The cyclical nature of betting sponsorships

While the Neymar signing has grabbed all the headlines, it’s been another busy summer in the football sponsorship world with gaming companies making a plethora of their own signings. More than £45m has been spent by the gambling sector in the Premier League so far, with a total of nine Premier League clubs now featuring betting and gaming companies on their jerseys. Other clubs all have significant official betting partnership deals too; the only Premier League exception now is Tony Bloom’s Brighton.

Demand has been such that even when sponsoring the front of a shirt of a Premier League club, you are no longer guaranteed product category exclusivity. This simply would not happen in any other sector.

My feeling this summer was that the market was due a correction. Asking prices were too punchy and the clubs had overestimated demand from an industry that demands ROI from its marketing spend. Brands that had overpaid in the past were wiser, and how many new entrants could afford to pay such inflated asking prices?

Then, as seems to be the case every year, a batch of new entrants entered the market. Letou kicked things off by closing a deal with Swansea. Crystal Palace then secured a massive deal with ManBetX, and this was closely followed by Huddersfield landing OPEBet. Although I was familiar with Mayfair’s Letou brand, OPEBet and ManBetX were new to me.

Global appeal

The reason betting companies have been so active in this space is clear. In many parts of the world people watch the Premier League solely to punt – and they have zero emotional attachment to any of the teams. It’s actually quite similar to how people in the UK watch horseracing.

The Premier League is a genuinely global sponsorship platform that delivers more eyeballs on a consistent, almost year-round, basis than any other sponsorship opportunity. And the availability of live televised football around the globe has grown in tandem with the global popularity of in-play betting. There can be no doubt that it’s a great vehicle in which to grow your sports betting brand globally. It works particularly well for those with a ‘spread the net far and wide’ grey market strategy.

Despite these clear benefits, the saturation surely dilutes the value of Premier League deals. This, coupled with rapidly increasing prices, means that brands must be starting to ask themselves if their marketing spend is better spent elsewhere. If we assume football is the most important sport for sports betting operators (and it is), the Bundesliga and La Liga have proved to be credible alternatives.

Perhaps more regulatory certainty in Germany and less regulatory obstacles in Spain would mean even more deals in those territories. Meanwhile, the Championship is also attracting a lot more sponsorship spend – but this must be considered a UK-only play.

Jim Foxcroft, who is widely credited for introducing the perimeter advertising board concept to the UK market, told me many moons ago he felt that a product category dominating the space was cyclical. This means new product categories enter the market when they are trying to establish themselves as the biggest and the best in their field. Remember when electronic firms such as JVC and Hitachi were battling it out? What about the beer brands after that?

Each sector would usually dominate for three to four years, but 13 years later betting and gaming continues to dominate. Perhaps next summer will be the time when we see a correction. Or perhaps we will see yet more new entrants, and by then the Neymar deal will look like good value.

Previously heading up 12BET’s European business, Rory Anderson now works as a consultant for the 12BET group. His previous roles included senior marketing positions at 888.com, Empire Online and PartyGaming.