The Next Signing for Transformation in Football – Investing in Data

The backdrop

Football is constantly evolving. From record growth and viewership in the women’s game, to a global pandemic and the impending introduction of an independent regulator and minimum fan engagement standards for the Premier League, football organisations must be dynamic. But it’s not just the Premier League, UEFA are considering supplementary requirements to existing financial regulations for clubs in UEFA competitions which includes the prospect of an absolute cap in respect of a club’s spending on players.

We are also seeing a fundamental shift in the way sport is being consumed by the next generation of fans, a heightened focus on diversity, equity & inclusion across the industry and an increasing precedent where sport organisations are expected to compete as entertainment and media companies.

The impact

This cumulative change, spearheaded by COVID-19, exposed an overreliance on broadcast and matchday revenues across the industry. During the 2019/20 season, Premier League matchday and broadcast revenues fell by 12% and 23%, respectively. As a result, total revenues dropped by 13% to £4.2bn, from a record high figure of £5.2bn in 2018/19. This placed club-controlled commercial revenue streams, such as merchandising and club sponsorships in the spotlight like never before.

In 2023, the top five highest revenue generating clubs in the Deloitte Football Money League reported a combined £1.7bn in commercial revenue - almost five times more than those placed 16th - 20th. As the world’s largest clubs entrench their position as commercial powerhouses, smaller clubs will also need to seek new ways to diversify revenue streams and appeal to the next generation of fan.

The solution

Data is becoming an increasingly strategic asset, and you don’t need to top the Deloitte Football Money League to activate it. In 2022, Greek club PAOK FC generated a hyper-targeted marketing campaign tailored to their fanbase offering t-shirts of one their star players – Jasmin Kurtic (“the sniper”) following his 95th minute equaliser. E-store sales went up 91% from the day prior, and the campaign performed 66% better than any the club had previously created.

What’s the secret? Truly understanding and having control of your data. To effectively drive business and commercial insights through data, you need capability, speed of access and control. This typically means having an in-house team managing your own data platforms who not only understand your data, but also your business and crucially – your fans.

But it’s not just about selling more t-shirts, there are financial consequences at stake. Sponsors are increasingly looking for a value exchange, and metrics such as total number of fans, and corresponding demographic won’t suffice – particularly if these don’t paint the full picture. Ahead of the 2022-23 season, Spotify agreed a shirt and stadium sponsorship deal with FC Barcelona rumoured to be worth c.€280m. Whilst the deal appears significant, and still is when considering the c. €15m annual uplift compared to the previous deal with Rakuten – it is rumoured Spotify were prepared to pay even more if a greater share of the alleged 350 million-strong fan base could be reached. It is believed that only 1% of the fan base were actually “registered” and consented to the sharing of their personal information. This drastically limited the true “reach” of the club, impacted the perceived value received by Spotify, and ultimately is believed to have reduced the deal price.

Getting to the end-goal need not seem daunting – the data lifecycle feeds itself. Once you have a clear strategy in place, the capture, analysis and action (informed by data) leads to the capture of more data. Put simply, high-quality data leads to the generation of better, more meaningful insights. Better insights lead to improved business and commercial decisions. Improved decisions open up new opportunities - both on and off the pitch.

What’s next?

Premier League regulation

The impending introduction of an independent regulator and minimum fan engagement standards for the Premier League underlines the importance of controlling your data. Whilst the impact of an independent regulator is not yet fully known, the requirements placed on Premier League clubs to meet the new fan engagement standards are. From next season, clubs will be required to meet minimum standards around how they Listen, Collaborate, Share and Learn from fans and their approach to engaging them. To do this effectively, clubs will need to utilise data to understand who their fans are, what matters most to them, how to engage them and how to utilise data to drive more effective fan engagement.

Competition for sponsors

Earlier this year, Premier League football clubs collectively agreed to withdraw gambling sponsors from the front of matchday shirts. Whilst existing contracts are permitted to run their course, and the collective agreement will not come into effect until the 2025-26 season, nearly half of Premier League clubs and a quarter of Championship clubs will be looking for new sponsors. Clubs that can demonstrate their value and reach, backed by data, will be best placed to fill the gap left by gambling sponsors and attract meaningful, value aligned partnerships.

Women’s football

The rise of women’s football provides an unprecedented opportunity for clubs and leagues to use data to engage, retain and grow their fanbase from the ground-up, away from the complexity of the men’s game.

Taking a data first approach can help drive enhanced commercial returns and identify new revenue streams.

This article was originally published in the 2023 Deloitte Annual Review of Football Finance, available to download here.