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SBD Global/November 26, 2012/Marketing and Sponsorship

Arsenal Signs New $240M Shirt, Stadium Naming Rights Deal With Emirates

Arsenal has agreed to a $241M shirt and stadium naming rights deal with Emirates.
Arsenal FC "added commercial firepower" to Manager Arsene Wenger’s team-building options by signing £150M ($241M) worth of shirt sponsorship and stadium naming rights deals with Emirates, according to Roger Blitz of the FINANCIAL TIMES. The five-year deals are "extensions of existing contracts" with Emirates for the Premier League club. With a new kit supplier deal expected to be announced shortly and the Premier League’s new TV deals beginning in '14, Arsenal is "on course" to exceed £300M ($481M) in annual commercial revenues in two years. Arsenal CEO Ivan Gazidis said the original Emirates deals had helped the club’s stadium development, and the new deals were "just as critical to keep us at the top of the game in England and Europe." No breakdown of the new deals was given, although Arsenal said that they were worth £30M ($48M) a year (FINANCIAL TIMES, 11/23). As part of the deal, Arsneal's home will continue to be known as Emirates Stadium until '28. The Emirates brand will also continue appearing on the front of Arsenal's kit. The new agreement contains a number of marketing rights, which come into effect immediately (Arsenal).

FAST CASH: In London, James Olley wrote Arsenal requested that the deal’s payment structure be frontloaded to ensure it has "funds to invest in the team as soon as possible." The club’s cash reserves stand at £70M ($112M) with £30M ($48M) "retained as a contingency fund" should they fail to qualify for the Champions League. Emirates is expected to pay in excess of £30M early next year in a move that "will come too early for the January window but leave the club in a powerful position at the end of the season." Gazidis: "We want to be able to invest in the team a little bit more now so we’ll have that capability by the summer. We can pay bigger salaries, and I think we can invest more in transfer fees now. How we make those decisions will be based on a manager whose judgement over the years has been shown to be absolutely outstanding" (INDEPENDENT, 11/23). Also in London, James Riach reported Gazidis also said that the cash injection "will leave the club less reliant on revenue from the stadium, which has resulted in high ticket prices." Gazidis: "There's a lot of people that work passionately at this club who care about this club just as much as the fans do. Fans don't have a monopoly on caring about the club. Arsenal's kit deal with Nike will expire in 2014, and reports suggest the club will sign a new agreement with the German brand adidas" (GUARDIAN, 11/23). In London, Laurie Whitwell wrote supporters hoping the cost of tickets would be reduced by the extra income "may be disappointed." Gazidis: "I didn’t say they would come down. I think we’ve been very responsible on ticket pricing. Since we’ve moved to the new stadium we’ve had two increases in ticket season prices" (DAILY MAIL, 11/23).

A VIABLE PARTNER: Emirates CEO & Chair Sheikh Ahmed bin Saeed Al Maktoum said, "Arsenal’s strong appeal around the globe and ambitious approach to the game parallel our own approach to business, making them a valuable partner for our brand. We continue to see immeasurable value in our global sports sponsorships and our sponsorship with Arsenal is no different. The club has been an important enabler of the growth of our business over the last decade and we are confident this will continue as part of our extended deal" (GULF BUSINESS, 11/25).

MAKING CHANGES: BLOOMBERG's Tariq Panja reported Arsenal's latest figures showed it gets about £53M ($85M) from sponsorships, less than half of that brought in by ManU, and lower than Liverpool and Chelsea. Arsenal has trailed in commercial income because it "signed long-term agreements to help fund the construction of Emirates stadium," where it moved from the old Highbury ground in '06 (BLOOMBERG, 11/23).
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