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Sponsorship Strategy: Emirates Airline

The Emirates airline has continued its big spending on football shirt sponsorships signing deals in 2013 with Spanish Liga club Real Madrid, French Ligue 1 side Paris Saint-Germain, and US club New York Cosmos, with a combined value of around €60m ($80m) per season.

Boutros Boutros, the company’s divisional senior vice president of corporate communications, told SportBusiness that the investment is based on a belief that football, particularly football shirt sponsorships, is the most effective platform for the company. He also revealed a desire to be the number one airline in sports sponsorship.

Sports sponsorship accounts for 35 per cent of the company’s marketing budget, with the majority of this spent on football. Emirates aims to earn $8m for every $1m it spends on sponsorship, Boutros said. The remainder of the marketing budget is split roughly equally between (1) advertising, and (2) events, exhibitions and digital technology.

Shirt sponsorship “is the most relevant sponsorship,” he said. “If you don’t have the shirt you only have advertising boards and that’s not for us. We like the shirt because it’s connected to people.

“If you look at all our sponsorship deals they are not just for awareness, they are to get us closer to the public and to potential customers. We strongly believe that sport gets you closer to fans, and football is the number one sport in the world.

“We like to give customers a unique flying experience and we want to be the airline of the sports industry. No other airline has the amount or quality of sponsorships that we have.”

The profile and exposure that comes with shirt sponsorship deals also means the company needs to spend less on activation, Boutros said.

Big five leagues

Emirates is now a shirt sponsor of a team in each of the top five European football leagues. It also sponsors: English Premier League side Arsenal, and has naming rights to the club’s stadium; Italian Serie A team AC Milan; and German Bundesliga side Hamburger SV.

“First, we go to countries where we have frequent flights – England, Germany, France and Italy,” said Boutros. “We agree sponsorships in places where we have big frequencies and big potential for growth, and we aim for deals which give us nationwide coverage.

“Look at the teams we have selected – teams like Real Madrid have global supporters. We choose teams which cover the whole world. When we looked at [potential sponsorship deals in] Brazil and Argentina, the awareness of Emirates was high and it was the number one airline in these places because of our soccer sponsorships. It works very well for us and prepares us for going to new markets and for existing market propositions.”

The celebrity profiles of Real Madrid and PSG players increases the value of the sponsorships for Emirates. “PSG has more than 20 top players – some of these players are in the news as they are social figures, they are followed on social media as people are interested in them,” Boutros said. “This gives the brand increased social exposure as it’s not just sports fans who will see the shirt.

“People also love to follow the players at Real Madrid – they follow their news and their private lives. It’s important to have that association with the human element.”

It is understood that that Emirates is not looking to add new sponsorship deals in the near future. Longer-term, it may do deals in the world’s major developing economies.“We are continuously looking at markets like China and India – when we find something we will do it, but you can only go on what is available,” Boutros said.

“These are tough markets. Good sponsorship opportunities are very expensive. I can’t justify spending huge amounts of money on the IPL [cricket’s Indian Premier League] for example, which can be up to $10m for just 21 days. A lot of companies pay this amount of money, but I don’t think it justifies the investment.”

Anatomy of the Real Madrid deal

Emirates’ shirt sponsorship deal with Real Madrid is worth about €27m per season up front, with an additional €6m available each season depending on the side’s success, making the deal worth up to €33m per season. The deal is for five years, from 2013-14 to 2017-18.

Emirates has been a sponsor of Real Madrid since 2011, initially acting as an Official Partner in a deal worth about €4m per season.

The Fly Emirates logo will replace that of online gambling company Bwin on the front of Real Madrid’s playing and training kits from 2013-14. Bwin is thought to have been paying around €23m per season in its shirt sponsorship deal which ended after 2012-13.

Emirates’ agreement also contains hospitality rights, including a branded VIP lounge at the club’s Santiago Bernabéu stadium, player access and other advertising rights.

According to Boutros, the Real Madrid sponsorship is equally important outside Spain as within it. “We are new in Spain, we have just started to fly there, but a lot of viewers in the Middle East watch the Spanish league. Although the Real Madrid sponsorship is obviously important in Spain, it is also important globally. It is probably a 50:50 split.”

Emirates’ involvement with Real Madrid was not prompted by rival airline Qatar Airways becoming shirt sponsor of rival club FC Barcelona, Boutros said.

“We were in negotiations with Real Madrid before Barcelona announced the deal with Qatar Airways. We have a solid strategy and vision – it doesn’t matter about our competitors. We want properties which give us superiority and exclusivity.

“Qatar Airways is a competitor but we are competing with lots of other airlines when it comes to public perception – there is Etihad too. We compete with them but we also have a good relationship with them all.”

Anatomy of the PSG deal

The agreement with PSG is a five-year extension, from 2014-15 to 2018-19, potentially worth up to €25m per year. PSG are guaranteed about €20m per season, with the remainder depending on the club’s success. Some value-in-kind is also included – PSG players and club staff will be allowed complimentary air travel to destinations outside France.

This represents a potential increase of up to 426 per cent on the current five-year agreement, from 2009-10 to 2013-14, which was worth about €4.75m per season. The fee increase is due to the turnaround in the club’s on-pitch fortunes following its takeover by Qatar Sports Investments, and to a change in selling strategy.

Emirates first signed as a sponsor of the French side in 2005. It agreed a three-year shirt sponsorship deal from 2006-07 to 2008-09 worth around €3.5m per season.

Under the latest deal, the Fly Emirates logo will continue to be displayed on the front of players’ shirts. Emirates will also get branding around the Parc des Princes stadium on LED screens, on advertising boards and on panels at stadium entrances and exits. In a new element, from next season Emirates will have the naming rights to a VIP lounge.

The deal was agreed directly between PSG and Emirates, and the club did not speak to any other potential sponsors.

“Renewing with PSG was a natural decision as they are doing very well – it was a no-brainer,” Boutros said. “If the club doesn’t win the French league, they will come second. The publicity that comes with the club is great.

“You can only see a way up for PSG because of their ownership, their future plans and their commitment to buying good players – and their popularity is growing. The more you are involved in a club the more you become popular, and we are becoming bigger in France. At the start of our sponsorship we had just one daily flight, but now we have three.”

New York Cosmos deal

Emirates has also agreed a three-year deal, from 2013-14 to 2015-16, to sponsor North American Soccer League side the New York Cosmos. The deal is worth about $1.5m per season, and includes an option to extend the contract.

Emirates will receive similar branding to its deals with PSG and Real Madrid – the Cosmos shirt will carry the Fly Emirates logo, and the company will have in-stadium branding and hospitality benefits.

Cosmos began playing in 1971, but folded in 1984 with the closure of the previous incarnation of the NASL. The club attracted top players at the time such as Brazilian forward Pelé, German defender Franz Beckenbauer and Italian striker Giorgio Chinaglia, who became the club’s all-time top scorer.

Cosmos is being relaunched in the second half of 2013 by Seamus O’Brien, founder and chairman of sports marketing company World Sport Group, and Saudi Arabian sports marketing company Sela Sport. The club will play in the NASL, the second-tier professional league in the US reformed in 2011.

“New York Cosmos is a very well-known club although it’s just come back,” said Boutros. “You have to share people’s passion – people will all remember Cosmos and they will remember our name too.

“It hasn’t achieved anything under the new ownership yet, but we will be seen. If we share our success with them, when the team starts growing people will not forget what we did.

“It’s again about our main philosophy of getting closer to people. In the US, although soccer can’t compete with the NBA or American football, New York has a huge mix of nationalities and a lot of football fans.”

Other sponsorships

As well as its football shirt sponsorships, Emirates also sponsors Fifa, football’s global governing body, and the Asian Football Confederation, football’s Asian governing body. Emirates’ eight-year agreement with Fifa, from 2007 to 2014, is worth $195m, or $24.4m per year.

Sponsoring Fifa and the football World Cup, which Fifa runs, gives the company “continuity and presence in the soccer world,” Boutros said. The World Cup also has the advantage of taking place during the off-season of the football clubs that Emirates sponsors.

The four-year AFC deal, from 2013 to 2016, is worth $16m, or $4m per year. Emirates has sponsorship rights to all the confederation’s tournaments, including the AFC Champions League, AFC Cup and AFC Challenge Cup. The sponsorship allows the Emirates brand to reach a large swathe of the Asian population, Boutros said.

“We can’t go to each country in Asia and pick one sponsorship in each. Our sponsorship of the AFC covers all of Asia for us, and is probably the only property which covers every Asian country. There are more than 100 televised games per year, and this pays off very well in areas where people can’t follow the European leagues because of time differences.”

Emirates is believed to be keen to renew the AFC deal when the current one ends in 2016. The company’s other stand-out sponsorship deals are with: Greek Super League football side Olympiacos; the International Cricket Council, cricket’s global governing body; motorsport’s Formula One; and two grand slam tennis tournaments – the US Open and the French Open at Roland Garros.

“With our sponsorships we have coverage across the whole world,” Boutros said. “We have a good mix with our sport sponsorships as we target almost everybody on the globe."

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