance® Football Brands 2013’ was compiled using,where available, publicly available information regarding market share, market growthand company financials. Our main sources of publicly available data were the DeloitteFootball Money League Report, Bloomberg, individual football club Annual Reports andpress releases. Brand value was derived using a ‘relief from royalty’ method that valuesbrands according to the cost of re-licensing them from a hypothetical third party.
MAY 2013 | BRANDFINANCE® Football 50 | 25Brand FinanceSince it was founded in 1996, BrandFinance has performed thousands ofbranded business, brand and intangibleasset valuations worth trillions of dollars.Brand Finance’s servicessupport a variety of businessneeds:• Technical valuations for accounting,tax and legal purposes• Valuations in support of commercialtransactions (acquisitions, divestitures,AboutBrand FinanceBrand Finance is an independent global business focused on advising strongly brandedorganisations on how to maximize value through the effective management of their brandsand intangible assets.licensing and joint ventures) involvingdifferent forms of intellectual property• Valuations as part of a wider mandateto deliver value-based marketing strategyand tracking, thereby bridging the gapbetween marketing and finance. Ourclients include international brandowners, tax authorities, IP lawyers andinvestment banks. Our work is frequentlypeer-reviewed by the big four auditpractices and our reports have also beenaccepted by various regulatory bodies,including the UK Takeover Panel. BrandFinance is headquartered in Londonand has a network of internationaloffices in Amsterdam, Bangalore,Barcelona, Cape Town, Colombo,Dubai, Geneva, Helsinki, Hong Kong,Istanbul, Lisbon, Madrid, Moscow,New York, Paris, Sao Paulo, Sydney,Singapore, Toronto and Zagreb.www.brandfinance.comValuation• How much should you pay?• Structure of payments• Competitor research• Brand value tracking Analytics• Business case modelling• Sponsorship impact on driversof demand• Return on investment• Sponsorship objectives/KPI• Commission of market researchStrategy• Brand Audit• Brand “Fit” analysis• Stakeholder mapping• Brand Licensing• Budget setting / allocation Transactions• Brand due diligence• Negotiation strategy• Brand licensingOur ServicesAt Brand Finance we have worked with world leaders in the sports industry helping themto build and understand their brand. We apply all of our core service offerings to the sportsindustry ensuring you get the most out of your partnership and brand assets. Our servicesare tailored separately towards the sponsor and the rights holder.• Valuation of rights• Structure of charges• Competitor research• Market review & Expectations• Proof of ROI• Quantification of sponsorshipbenefits• Database management• Brand Audit• What to license• How to license it• Selecting the right partners• Building a more appealingbrand to license• Brand extension /diversification• Tax efficient brandstructuring• Transfer Pricing• FundraisingRightsHolderSponsor
Contact DetailsBrand Finance is the leading brand valuation and strategy firm, helping companies tomeasure, manage and maximise the value of their brands for improved business results.For further enquiries relating to this report, please contact:David HaighCEO, UKdavid.firstname.lastname@example.orgEdgar Baum,North Americae.email@example.comXander Bird,Australiax.firstname.lastname@example.orgSamir Dixit,Singapores.email@example.comGilson Nunes,Brazilg.firstname.lastname@example.orgJoao Pinto GoncalvesPortugalj.email@example.comHany Mwafy,Middle Easth.firstname.lastname@example.orgMuhterem IlgunerTurkeym.email@example.comUnni KrishnanIndiau.firstname.lastname@example.orgMarc CloostermanNetherlandsm.email@example.comFurther International ContactsCountry Contact Email addressRussia Alexander Eremenko firstname.lastname@example.orgSouth Africa Oliver Schmitz email@example.comSri Lanka Ruchi Gunewardene firstname.lastname@example.orgSouth Korea Min Jae Son email@example.comFor further information on Brand Finance’s services,please contact your local representative:For all other countries, please contact:E. firstname.lastname@example.orgT. +44 (0)207 389 9400www.brandfinance.comwww.brandirectory.comwww.brandfinanceforums.comDave ChattawayHead of Sports Valuation, UKd.email@example.com
MAY 2013 | BRANDFINANCE® Football 50 | 27Appendix28-29 USD table30-31 GBP table31-32 EUR tableContents