As sports team ownership evolved from being a pet project for high-net worth individuals or families to a true business venture, the standard business imperatives of growth, acquisition and agglomeration changed the ownership landscape. Ownership groups reorganized into sports & entertainment companies that run teams in multiple sports, teams in multiple countries, arenas and streaming services.
Three of the six largest sports conglomerates in the world as of 2019 owned at least one American sports team and one Premier League team: Kroenke Sports & Entertainment owns the LA Rams, Denver Nuggets, Colorado Rapid, Colorado Avalanche and Arsenal FC; Fenway Sports Group owns the Boston Red Sox and Liverpool FC; and the Glazer family owns the Tampa Bay Buccaneers and Manchester United.
For all their penetration and success in American and English sports, those ownership groups are still well short of the internationalization and integration of the #7 group on that list: City Football Group.
City Football Group owns professional soccer teams in the US, England, Spain, Australia, Japan, China, India and Uruguay. The teams CFG acquired outright or founded have similar branding, harkening back to the original acquisition, Manchester City. Most CFG teams have Man City’s sky blue uniforms and share the “____ City FC” construction of their name. Many have had, at some point in their CFG history, Etihad Airlines as their shirt sponsor. And many companies that started sponsoring one CFG team eventually added to their portfolio, with some becoming partners with CFG at the group level and activating across the whole conglomerate.
Nissan recently signed their third extension and expansion as a sponsor of City Football Group teams. Nissan was CFG’s first multi-team sponsor in 2014, when they came onboard with Manchester City, New York City FC and Melbourne City FC. They later added Girona FC (in Spain’s second tier), and now will be activating through Sichuan Juiniu in China’s second tier.
CFG identifies nine companies as their group-level partners. All but one of those companies sponsor at least three CFG teams. The exception is SAP, whose partnership provides enterprise solutions to CFG, having previously sponsored Manchester City and Melbourne City directly.
City Football Group alone in their scale and success
Only Red Bull comes close to CFG’s level of global sports ownership and sponsor integration across its properties, although that is a different situation for how it blurs the lines between ownership and sponsorship.
Among the American ownership groups, only one made an overt attempt to export a long-time partner. In 2014, Dunkin Donuts – a true hometown sponsor of Fenway Sports Group’s Boston Red Sox – became a sponsor of Liverpool FC. An early interaction showed the risks of using sports ownership conglomerates as part of a go-to-market strategy: access to the market turns on the acceptance of the fans. Dunkin, no stranger to rabid and passionate fans, modified the team crest as part of a product announcement on Twitter. Dunkin quickly deleted the tweet, apologized for their “insensitivity” and ended the campaign.
The deal expired with little fanfare in 2017 and, four years later, the only Dunkin in the city of Liverpool is a full 3 miles from the team’s stadium, Anfield.
Integrating local sponsorships into a global relationship
As sports ownership groups continue to expand across countries and continents, they increasingly will be a vehicle for sponsors growing into new markets.
Working through a global sports conglomerate shares many advantages of expanding any relationship across a partner’s business groups or subsidiaries. Negotiations start at an advanced and familiar stage, both sides have a mutually-supporting record to point to, and people and processes are already in place. Both parties can eliminate the inefficiencies of finding a new client. And, as a sports sponsorship, there’s a level of access to affinity that few relationships can offer.
City Football Group’s relationships with their group-level partners provide a useful model for how sponsors should execute their approach. CFG’s partners started as team sponsors, which allowed both parties to assess the value of the relationship at a smaller and familiar scale. By incrementally adding teams to their portfolio, the relationship grew from being a series of related multi-national deals to a true global partnership.
Ultimately, even at the scale of companies like Nissan and ownership conglomerates like CFG, sports sponsorships are team-centric, because the audience is team-centric. That audience could be a worldwide community of fans for a megaclub like Manchester City, or the more localized fan bases of Girona FC or New York City FC.
Growing a sponsorship portfolio team by team, instead of trying to come in at the group level, ensures the sponsor, team and ownership group stay aligned in pursuit of a successful sponsor relationship. From there, scale can follow.