MT Special: Turning a football club into a brand

Sport is big business these days - particularly football. Here's how one of the UK's most famous clubs began to cash in.

by James Taylor
Last Updated: 19 Aug 2013

English football is a global phenomenon: according to some estimates, the Premier League is now watched by 2.9bn people around the world (nearly half the planet). This represents a huge opportunity for our leading clubs – and in the last 20 years, Manchester United in particular have exploited it to the full, turning themselves into a financial powerhouse.

But others are starting to play catch-up - notably Liverpool, which has a similarly storied history to Man United, but until recently had failed dismally to match its progress off the pitch (and continues to lag behind on it, perhaps as a result). Since hiring Ian Ayre as commercial director in 2007, the club has really raised its game: commercial revenues are up by 85%, while its TV channel now has a global audience of 100m. That makes it an interesting case study in how to turn a modern football club into a global 'brand' - since there's a very clear 'before' and 'after'.

So what changed? 'As a business, Liverpool hadn't geared itself up to capitalise on the growth of football,' Ayre (who’s just been promoted to managing director by the club's new American owners) tells MT. The club had taken a rather lackadaisical, arm's-length approach to its commercial operations, many of which - including sponsorship, marketing, retail, media, even the catering - had been outsourced to third parties. So Ayre hired a new layer of middle management and brought them back in-house. The effects have been dramatic.

Liverpool also started taking a far more professional approach to that business staple, customer relationship management. 'A club like Liverpool has an enormous number of connections with its fans every day - online, by phone, at supporter clubs - but nobody was capturing that data and using it to establish a two-way relationship with them,' says Ayre. 'And if you don't know who your customers are, or where they are, how can you best serve them and make sure there are things for them to buy and enjoy? So we created something called The Single View of the Fan, which means that if you interact with the club in any capacity, we capture that data and create an individual identity for you.'

One of Ayre's biggest successes was a shirt sponsorship deal with Standard Chartered bank, which, at £81m over four years, was the biggest deal of its type ever signed. But according to Ayre, it wasn't a hard sell - no fewer than six companies were apparently involved at the final stage of the process, at least one of whom offered even more money. 'What Standard Chartered had that we thought was more valuable than that additional 20% or whatever, was that there was a real match in terms of what kind of business they are; how they conduct themselves; and what markets they're targeting for growth.' The key to a good sponsorship deal, he says, is being flexible to the sponsor's needs. 'What's vital is that every year they're with us, and every dollar they spend, they absolutely believe that they get a return on that investment.'

What's particularly remarkable about the club's recent commercial success is that it was achieved against a backdrop of boardroom wrangling, as the much-maligned former owners Tom Hicks and George Gillett were - thanks partly to Ayre himself - forced out by US-based Fenway Sports Group. But although that may have made Ayre's job harder in the short term (it's not exactly a great attraction for potential sponsors), it looks like the new owners are even savvier about the commercial opportunities on offer. For instance, they recently announced an innovative deal that will see basketball star LeBron James take a minority stake in Liverpool - the idea being that these two 'brands' can cross-promote each other in places where one is stronger and the other is weaker.

FSG is also keen to push commercial expansion overseas, particularly in Asia. And according to Ayre, the key to this is more targeted, personalised products. 'The idea is that wherever you are in the world as a Liverpool fan, you should be able to reach out and touch some of our products in your local language and currency.'
For those who have grown up walking to their local ground to watch their local club, all this talk of brands and products and return on investment must sound very foreign. But Ayre insists that it's the reality of top-level football these days; if you want to compete with the very best, this is how you have to operate. And that means milking your brand for all it's worth. As Ayre puts it: 'Whether it's what people like is irrelevant - it's absolutely what people have to accept and expect.'

If you've got a particular interest in the commercial side of football, or indeed in Liverpool FC, you can read the full version of MT's interview with Ian Ayre here.

MT spoke to Ayre for this month's feature on reputation in sport - which also includes an interview with Olympic fixer-supreme Mike Lee. You can also read that online HERE.

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