In one of the largest sponsorship deals in global sport in 2022, Spotify will
become Barcelona’s main commercial partner from the start of the 2022-23 season. The
Swedish audio streaming service will replace Rakuten as the front-of-shirt sponsor for Barca’s
men’s team, and will replace Stanley - of Black & Decker fame - on the front of the women’s shirts,
and electronics firm Beko as Barca’s training kit sponsor. On top of all that, and most newsworthy
of all, Barcelona’s iconic Camp Nou stadium will be rebranded from July 2022 as ‘Spotify Camp Nou’,
until summer 2026 at least. Between now and then, the so-called ‘Espai Project’, at a cost of
€1.5bn, will see the famous venue upgraded and remodelled into what is being claimed will be “the
biggest sports innovation hub in the world.” But what’s in a name? Or to be more precise,
what is the economic value to Spotify of the naming rights part of their Barcelona deal?
The Camp Nou is already well established the world over for being a footballing cathedral
since it opened 65 years ago. Does anyone really think that appending ‘Spotify’ to the name
will actually lead to people using it? According to business journals in Spain, the naming element
is worth €5m per year. But looked at another way, Spotify are paying little to nothing
for the naming rights part of a four-year package that will earn Barcelona €280m, or €70m per
year. Rakuten’s existing shirt deal was worth at least €55m a year (plus bonuses) when it began,
although was amended down in the midst of a financial crisis caused by the Covid
pandemic. Stanley’s shirt deal for the women has been worth €3.5m a year and Beko’s training
kit deal was worth €19m a year when it started, but was also reduced thanks to Covid. So these
three items of Barcelona ‘inventory’ should be worth upwards of €77.5m per year in non-Covid
times, and yet Spotify is getting them all, AND the naming rights, for €70m. Is that a bargain?
Or a sign of a cash-strapped club accepting any big number in a financial storm? Or is
it a conundrum, in which the true value of stadium naming rights in football remain murky? Perhaps
it is all of these at once. Dan Gaunt is the CEO of Turnstile, a company that advises major brands
and clubs on sums they should be spending or receiving when doing sponsorship deals,
including naming rights deals, calculated objectively. Turnstile break down every component
part of a deal, and assign a financial value to it. They break this down into three categories:
“Direct benefits”, “Exposure”, and “Intellectual Property” or IP. Direct benefits include anything
included in the contract that has a real-world price tag. Let’s pretend that a company called
Imaginary Ltd want to buy the naming rights to MidTable FC’s stadium in the Premier League. Part
of their contract will include match tickets or maybe a hospitality box to entertain clients, some
signed merchandise, a few “meet & greet” days with players, some digital ads on pitch side hoardings,
and a set number of social media posts to MidTable FC’s six million followers across Facebook,
Twitter, Instagram and TikTok. This package, or something like it, might be worth a few hundred
thousand pounds a season. The “exposure” element is the value of any Imaginary Ltd branding that is
purposefully positioned to be picked up as part of a television broadcast; or in industry parlance,
it’s a “signage buy”. This might include Imaginary Ltd’s name and logo on the stand,
and some presence on the post-match interview backdrop. A calculation is then made depending
on the number of seconds of TV airtime these get across a season, multiplied by eyeballs seeing
them. It will likely be not long per game, perhaps mere seconds. Turnstile use a global viewing
database and a “signage buy” rate to work out how these seconds translate to cash. At MidTable FC,
it might be hundreds of thousands of pounds a season, and at a huge club, low millions. The
IP element is a figure that takes into account two things: a club’s global fanbase, and how that
compares to similar clubs with existing naming rights deals in similar markets. Again, these sums
won’t be enormous. Gaunt recently calculated how much a firm might pay to be Chelsea’s next main
front-of-shirt sponsor for their men’s team. He arrived at a figure of £43.4m, comprised of
£2.3m in direct benefits, £22.2m in exposure (the shirt is visible almost all the time),
and £18.8m of IP (benchmarking Chelsea as a huge club against other big club shirt deals). But
stadium naming rights in English football are not common. Take the 30 largest football
grounds by capacity for example, and 23 of them have no sponsor, from Wembley to Old Trafford,
to Anfield, St James’ Park, Villa Park, Goodison Park, Bramall Lane, Molineux,
Ewood Park and Carrow Road, to name just 10 across the spectrum. Of the seven that do, they are each
‘exceptional’ in their own way. Arsenal’s Emirates Stadium was a new-build that has always had that
name in a long-term deal worth single-digit millions as part of a much larger package
where the big money is for the shirt. The same applies to Brighton’s Amex Stadium at lower sums.
Three stadiums are named for companies affiliated to the owner’s companies or
entities in the owner’s home nation: Stoke’s B365 Stadium, Leciester’s King Power,
and Manchester City’s Etihad. And the last two, Bolton’s University of Bolton Stadium
(previously the Reebok, then the Macron) and the Coventry Building Society Arena, are both
“hyper local” and low-earning tie-ups that are as much about community relations as anything. Dan
Gaunt says English clubs can be wary over naming deals, “because fans are protective.” In
reverse order, the five most lucrative football stadium naming deals in the world are: 5:
Besiktas’s Vodafone Park, named after a huge refurb in 2013, at £5m a year 4: Fenerbahçe’’s
Ülker Stadium, renamed in 2015 in a 10-year, £6m-a-year deal 3: Bayern Munich’s Allianz Arena,
new in 2005, in a 30-year, £6.4m-a-year deal 2: Atletico Madrid’s Wanda stadium, new in 2017,
in a deal worth £8.4m a year 1: Manchester City’s Etihad Stadium, in a deal starting in 2011 that
internal club documents show was worth £15m-a-year by 2013. At that time, nine years ago,
The Etihad in fact commanded the most lucrative naming rights deal in the whole of global sport,
on an annual basis, ahead of the New York Mets’ Citi Field (then worth £12.5m a year), the Dallas
Cowboys AT&T Stadium (£12.5m a year), The MetLife Stadium of the New York Giants and
Jets (£10m a year) and the San Francisco 49ers Levi’s Stadium (£6.9m a year).
It is worth noting that objective valuations and pure return on investment are not always major
considerations in these matters, according to Ricardo Fort, a veteran deal-maker. Fort
has worked with brands including Coca-Cola and VISA and governing bodies from FIFA and the IOC
to UEFA and the NFL, and teams from football, basketball, baseball and Formula 1. Fort argues
there is a cultural difference to naming rights between North America - home to the most evolved
sports business economy in the world - and pretty much everyone else, especially Europe. High-value,
long-term naming rights deals in the USA, especially on new-build venues, are common. But,
he says: “It is virtually impossible to envisage lucrative naming rights at many stadiums already
rich in history, whether Anfield in Liverpool, the San Siro in Milan or the Maracana in Rio.” On
the other hand, he says, brands might invest in stadium naming not for return on investment
per se, but for one of five other strategic reasons. The first is achieving visibility in
a competitive market place, by making a prominent long-term investment. In 2019, for example,
Coca-Cola signed a 10-year naming rights deal for a new 17,000-seat sport, music and events
arena in Dubai, in a MENA region with fierce competition for soft drinks sales. This also
signposted investment in that region, fostering goodwill. The second is spending on naming a
venue to effectively pay a “political tax”, giving you access via sport to powerful local people and
conversations. The third reason is putting your brand on a stadium to give you access to content,
and a platform for your content or messaging. The Spotify and Camp Nou deal gives Spotify access to
sports content, and allows Spotify to market audio content to millions of Barca fans. A
fourth reason might be a particular practical benefit your company can reap from a sponsorship
tie-up. In the run-up to the football World Cup in South Africa in 2010, for example, Emirates signed
up with FIFA as a top-tier partner, and officials inside both organisations later spoke about
the deal helping Emirates as an airline secure valuable landing slots at that country’s airports
before the World Cup. Others reasons might be more vague – you might attach your name to a venue
through vanity, or – alternatively - as a means of establishing legitimacy with the public. Probably
the prime example of the latter in global sport in recent times is the crypto.com cryptocurrency
trading app paying $700m over 20 years to take over the naming rights of the venue known as the
Staples Centre in Los Angeles. We are not likely to see a football stadium anywhere in the world
commanding that kind of fee for naming rights any time soon. Not even at the Spotify Camp Nou.