Friday, 23 November 2012

Commercial Deals: From A Dummy

Hello, Hello, Hello - I've been caught up in the real world this week and missed the blog detailing the Montpellier game - Went something like this....

Misplaced pass x infinity - Kos hits bar - more misplaced passes - Peep! Peep! - BOOOOOOO! - Peep! Peep! - GOAL - Jacky!!! - GOAL! Poldi - What a hit! - Peep! Peep! - Qualification!

Today saw the start of the road to the Utopic paradise that is 2014 for Arsenal fans, with the announcement of a renewed shirt sponsor deal with Emirates, Arsenal say "Emirates, one of the world’s fastest growing international airlines, and Arsenal Football Club have today announced a new £150 million deal which grants the airline a five-year extension to their shirt partnership with the Club until the end of the 2018/2019 season. 

Brilliant. The deal is one of the most expensive in football history and only see's them trumped by Manchester United's deal with Chevrolet which commences in 2014 and will see them net £45m per season. Considering we're moving from a £5.5m p/a deal to a £30m p/a deal will see a massive weight lifted off the shoulders of The Emirates as Arsenal's only revenue stream.

But What About The Naming rights to the Stadium?

"As part of the deal Arsenal’s home will continue to be known as Emirates Stadium up to 2028" - And from reading things from decent, connected people Arsenal will receive £28m out of the £30m for kit sponsor and £2m for the continuous naming of the Emirates, £2m for naming rights sounds low but if we listen to Commercial director Tom Fox

"As for the stadium naming rights, that will be very hard to resell because it will probably always be known as Emirates Stadium now. Or “Ashburton Grove” to those of you that don’t want to call it that!"

Tom makes a point along with other financial experts that naming rights only really have a big impact on their first deal, Arsenal were hamstrung into accepting a lower than market-value deal to secure funding in the midst of building The Emirates, you throw that into the fact that The Emirates has been known as such since 2004 and couple it with these recent deals, and you'll see that they haven't really missed a trick here.

New York Mets - Citigroup paid £10m per season for the naming rights for the Major League Baseball season (American teams don't have sponsorship on the shirts)

Bayern Munich - Have a 30-year deal with insurers Allianz worth £4m a season.

Borussia Dortmund - £3m a season running until 2021.

In fact, looking at German football where "Naming Rights" are rife, the deals vary between Bayern's £4m p/a to Arminia Bielfield's £400,000 p/a deal and considering the stick that the "Emirates" name has on Ashburton Grove, Arsenal have done well. 

The crux of the issue for supporters is we're fast approaching the time for Arsenal's "Ambitious Board" to put up or shut up, we know of the vastness of their cash reserves that are sitting there now but with the expected kit deal which will garner similar or better numbers than the Emirates deal, the pressure will be on to ensure Arsenal have a squad capable of challenging for the game's greatest prizes, the football side of things must match the commercial side. The final words go to Ivan...

“The original deal with Emirates was a key facilitator of our move from Highbury and this next phase of our relationship will be just as critical to keep us at the top of the game in England and Europe"

Now it's down to Ivan and Arsene to ensure we have the team to keep us at the top of the game in England and Europe. Because we're Arsenal FOOTBALL club, not Arsenal plc FC.

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