At this time of year, everyone is full of hope. New signings are coming in, managers are speaking of lofty goals, the promise of new investment is in the air and the losses of last season are long forgotten.
It at this time of year though that I often try to discern the business strategy of the top clubs. This year it was the aborted Beijing located Manchester derby that caught my attention. Every about it seemed at first like a great idea. Having a derby match (even a friendly with reserves would have been pretty spicy) in a massive market like China felt like a perfect opportunity to really leverage these two great clubs.
Certainly, we can’t blame them for the abandonment of the game and both of these clubs are certainly at the cutting edge commercially of what is happening in football – I have even written about Manchester City and their progressive strategy.
However, the coverage of the game that never was once again caused me concern about the rationale of these tours. I understand that they bring in fees for the games, that the local sponsors are keen for actual access to the players to put on events and it’s certainly nice to appear in the country of their fans…but what happens next?
I am not aware of a permanent base in Asia for United (it’s certainly not in their Investor presentation which remarkably still uses the 600m+ fans number from a 2012 Kantar Sport project) though City have one in Singapore and a Japanese football club as part of the City Football Group. Chelsea I believe closed their Asia office and few other clubs have a real presence internationally – so my question comes down to what are they doing to actively engage on the ground with these fans?
Of the £197m of commercial revenues in 2015, Manchester United received 79% of it in the form of sponsorship – effectively selling the badge. Content and mobile is 5% but is restricted by the big TV contracts so the rest is down to licensing and retail. Badging certainly helps the sponsor if used properly and when a deal is done for strategic rather than financial reasons it can help the club but looking at many of the brands it doesn’t feel like a strategic imperative exists at United (other than to make more money).
Whilst there is a lot of window dressing that happens I don’t think we can call many of the local deals done by any of the big clubs scouring the international markets for sponsors as being particularly strategic.
Lower down the EPL table and these tours appear to be very simple short-term cash positive ventures that are dressed up to bring in fans. There is no long lasting engagement strategy, limited resources in place to maximise the impact of such logistically challenging tours and I would doubt there is even much in terms of enhancing data capture and building out a profile of the consumer.
Which of course leads me to the opportunity that exists:
1) Building an on the ground presence in a long lasting strategic way (open an office properly staffed is a good place to start)
2) Creating a sizable database using modern tools and machine learning retargeting to engage audiences (companies such as Umbel are brilliant at dong this)
3) Long-term partnerships with local business known for building community (what Samsung did for Chelsea globally was brilliant)
4) Having a 365 day 24/7 local plan to connect in a relevant manner to local fans (it’s football, get them playing!)
The tours are a good thing, and long may they continue. City and United are amongst the best at leveraging them but they are barely scratching the surface of what it doable – and it needn’t be expensive as there are plenty of growth hacks available. As always it comes back to what are the clubs really trying to achieve? If it’s just about a cheque that is fine. It can’t be about brand awareness as top clubs don’t suffer from any issues there, but if it stops at simply fulfilling obligations and cashing cheques then the wider opportunity is just being missed.
If a club or a league was being genuinely progressive I believe the ability to unlock the revenue potential of the international markets will come. They need to demonstrate that they care about the local market and consumer otherwise, the loyalty will fade and the next champion will be held aloft.
