The commercial landscape of professional sports exhibits more commercial promise than ever before. In a climate of limited resources and seemingly unlimited opportunities, sports clubs require laser-focused strategic direction in order to compete off the field of play. Every club is nuanced, meaning there isn’t a singular approach that can be exalted as definitive to maximising potential, however, by analysing the strengths across the top performing teams in Euromonitor International’s Global Club Attractiveness Index, clubs can better understand both the ingredients (the data) and the recipe (strategy) for success, allowing them to unlock new fans and commercial partnership opportunities globally.
How are clubs harnessing digital to establish a global reach?
Through continued commercial outreach with some of the largest teams and leagues in the world, we are always drawn back to two questions: how can we unlock new fans in various markets, and how do we strike the right balance between digital and traditional growth methods? The impact of a strong social media footprint globally has become an important driver of overall team valuation, as it allows both local and global fans to engage with the leagues and teams they support and illustrates commercial potential far beyond stadium confines.
Real Madrid is the most followed sports club globally, with over 230 million followers across Facebook, Instagram, Twitter and Weibo. A commercial juggernaut in professional sports, the Spanish club remains a leader in social following and enjoys a global reach well reflected in its partnership portfolio, inking deals with adidas, Audi, Nivea for Men and Coca-Cola, among others. Real Madrid’s partnership with Emirates Airlines remains the most expensive shirt sponsorship in European football according to sources, valued at US$84 million annually, surpassing other mammoth deals such as Chevrolet’s sponsorship deal with Manchester United.
FC Barcelona has over 224 million followers and sits just behind its La Liga rival, and remains a constant threat to Real’s supremacy in this space. In 2018, showing impressive results in domestic competitions, FC Barcelona grew its online fanbase by 8 per cent compared to the rather marginal 1 per cent of Real Madrid. Nevertheless, a vast social media following offers both clubs an unparalleled brand value across the globe, and with La Liga games set to be broadcast on Facebook in India and seven other South Asian countries from 2018-19, the future looks promising. Furthermore, North America’s familiarity with the league and its clubs is expected to be further solidified following the announcement of plans to play a selection of regular season games in the US and Canada.
Targeted social media
The importance of sustained social media activity directly targeted at particular markets shouldn’t be underestimated. Reacting to the usage trends and producing localised content is essential in order to attract new fans’ attention in global markets.
Celebrity endorsements are another important feature of engagement with fans on social media. According to the Euromonitor International Global Consumer Trends survey 2016, 45 per cent of consumers state they are influenced by celebrity endorsements almost every day; a statistic that directly correlates with the star quality of top-flight professional sports teams.
Some major leagues are already implementing these trends in their social media strategy. The National Hockey League (NHL) notably launched a hockey puck challenge for Chinese fans on Weibo, WeChat and Twitter (NHL stars stacking as many hockey pucks as possible with chopsticks in a given time), Premier League launched an official app in Mandarin for fans in China, and the National Football League (NFL) chose Chinese celebrity Kris Wu to be the NFL ambassador in China and to sing at the Super Bowl LIVE festival in 2018.
Sport as a product
Despite the demonstrable value of the Real Madrid and FC Barcelona brands, the margin both on and off the pitch between the two clubs and the remaining La Liga clubs remains significant. Thus, La Liga’s challenges hinge not just on how well it distributes native content to various platforms engaging with global fans, it comes back to the foundation of a league as an entertainment product in a world where content abundance and consumer distraction are the new norm. Real Madrid and FC Barcelona rank at the very pinnacle of the Global Club Attractiveness Index, yet, when benchmarking leagues against each other, La Liga stands seventh overall.
In fact, according to the sports market metrics within the Global League Attractiveness Index such as average attendance, ticket spend, sell-out ratio and social media footprint, the NFL ranks number one, outperforming La Liga across the board with the exception of social media following. The NFL on average brings in more than double the number of fans per game than La Liga. The NFL boasts a 96 per cent sell-out rate, whereas La Liga fills around 70 per cent of seats.
A wider variety of champions and a stronger league’s competitive balance are useful proxies in determining the value of an entertainment product – and again, in these departments, the NFL wins. The NFL, of course, faces challenges of its own on the quest for global growth, yet the strength of its home fanbase is second to none.
Star power
Another behemoth of European football, Juventus FC, saw a 40 per cent surge in digital following over a year to December 2018 resulting in a grand total of over 65 million followers. The arrival of Cristiano Ronaldo – an online juggernaut himself with over 355 million followers on social media – proved to be beneficial for Juventus – both on the pitch and in attracting more attention to the club’s overall entertainment product. Within the first 24 hours of signing Ronaldo, Juventus gained over one million followers on Twitter and sold 520,000 shirts bearing Ronaldo’s name compared to a total of 850,000 shirts sold by Juventus during the entire 2016-17 season (according to reports).
If Juventus is to continue its winning streak with Ronaldo on board, the club will look to further capitalise on growing brand awareness globally, much of which will be achieved through digital channels. Attracting lucrative sponsorship deals from international companies will also aid in further establishing Juventus as a global brand. At the end of 2018, due to increased visibility of its brand, the club has already been able to renew its multi-year contract with adidas, seeing the club nearly doubling the deal value per season.
Geographic commercial partnership diversification has also been seen at Paris St Germain (PSG) after signing Neymar. The Brazilian’s transfer to PSG has been a component of the club’s long-term strategy to move to the next level in terms of sport success, and consequently to attract more fans and higher value sponsorship agreements from outside France. As a result, in 2017-18 PSG has reduced the share of France-based sponsors from 33 per cent to 24 per cent.
Commercial partnerships by their very nature are symbiotic, and leagues and teams are realising that infrequent activations in growth markets, or a social media strategy lacking a localised touch is limited in what it can achieve. By working with partners within target growth markets, the benefits are mutual and have the ability to further catalyse online traffic to a club’s digital assets.
Global versus local
Does the globalisation of professional sports render the local economic environment obsolete?
The short answer is a resounding no. There is no doubt that the opportunity to achieve global growth is ripe. However, sports properties remain irrevocably linked to the city and country in which they operate. To win abroad, clubs must first win at home. Understanding in detail the size, spend power, digital readiness and youth population of a club’s home market allows clubs and potential sponsors to contextualise the business environment and can act as a springboard or a hindrance towards unlocking a global fanbase.
Unsurprisingly, US clubs are leaders in economic statistics determined by high purchasing power and willingness to spend on activities such as sports and entertainment. Clubs located in the UK, Japan and South Korea boast high levels of consumer digital readiness with over 94 per cent of their populations using the internet. At the same time, China and India show high percentages of Generation Z and Millennials as a share of total population – 40 per cent and 53 per cent, respectively, thus providing sports teams strong potential for further growth, especially given the sheer size of their markets.
The global opportunities are hard to ignore for all major rights holders in professional sports. China’s vast consumer market makes clubs in the market strong contenders for investment. For example, Alibaba acquired a 50 per cent stake in Guangzhou Evergrande FC for USD192 million in 2014. With strong financial backing, the highest average crowds (over 45,000) and social media following (7.7 million) in China, the club has attracted such partners as Nike (kit supplier) as well as Real Madrid, AC Milan and Bayern Munich, which are helping the club to build its footballing academy and ensure its further dominance in the league.
Entertaining Asia
With a young and growing population behind its growth, India’s cricket T20 league – Indian Premier League (IPL) – is one of the top sports leagues in Asia Pacific and Cricket T20 leagues globally. One of its teams, the Kolkata Knight Riders, despite its fail to win the league title during recent seasons, has been climbing up the league table, attracting the highest average attendances (over 48,000) not only in Asia but also garnering greater average attendances than many European football powerhouses such as Juventus or PSG. The club boasts the highest social media following in Asia (over 21 million), exceeding such clubs as Dallas Cowboys or Tottenham Hotspur.
Making the connection between the Kolkata Knight Riders fan and the Cleveland Cavaliers or Tottenham Hotspur fan is essential. All clubs, all leagues, all sports – plus, of course, any other number of entertainment offerings out there – are battling it out for the attention of that fan.
Sports properties need to understand the demographics of the fans, their willingness and ability to invest in the matchday experience and the time spent engaging on digital platforms. They also need to understand how best to engage that fan – through partnerships, native content on social media, or a combination of both – ensuring that whatever strategy is implemented is sustainable.
A quest for a global fan base, however, means protecting and growing the entertainment value of the product at home and executing a sustainable growth strategy, utilising digital as a means to an end, rather than an end in itself.
