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Volume 10 No. 22

Marketing and Sponsorship

Barclays is considering ending its £40M ($66M)-a-year sponsorship of the Premier League after senior figures at the bank said it had "zero value" in the U.K., according to Kamal Ahmed of the London TELEGRAPH. The bank’s current deal runs until the end of the '15-16 season and members of Barclays’ leadership team "are concerned that rapid price inflation for sports rights will mean a much higher amount will be demanded by the Premier League for the next three-year deal." Barclays has been the sponsor of the EPL since '01 and agreed to pay £120M in '12 "for the present rights." That was 50% higher than the previous deal, which cost £82M. The move is part of a wider review of the bank’s business, which will mean pulling out of "glamour projects" and focusing instead on much higher levels of technology for customers, far fewer staff and fewer branches (TELEGRAPH, 1/25). In N.Y., Max Colchester wrote as well as football and tennis, "Barclays also sponsors the South African rugby team, a series of golf tournaments and golfer Phil Mickelson." Several of these flagship sponsorship deals were brokered under former CEO Robert Diamond "as the bank sought to raise its profile both in the U.K. and abroad." Following Diamond's departure from the bank, "Barclays's new management has sought to present the bank in a more sober light and cut costs" (WALL STREET JOURNAL, 1/26).

FLY ON THE WALL: In London, Ben Rumsby wrote Barclays was accused of allowing its sponsorship of the Premier League to become little more than "wallpaper" after it emerged it was considering ending its association with the EPL. M&C Saatchi Sport & Entertainment CEO Steve Martin claimed that Barclays "had failed to fully exploit an association with one of sport’s most recognisable brands." Martin: "It’s become a bit like wallpaper. There’s been less innovation coming through it, it’s still a bit of a badging exercise, and it doesn’t surprise me it’s not particularly working, because I’m not sure they’ve worked particularly well on it" (TELEGRAPH, 1/26).

Puma has agreed to a kit supply deal with Arsenal beginning July 1. Puma also acquires licensing rights for Arsenal-branded merchandise. The deal is the biggest ever for Puma and Arsenal (Puma). The five-year deal is worth £150M ($249M) (London TELEGRAPH, 1/27). REUTERS' Keith Weir noted Puma replaces Nike, which has "provided Arsenal's red and white shirts for the past two decades." The agreement "shows Puma's determination to re-establish itself as a core sports brand" under new CEO Bjoern Gulden after moving more into lifestyle and fashion (REUTERS, 1/27). MARKETING WEEK's Lara O'Reilly reported the deal "usurps the contract renewal Arsenal signed with Emirates airlines for shirt and stadium sponsorship" in '12, which is worth £150M over five years. Gulden: "Arsenal have been a key strategic target for Puma for a number of years now. Arsenal represents a major commercial and marketing opportunity to reinforce Puma’s credibility as a global sports brand, and we have full confidence the plans in place to activate this partnership will have a significant global impact." The club has earmarked '14 "as the start of a period in which its commercial revenues will grow sharply after renegotiating deals with a number of existing sponsors," including stadium sponsor Emirates (MARKETING WEEK, 1/27).

SPENDING CASH: In London, James Riach reported Arsenal Manager Arsène Wenger "is set to sign a new contract" and "will be given a huge transfer budget in the summer" following the Puma deal. Arsenal CEO Ivan Gazidis said, "The money from this deal will be available to the club from this summer" (GUARDIAN, 1/27). Also in London, Jeremy Wilson reported the deal will increase Arsenal's revenue by £22M ($36M). It is the biggest deal in English football history. However, ManU is "soon expected" to announce a £76.9M ($227M) deal with Nike. Barcelona and Real Madrid's current kit deals are worth £27M ($45M) and £31M ($51M), respectively (TELEGRAPH, 1/27). The BBC reported Cardiff City and Newcastle are the only other Premier League teams to have kit deals with Puma. Puma also supplies kits to the Bundesliga's Borussia Dortmund and Italy's national team (BBC, 1/27).

RARE OPPORTUNITY: In London, Roger Blitz wrote the deal marked a "rare opportunity for the German company to gain a foothold in the top European fooball club market. " One source "familiar with the industry" said,
"What Puma is able to get in the market is dependent on what Nike and Adidas don’t take.” Gulden said "the deal made good on a promise he made when he took over" the struggling company in the summer that he would "prioritise sports brands over lifestyle brands" (FINANCIAL TIMES, 1/27).

Chinese tennis player Li Na "is set to earn a lot more" than just her $2.3M prize money for winning the 2014 Australian Open as "top brands from around the world continue to compete for her endorsement," according to the WANT CHINA TIMES. Li "is now said to have 13 endorsement deals," which includes Nike, Babolat, Rolex, remedial tape company SpiderTech, Mercedes-Benz, Chinese insurer Taikang Life, Crown, Visa and Samsung. This makes her the Chinese athlete "with the most corporate partnerships," ahead of track star Liu Xiang and retired retired NBA player Yao Ming (WANT CHINA TIMES, 1/27). Wealth-X estimates the net worth of Li to be $40M after her singles win at the Australian Open last weekend. Li became the first Asian to win the Australian Open. She also became the oldest winner of the tournament's women's title (Wealth-X). In N.Y., Will Davies wrote WTA Chair & CEO Stacey Allaster said that it is "no coincidence" that women's tennis has experienced rapid growth in Asia since Li "started to reach the business end of Grand Slam tournaments." Allaster said, "Li is the most influential player this decade for the growth of women’s tennis." Australian Open organizers said that Li was "the most popular female player during the tournament in terms of social media attention" (WALL STREET JOURNAL, 1/27).

Bundesliga club Eintracht Frankfurt "has signed a new kit supply deal with Nike." The club's deal with Nike will start with the '14-15 season. Nike "will replace Jako, which has been a partner of the club for 11 years." Eintracht Frankfurt Exec Chair Heribert Bruchhagen said, "We've had a great, successful and extraordinarily trustworthy time with Jako." It has been reported the club's deal with Nike "will run for five years" and is worth €3M ($4.1M) annually (SPOX, 1/24). ... Bundesliga club FC Augsburg "is expected to sign a new kit deal with Nike." While the contract "has not been signed yet," sources close to the club said that "the negotiations are on the finishing stretch." The new deal would mark the end to Augsburg's cooperation with Jako, which started in '10 (AUGSBURGER ALLGEMEINE, 1/25). ... Liverpool FC has announced a two-year training kit sponsorship deal with Indonesian airline Garuda Indonesia. The two began their partnership in '12 (Liverpool). ... Scottish Premiership side Hibernian announced a new six-figure sponsorship deal with global sports drink company iPro Sport, which becomes the club's official hydration partner. In a three-year partnership, iPro Sport will supply the Hibernian players with a range of sports drinks and receive branding within Easter Road Stadium, online activity and also community activation (Hibernian FC). ... The Sauber F1 Team has announced the continuation of its partnership with insurance broker Interproteccion as a premium partner. The logos of the broker will be visible on the pylons of the front wing of the Sauber C33-Ferrari, the drivers' overalls and team gear (Sauber F1). ... Mazda has been named an official automotive partner of the Int'l Motor Sports Association and will have a presence throughout the 2014 TUDOR United SportsCar Championship. Mazda will be the presenting race title partner when the TUDOR Championship and Continental Tire Challenge comes to its home track, Mazda Raceway Laguna Seca, in May, as well as returning for the season finale Petit Le Mans at Road Atlanta (MOTORSPORT, 1/25).