The business models of English Premier League football clubs would keep most accountants awake at night.
Wage bills equate to upwards of two-thirds of turnover in many cases and their major assets (players) depreciate in value more often than they increase. On the face of it, they mostly appear to teeter on the edge, with the only things keeping them from the abyss being Champions League qualification for the bigger clubs or maintaining top league status for the smaller ones.
However, three factors allow some teams in the top flight to make a decent stab at being sustainable businesses: buckets of TV money, huge global interest and something unique to sporting organisations – the fact that the key stakeholders, fans, have an unerring and lifelong devotion that no brand in any other business sector can boast. Increasingly savvy marketing, using ever more sophisticated data systems, has harnessed the passion fans across the world have, while many clubs are attracting sponsors from all corners of the globe keen to tap into this huge interest. For some, the innovation hasn’t stopped there.
Manchester City may be second favourite with the bookies to win the Premier League, behind last season’s winner Chelsea, but on the eve of the new season it can boast one title – the Premier League’s most innovative business model. Our exclusive inside look at City’s ‘family of clubs’ is on page 12. The Abu Dhabi-based owners have accumulated teams from the US, Australia and Japan that share centralised marketing and other resources, with Manchester City at the heart. They are local entities with a global approach and framework – a model our columnist Mark Ritson has called a ‘house of brands’ approach, in contrast with Manchester United’s ‘branded house’. “With this structure we’re doing something that’s never been done before,” Ferran Soriano, CEO of City Football Group and Manchester City FC, boldly claims. “That means you have to take risks, innovate and not be afraid to try new things.”
Innovation, creativity and effectiveness are also at the heart of The Masters of Marketing, our new awards celebrating the best of the best in marketing. The Masters are about highlighting the amazing work you all do. Shortlisted entries will be showcased at the Festival of Marketing in November where the award winners will also be announced. So, if you want to win recognition for your excellence at the freshest and most innovative awards in marketing, go to mwlinks.co.uk/MastersofMarketing to enter. Deadline for entries is 9 September.