Manchester City has signed a deal with Nexen Tire Corp to put the Korean company’s logo on its jersey sleeves next season, the first agreement of its kind since the Premier League decided to allow sleeve advertising.
The financial terms of the contract were not disclosed. “The price point would be less than the front of the shirt, but the media value is incredible," the club’s Chief Commercial Officer Tom Glick said by phone. “There’s only a select number of positions on the top clubs worldwide and many of them aren’t available.”
By freeing up space that usually features a league logo, the Premier League created a new revenue stream for teams that are already among the world’s richest. The competition has the biggest TV deal in global soccer and worldwide exposure allows popular teams like Chelsea, Liverpool and Manchester United to sell sponsorships for top dollar.
“This is a very significant development in football sponsorship and one that brands should pay close attention to,” said Carl Woodman, U.K. managing director at Lagardere Sports, one of the world’s largest sports agencies. “The opportunity to sponsor shirt sleeves in Premier League football will provide a premium level of sponsorship association with these clubs at a more accessible price point than traditional shirt sponsorship.”
The relationship between City’s owners and its principal sponsor Etihad -- both the team and the Gulf airline are owned by the Abu Dhabi royal family -- makes it easier for the club to address any concerns Etihad might have about putting another brand on the jerseys. It may not be so easy for rivals, whose sponsors might impose a contract clause forbidding them from adding any other logos to their jerseys.
Arsenal, majority owned by U.S. businessman Stan Kroenke and sponsored by Gulf airline Emirates, is one club that won’t have a deal in place next season, while Chelsea is looking into the possibility of adding a sleeve sponsor, according to people familiar with the clubs’ marketing strategies. Chelsea would first need to examine its current conract with its main sponsor, Yokohama Tire Corp, said a separate person. The teams declined to comment.
Despite the popularity of the league overall, lesser known teams have struggled to attract major global brands. Ten teams are currently sponsored by betting companies, relationships that make their opportunities to find blue-chip partners even more difficult, said Ben Wells, Chelsea’s former executive in charge of sponsorships.
"Any revenue derived from sleeve sponsorship will be a drop in the ocean and finding good partners to play second fiddle to a main sponsor will be a challenge," he said.
Glick said a second sponsorship patch wouldn’t hurt the value of the shirt for primary sponsors, or cheapen the club’s brand.
“We’re not talking about adding an additional logo on a jersey, we’re talking about replacing one of the Premier League logos,” he said.
City is also looking to follow a trend started by its crosstown rival Manchester United by selling rights to sponsor its training uniform. "We have a number of live discussions going," Glick said.