Diversifying revenue streams: a new era for stadium development

Following HCR and Tribeca Abogados’s Spanish Football Business Conference, one of the key panels, “Revenue diversification trends and the maximisation of social media and sponsorship in football,” delved into the evolving landscape of the sport. Here, we highlight the key takeaways from the panel.

A new era for stadium development?

A significant trend emerging in football is the diversification of revenue streams through stadium development. Clubs are investing heavily in modernising their stadiums to generate additional income beyond matchday revenue.

Real Madrid’s renovation of the Santiago Bernabéu and FC Barcelona’s Espai Barça project are prime examples of this trend, with the former scheduled to have a retractable roof, making it suitable for concerts, exhibitions, and other events year-round. On the other hand, in addition to improving the stadium facilities, FC Barcelona are planning on increasing the stadium’s capacity to over 105,000 – making it one of the largest stadiums in Europe.

In the UK, Tottenham’s stadium is a prime example of a multi-purpose venue. In addition to hosting Premier League football matches, it regularly hosts NFL games, boxing matches, concerts, and other sporting events. The stadium also offers a variety of other revenue-generating opportunities, such as stadium tours, including those with club legends.

Boosting La Liga: a strategic investment

The Spanish league, La Liga, has taken a significant step towards boosting the financial health and competitiveness of its clubs through a groundbreaking partnership with CVC Capital Partners. The €1.9bn deal, known as Boost LaLiga, has seen funds disbursed to participating clubs in instalments, with the final instalment paid in June 2024.

While it’s still early days when assessing the full impact of this investment, the funds are expected to be used for infrastructure development, debt reduction, and other strategic initiatives. By modernizing stadiums and improving training facilities, clubs aim to enhance the overall fan experience and generate additional revenue streams.

The long-term goal of Boost LaLiga is to position Spanish clubs for greater financial stability and competitiveness in the European football landscape.

Evolving sponsor partnerships

The relationship between football clubs and sponsors has evolved considerably. Clubs are seeking innovative ways to partner with brands to enhance their recognition and generate additional revenue.

A prime example of this is Barcelona’s partnership with Spotify. This deal has seen the streaming giant become the club’s main sponsor, with their logo featuring prominently on the team’s jerseys. This partnership has also led to creative collaborations, such as the recent El Clásico match where the Barcelona jersey featured the iconic Coldplay logo. By teaming up with renowned artists like Coldplay, clubs can tap into new audiences and generate excitement among fans.

The role of digital and social media has become increasingly important in football sponsorships. Clubs and sponsors are collaborating to create engaging content on social media platforms, run digital campaigns, and utilise data analytics.

Sustainability and social responsibility have also emerged as important factors in sponsorship deals. Sponsors are increasingly seeking partnerships with clubs that share their values and commitment to sustainability. Real Betis’ “Forever Green” initiative aligns perfectly with this trend.

The club has recently released a sustainable kit in partnership with Hummel, showcasing their commitment to eco-friendly practices. By prioritizing sustainability, Real Betis is not only making a positive impact on the environment but also enhancing their brand reputation.

In recent years, there has been a shift towards shorter-term, flexible sponsorship deals. This allows clubs and sponsors to adapt to changing market conditions and maximize revenue opportunities.

The power of social media

Social media has revolutionised the football industry, impacting players, clubs, and sponsors alike.

Players:

Social media has empowered players to build their own personal brands and connect directly with fans on a global scale. This has led to increased commercial opportunities, such as endorsement deals and sponsorship contracts.

Clubs:

Enhanced fan engagement: social media platforms have allowed clubs to foster deeper connections with their fans. By sharing exclusive content, running contests, and responding to fan feedback, clubs can strengthen their bond with supporters.

Brand building and revenue generation: clubs have been able to build their brand identity -via social media, as well as reaching new audiences, and generating revenue. By creating engaging content and running targeted campaigns, clubs can attract new fans and sponsors and increase merchandise sales.

Sponsors:

Targeted marketing and increased brand visibility: sponsors can target specific demographics and interests, ensuring that their marketing efforts reach the right audience. By partnering with football clubs, sponsors can gain significant exposure to a global audience, enhancing their brand awareness and reputation.

Data-driven insights: social media platforms provide valuable data and analytics, allowing sponsors to track the performance of their campaigns and make data-driven decisions.

However, social media also presents challenges, such as managing online reputation and dealing with potential controversies. Players, clubs, and sponsors must carefully navigate the digital landscape to maximize the benefits while minimizing the risks.

In conclusion, the football industry is undergoing significant transformation, driven by factors such as stadium development, strategic partnerships, evolving sponsor relationships, and the power of social media. By understanding these trends, football stakeholders can position themselves for future success.