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A week in America | 6 October 2023

By Martin Liptrot

By Martin Liptrot

This week Martin looks at the commercial success of one of Merseyside's top football teams through the lens of US sport. Finding brand value is more than letting the highest bidder slap a logo on your shirt, he argues...

This week was fabulous for a sport nut like me.

Thanks to technology, global broadcasts and streaming services – and some very early mornings – I saw the Ryder Cup from Italy, the Rugby World Cup from France and the opening game of the Cricket World Cup from India as well as my more familiar fare of Champions League and Premier League football.

Sport is now a global business phenomenon valued in trillions of dollars, and it seems I’m not alone in not being able to get enough of it.

From my perch here in Florida, in between the birdies, drop goals, and bouncers, I also came across an article in the Liverpool Echo commending Liverpool FC for an outstanding year. Curious?

When you consider last season was a trophy-less year for the Reds ending in failure to qualify for the Champions League for the first time since 2017, this praise came as somewhat of a surprise.

But the plaudits were for the Anfield-based commercial team led by Ben Latty rather than Jurgen Klopp and his millionaire charges.

It seems the business of being Liverpool is going from strength to strength.

The article explained that on the money side, Liverpool FC had seen revenue rise £29million to £247million, largely due to extending existing commercial contracts and inking a few new ones with global brands. The continued success of the kit-deal which gives the club 20 per cent of the sales of Liverpool/Nike branded merchandise globally on top of a flat £30m per season, also contributed heavily. And Liverpool extended its footprint adding 51 new store locations and signing 19 new international licensing deals, while e-mobile transactions increased by more than 60 per cent as Liverpool merchandise was shipped to 190 countries.

All this is, of course, swamped by a salary bill of more than £400million and consequently, even with a lucrative TV broadcast deal added in, the club only made a relatively meagre £7million in pre-tax profit.

But what was most intriguing was the insight shared by the Commercial Director about his approach to the business of being Liverpool. It aligned with a lot which I have been hearing state-side.

Over the past two or three years, I have attended and participated in numerous conferences, podcasts, workshops and meetings about the ‘business of sport’. Here in the U.S., you don’t need to apologise for, or be ashamed of, the pursuit of making a profit.

Sitting in meetings in New York, LA and Miami, surrounded by these titans of sport, on more than one occasion it struck me how far behind English sport appeared.  

While there are many brilliant minds at work constructing broadcast deals, rights issues, and exploiting new audience engagement – and noting that many of the big sports agencies, broadcasters and tech disrupters here have Brits at the helm – English football’s commercial wing seemed stuck in a dialogue about sponsorship and naming rights, sticking brands on their shirts, and flogging replicas.

In contrast, Liverpool’s Latty spoke of his approach to the commercial side as ‘an evolution of our business model.’ and what The Echo described as the club’s ‘ability to create something that goes beyond a simple financial transaction and marketing tie up.”

While using naming rights and sponsorship to pitch and tilt for money is a well-trodden and traditional path, the more contemporary commercial teams in sport are looking for more. One London-based expert decried the label ‘sponsorship’ to me as ‘one dimensional’ and ‘missing real opportunities to build value’.

It may just appear to be language or nuance, but it defines the challenge and opportunity.

Brand building is, and always has been, much more than slapping your logo on everything available.

In sport this is especially true. Our relationship with our clubs is emotional, more than just backing the winners, it prevails through good times and bad.

And that takes some explaining.

I was part of frequent conversations with agencies and partners of the Saudi Pro League about how important the selection of commercial partners was. For the fledgling league and the nation it is a proxy for, I argued the choice of who they partnered with was of the utmost-importance – the highest bidder wasn’t always the ‘best fit’ – especially for a nation with already limitless wealth.

For U.S. and global sports brands, the partners they have now bring more than just monetary value. Latty’s Liverpool agree.

Latty spoke of the need to find partners who understood and aligned with his Red Way strategy and sustainability goals and, ultimately, shared a commitment to building a better future for the people, planet and communities served.

The key concept for brand managers, in sport and beyond, is those shared values. Not just that alignment with the things we all agree are important – fairness, equality, environmental protection – but a willingness to take a stance, do something which connects with your loyal and faithful supporters and consumers.

That doesn’t mean greenwashing your brand by being a billboard exclusively for charities and third sector campaigns, it also means finding the businesses and organisations who are active in addressing the issues too.

It is also good business – cementing existing fan relationships and attracting those who are at the start of their ‘marketing funnel’ journey – exploring and looking for signs about who to choose for their brand loyalties.

Look at Taylor Swift. This woman is unstoppable. She merged the niche of country music with pop, is adored by multi-generations, and fills stadiums from Tokyo to Toronto.

She is now dating a US football player with the Kansas City Chiefs. I’d never heard of him before, he was overshadowed by their star quarterback, but he has risen to prominence by carefully folding Taylor into his brand story. With her appearance at games – she was seen in the stands at New York Jets MetLife Stadium on Sunday sporting a Chief’s hat – the mid-west franchise now sees itself being the preferred Football team for hordes of teenage girls worldwide – a market segment they probably struggled to connect with previously.

As a sign of that alignment, the club released a replica version of its shirt with SWIFT and her lucky number 13 on, and already it is their best-selling jersey of all time.

But that didn’t happen by accident. Swift and her team are massively protective of her brand and reputation, they choose who they do and don’t partner with as carefully as she picks her beau.

Her brand and the values it stands for are as carefully curated as any multinational business – Apple, Google, Coke or Tesla.

A brand with the reach and prominence of Liverpool FC; a storied heritage, a personality which stands out, a fan base stretched from continent to continent, is an attractive proposition to any prospective partner who wants to build their brand. So picking the right partners is paramount.

Shared values also lead to sharing brand values. If an international bank wants to issue Liverpool FC credit cards with the famous crest on them, it better hadn’t be one involved in predatory lending, discrimination against racial or gender groups, or funding causes the club would find ‘challenging’.

If these brand activations and extensions are going to work for both the partners they need to be carefully created, organised and managed. It involves extensive research and conversation, it includes engaging stakeholder groups, fan organisations and existing partners.

Since Liverpool was acquired from the previous regime for around $300 million it has grown to a net worth today of more than $4 billion. In part this success is because of the wise investment in football talent, but also because of the canny business acumen of their U.S. owners Fenway Sports and the brand awareness of the commercial team in Anfield.

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Martin Liptrot

Martin Liptrot is a Public Affairs, PR and Marketing consultant working with UK, US and Global clients to try and ‘make good ideas happen’.

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