For any major football team the nearing of a major partnership brings about the need to see what comes next, and making sure that it is better than what went before.
There are few more valuable commercial deals for Liverpool than the one that sits on the front of their shirts. Since 2010 that partnership has been with financial services giant Standard Chartered, a deal that has risen in value from the £20m per year deal over four year that was inked under the ownership of George Gillett and Tom Hicks back in 2009. It is a deal that is now worth double that annually, having risen from £20m per year to £30m per year by 2015, and a further £10m in 2018.
Standard Chartered have the option to continue their partnership with the Reds and they have expressed an interest in doing that, the ECHO understands, with discussions said to be ‘live and ongoing’. But Monday morning saw the development that the club were seeking other avenues, including the new and still controversial market of cryptocurrency and blockchain.
As it stands, however, little has changed. Liverpool are in the process of sounding out firms from a variety of industries over the partnership, largely to determine just how much the value the partnership holds in 2022, how it compares to rivals and how much leverage success on the pitch has changed their ability to maximise revenues.
When Standard Chartered agreed a deal to extend their partnership with Liverpool through to the end of the 2022/23 season it was done at a time before the club had won the Champions League in 2019, won the Premier League in 2020 and had seen its already enormous global brand continue to grow by virtue of their continues success and the appeal that having a star-studded squad with the charismatic Jurgen Klopp at the helm brings.
The bargaining position for Liverpool and owners Fenway Sports Group is as strong as it has ever been, and that will be something likely reflected in a record new deal that moves them away from parity with the likes of Arsenal and Tottenham Hotspur, past a flailing Manchester United and keeping on the trail of what Manchester City are able to deliver, which is aided somewhat from a simpatico relationship with the Gulf states where their ownership have considerable influence.
Cryptocurrency, blockchain, media, travel and tourism, fast-moving consumer goods, electronics and financial services firms have all been courted and through conversations with these firms the club will get a better grasp on what the strength of the current market is and, most importantly, their position in it.
While the interest from cryptocurrency firms may cause some concern for some the presence of them in the conversation will likely be key, even if it isn’t them that are to be the partners for the front of shirt sponsorship for the 2023/24 season and beyond. There is a reason for that. This is the first foray into the market for a main front of shirt sponsor for Liverpool since before the pandemic and things have changed for certain industries, some have grown and others, such as travel and tourism, have been hit hard. One industry that has grown enormously has been crypto, and that growth has seen a flood of capital arrive into the market, and crypto firms are willing to spend big money thanks to that flood of capital on marketing and sponsorship. Deals with the likes of Formula One and the NBA have been clinched, as have individual team deals across world sport.
The presence of crypto firms in the conversation will likely help drive up the price in the market, meaning that what could potentially have been a less buoyant sponsorship market has had its values driven up through the willingness, and ability, of crypto firms to spend. That doesn’t mean that the one who writes the biggest cheque gets the deal, but what it does mean is that the value of the partnership will be increased through other industries knowing they will have to continue to stump up the big numbers to compete.
Liverpool are currently on something of a fishing exercise, and determining the value of the market will also be key to Standard Chartered understanding where they sit in it, and how much it will cost to keep their relationship, which has been described as ‘extremely positive’ going on beyond 2023.
The rise from 2009 to 2015 was one of £10m per season. The rise from 2018 was another £10m. The success of the Reds in the past three years or so will mean that it will likely take a rise greater than another £10m per year to secure the partnership. The strength of the Premier League’s appeal has endured despite the pandemic, as seen in the record TV revenues that have been negotiated globally for the next cycle domestically and internationally. With Liverpool one of the most watched clubs, whose presence in European competition goes to deep, who have global appeal matched by very few who are now appearing in front of more eyeballs than ever before, FSG will be confident of delivering a major financial success with whoever partners with the club next, whether that is status quo with Standard Chartered or someone new.
Commercial success for Liverpool is one of the key factors in them being able to invest on and off the pitch given the more business focused approach of FSG when compared to some of their rivals. Making sure that they are flexing their muscles when it comes to leveraging their global position will be important over the next few years. They have never had a stronger hand to play.