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Posts Tagged ‘LG’

Is an £80 million transfer fee really all that ridiculous?

Posted Friday, February 11th, 2011

When football players throw their toys out of the pram demanding more money or handing in transfer requests, they’re always told that no player will ever be bigger than their respective club. But a change is occurring, players are amassing accumulated power to get their way and if the club they’re with doesn’t pay up, they know someone will. Because if you’re any good, the players marketing clout is priceless.

Players know that they’re not just footballers on the pitch who win games they’re also commodities. They demand ridiculous wages and mind blowing transfer fees because they know whatever the club is paying, they’ll be making profits just from merchandise before any football is played. When Real Madrid decided to sign David Beckham, the President told his committee that he would pay whatever was required to bring Beckham to Madrid because no matter what the fee, it would be a guaranteed money maker and he was right. They had expected to make £20 million in Beckham shirt sales over 4 years, they paid for his transfer in shirt sales before he had played his first game.

When Torres signed for Chelsea in January they weren’t just spending £50 million and getting a world class player they were also selling hundreds of thousands of shirts at full price when most clubs cut the price by 50% after Christmas. Robin Clarke, head of sports at Starcom MediaVast said ‘Chelsea is effectively getting full price for what will soon be old stock’.

Shirts are a big source of income and thus a key element of club marketing. Chelsea sponsor Samsung would’ve been delighted by the global coverage they received from the pictures and news of Torres holding the Chelsea shirt. Liverpool sponsors Standard Chartered may have been less impressed given that it focuses on the Far East and Andy Carroll is an unknown.

Paul Meadows, head of brand marketing at LG, sponsors of the Fulham team, explained that you’re always looking at the media value. When Fulham got to the UEFA final that was obviously great press but at the same time, when they avoided relegation on the last day of the previous season, it was also great coverage.

However recently the shift is moving from team sponsorship to the individual player deals. Brands want to sponsor their boots or have them in their commercials. Torres’ transfer went to the wire because his representatives were trying to keep hold of him as much as possible. Meadows explained ‘players are the magic dust that allows sponsors to connect with consumers; you don’t get the depth of relationship through team sponsorship’.

When you look at the likes of £50 million for Torres and £80 for Ronaldo it’s a lot of money and there’s no disputing that but when you view it in a marketing and ROI it’s not that ludicrous. Torres was the top selling shirt in the premiership which now passes to Chelsea and with the likes of pay-per-view revenue, mobile apps and games, webisodes; it suddenly looks like a good outlay. Whilst the players think they’re God’s gift to man kind, the team’s know they’re just a product. No doubt Ronaldo was rather pleased with himself when he became the most expensive player in the history of football but Real Madrid were probably even more pleased when they paid off the fee within a year and are have been taking outright profit since.


 
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