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When the Premier League was formed in 1992, the first front-of-shirt sponsors included companies that sold photocopiers, beer and timber, one club, Wimbledon AFC, didn’t even have a sponsor. Fast forward 30 years and the sponsorship market for Premier League clubs has grown in line with the league’s worldwide popularity, with £462.5 million agreed for kit sponsorship for the 2022/23 season. However, change is on the horizon, because as of 13 April 2023, Premier League clubs have collectively agreed to withdraw gambling sponsorship from the front of matchday shirts. The change will take effect at the start of the 2026/27 season. This article explores the wider context to this decision, the commercial impact for Premier League clubs, and potential commercial opportunities that may present themselves due to the change.
Wider context
The current primary legislation in the UK is the Gambling Act 2005. However, changes to the gambling landscape and the shift to online betting in the past 18 years, have exposed shortcomings in the legislation. This has led Iain Duncan-Smith, former Conservative Party leader, to claim the UK is “the country with the most liberal gambling laws in the world”. With both a desire and need for reform, on 27 April 2023 the government published its white paper on gambling, titled ‘High Stakes: gambling reform for the digital age’. It set out six core elements that need to be addressed with key recommendations for each. Regarding gambling sponsorship in football, the government acknowledged and welcomed the Premier League’s decision, but there was no further discussion of the issue.
Considering the Premier League and its member clubs were heavily involved in consultations with the Department of Culture, Media and Sport on the white paper, some view the voluntary decision as a pre-emptive measure to avoid the imposition of more stringent legislation. One commentator has claimed the “government felt they had to do something to keep the hawks at bay” and points to the limited scope of the Premier League’s withdrawal; the change has been postponed for three seasons and it applies only to front-of-shirt sponsorship.
Another important impetus for change comes from the Committee for Advertising Practice, a body that works to keep UK advertising “legal, decent, honest and truthful”. Its new measures apply to gambling advertisements and seek to “safeguard young people and vulnerable audiences”. The changes, which came into effect on 1 October 2022, state gambling adverts must not be of strong appeal to under-18s by being associated with “youth culture”. As youth culture includes sport, gambling advertisers that seek to promote their brands will no longer be able to use Premier League footballers due to their considerable under-18 following on social media.
Impact on Premier League
There’s no doubt that both gambling, and sponsorship money from gambling companies, are deeply entrenched in the Premier League. Eight clubs currently have gambling companies as front-of-shirt sponsors with the cumulative value of these deals being £60 million a year. However, this is just the tip of the iceberg; the extent of the Premier League’s relationship with the gambling industry is shown by a study conducted by the University of Stirling. In 2020, the university analysed five major football matches and found that a gambling sponsor was referenced every 21 seconds during a typical TV broadcast. The reason why gambling is so deeply ingrained in the game is a simple one, commercial reality.
While ‘top six’ clubs can attract lucrative, well-known sponsors, including Emirates (Arsenal), Ethiad (Manchester City) and Three (Chelsea) due to their global popularity, for other clubs finding sponsors that are willing to pay big fees is difficult. Brighton owner Tony Bloom conceded “gambling companies pay best so it’s a difficult decision to turn them down”. Similarly, Christian Purslow, chief executive of Aston Villa, told a fan consultation group that gambling companies often pay double the money offered by other sponsors. The fact Nottingham Forest chose to play the first half of the 2022/23 season without a front-of-shirt sponsor before partnering with charity United Nations High Commissioner for Refugees (because the club couldn’t find a sponsor that would meet its perceived value) demonstrates the difficulties clubs face. Looking forward, notwithstanding the future impact of the withdrawal, there will be change as Brentford, Fulham and Wolverhampton Wanderers are all due to see their shirt sponsorship agreements expire at the end of this season, which has led some to predict a sponsorship scramble.
It’s important to remember the limits of the future measure. Clubs can continue to make deals with gambling companies for the next three seasons. Therefore, while Brentford has indicated that it wants to replace its current sponsor Hollywood Bets, both Everton and Aston Villa appear to be making the most of the grace period and have recently committed to multi-year deals with gambling companies. Further, gambling sponsorship can continue to be featured in other areas, including shirt sleeves, advertising hoardings, stadium naming rights and training kits. This has led many, including football finance expert Kieran Maguire, to predict an increase in the market value of these deals.
Sponsorship is vital for clubs’ income, and its impact varies depending on the club’s stature. Manchester City, the 2022/23 Premier League winners, has an impressive list of 54 partners, including global giants like Nissan and EA Sports, as well as regional partners like Cadbury. Its total commercial income in 2021/22 was £309 million, with shirt sponsor Etihad contributing £50 million (16%). Liverpool, another top club, earned £247 million in commercial income, with its shirt sponsor Standard Chartered contributing £50 million (20%).
However, smaller clubs heavily rely on sponsors, and the withdrawal of gambling sponsorship affects them significantly. For example, Brentford’s commercial revenue was £15.6 million, with its shirt deal with Hollywood Bets accounting for £3 million (20%). Newcastle’s commercial revenue reached £28 million, and its shirt deal with Fun88 contributed £8 million (28%). Although gambling sponsorship is just one aspect of Premier League sponsorship, its withdrawal has a minimal impact on larger clubs due to their substantial commercial income. However, smaller clubs outside the top six face financial gaps and the challenge of finding new sponsors. Nevertheless, this situation also presents opportunities for these clubs to seek new partnerships and ensure their financial stability and growth.
New opportunities
The past few years have seen the emergence of various sectors in the football sponsorship market, including the online car market, cryptocurrency companies and trading platforms. There’s no certainty these opportunities will be available to clubs moving forward. Cazoo, the car retailer, has chosen not to renew its £6 million per annum deal with Aston Villa, with the club reverting to type and choosing online casino BK8 as its replacement. In the 2021/22 season, all but one Premier League club had a cryptocurrency sponsor, but there are concerns over the stability and lack of regulatory framework in the industry. One example is Chelsea which signed a lucrative deal with Whalefin; however, the agreement was terminated only seven months after it was agreed due to financial problems at the company.
There are widespread concerns that swapping gambling sponsors to cryptocurrency would be a like-for-like change and expose fans to unregulated, high-risk financial products. In Spain and Italy, where gambling companies were prohibited from sponsoring football clubs in 2021 and 2019 respectively, cryptocurrencies rushed to fill the space vacated by betting firms. Top clubs, including Atletico Madrid, Valencia and Atlanta, were all sponsored by Plus500, a contract for differences trader. However, the Financial Conduct Authority has warned against the leveraged nature of this product, stating that “they are generally unsuitable products for inexperienced investors”. Another example is Arsenal and its official Socios ‘fan token’, which the Advertising Standards Authority took aim at the club for as it deemed it to “trivialise investment in cryptoassets and take advantage of consumers’ inexperience”.
One sector that’s proven successful is tourism, as demonstrated by the partnership between Arsenal and Rwanda with the club currently receiving approximately £10 million a year from the ‘Visit Rwanda’ sleeve sponsorship deal. In an attempt to follow suit, Tottenham Hotspur was on the verge of striking a £42.5 million deal with South Africa, similarly named ‘Visit South Africa’; however, the agreement was cancelled following public backlash. Clearly then, navigating the sponsorship market is difficult enough for clubs even without the future changes for gambling companies. However, the commercial strength of the Premier League must be acknowledged – known as the ‘de facto European Super League’, with an estimated audience of 3.2 billion, it’s seen by many as “the world’s most cost-effective advertising platform”. The wave of North American club owners coming into the league recognise the huge potential for growth as they believe commercial rights are currently undervalued.
The best deals are long term that create a strong resonance with a brand, like Emirates and Arsenal (that’s been ongoing since 2004) and Brighton and American Express (who signed a 12-year deal in 2020). Innovation has a key role to play too. Clubs could look to use LED advertising more effectively on pitch side hoardings with localised advertising; those watching in the UK may see UK brands and those in China could see Chinese brands. Further, clubs may follow the example of Manchester City which installed “supersized LED” digital advertising hoardings that give advertisers “the ability to display multiple aspects of the same campaign across the two levels with options for different messages or languages”. Bournemouth is looking to replicate the success of non-league Wrexham in producing a fly-on-the-wall documentary series titled David versus Goliaths in an attempt to increase its global fan base which would, in turn, drive up potential sponsorship deals.
Conclusion
In conclusion, the removal of gambling companies from the front of shirt sponsorship in the Premier League creates both a void and opportunities for clubs. The decision to withdraw gambling sponsorship reflects the need for reforms in the gambling industry and addresses concerns regarding the influence of gambling on young audiences. While larger clubs with substantial commercial income are less affected by this change, smaller clubs heavily reliant on gambling sponsors face financial challenges. However, this shift also opens opportunities for clubs to explore alternative sponsorships. Various sectors, such as the online car market, cryptocurrency companies and tourism, have emerged as potential avenues for sponsorship. Nonetheless, there are concerns regarding the stability and regulatory framework of certain sectors like cryptocurrency.
Navigating the sponsorship market is a complex task for clubs, and long-term deals that create a strong brand resonance tend to be the most successful. Innovation, such as localized LED advertising and engaging documentary series, can also enhance clubs’ global appeal and attract new sponsors. Ultimately, the Premier League’s commercial strength and global reach make it an attractive advertising platform. As the league continues to evolve and attract investment, there’s immense potential for clubs to secure lucrative sponsorship deals and ensure their financial stability and growth in the future.
Peter Davie is a trainee solicitor at Shoosmiths.