Liverpool’s Sponsorship Value: Insights from the Latest Case Study

Liverpool’s commercial prowess has long been a cornerstone of their success, and a recent case study by The Sponsor sheds light on the club’s true market value in sponsorships. This comprehensive analysis highlights Liverpool’s current deals and reveals potential earnings they might be missing out on.

Evaluating Sponsorship Worth: Fair Market Value

Fair market valuation (FMV) is critical in understanding what clubs like Liverpool could realistically expect from sponsorship deals. According to the case study, FMV is “a calculated and methodical estimate of what clubs should be earning based on sponsors.” This method ensures a transparent and competitive landscape, preventing inflated deals often linked to club owners’ businesses.

The Premier League’s Associated Party Transactions (APT) and FMV regulations are designed to keep the league fair by avoiding disproportionate sponsorship agreements. These regulations are currently under scrutiny, with Manchester City challenging them ahead of their hearing on alleged FFP charges in November.

Liverpool’s Sponsorship Journey

Liverpool’s relationship with their sponsors has been stable yet evolving. Nike has been the primary kit supplier since the 2020-21 season, capitalising on Jurgen Klopp’s successful tenure. However, this partnership is set to end with Adidas taking over from the 2024/25 season.

Standard Chartered, a familiar name on Liverpool’s kits since 2010, extended its partnership to include LFC Women in 2019, demonstrating a commitment to strengthening ties with the club.

Current and Potential Earnings

The Sponsor’s case study compares Liverpool’s current sponsorship deals against their estimated fair market value. According to their methodology, which considers reputation, audience reach, and contribution to community and sustainability, Liverpool tops the Premier League in brand value.

Despite this top ranking, the study indicates Liverpool could be missing out on £15 million annually, highlighting that Standard Chartered is getting significant value from their deal. The Sponsor explains:

“Despite missing out on the Premier League title, Liverpool’s qualification for next season’s Champions League competition ensures the club and its sponsors, Standard Chartered, gain significant brand exposure next season.”

“Liverpool’s value as a sponsorship asset is not limited to their on-field success and media exposure.”

“Our research shows brands that partner with Liverpool benefit significantly from association with one of football’s most successful clubs.”

Liverpool vs. Manchester City

Interestingly, despite their challenges, Manchester City leads the Premier League in sponsorship earnings. Their current deal brings in £67.5 million annually, compared to Liverpool’s £50 million. This stark difference underscores the potential for Liverpool to renegotiate and maximize their sponsorship revenue.

The Value Beyond Money

Liverpool’s appeal to sponsors goes beyond financial metrics. Their cultural relevance, fan engagement, and actions towards social causes make them a highly attractive partner. The Sponsor emphasizes:

“Liverpool is a culturally relevant football brand in terms of fan engagement, star power, and action towards social causes, which sponsors place considerable value on.”

In conclusion, while Liverpool is currently underleveraged in sponsorship revenue, its overall value as a brand remains unparalleled. As Adidas steps in and with potential renegotiations, Liverpool could significantly boost their earnings, capitalising on its immense market value and global appeal.