HomeSponsorship & MarketingFootballUnited Kingdom

Coca-Cola buys global Premier League rights to push multiple brands in the UK

Coca-Cola GB’s three-and-a-half-year deal with the Premier League is the largest sponsorship deal the UK branch of the company has ever signed and the first it will activate across its entire portfolio. Ben Cronin examines why the brand is partnering with the league and what it means for the Premier League’s multi-sponsor approach.

  • Three-and-a-half-year deal starts in January
  • IP-based deal will allow company to promote low-sugar drink variants 
  • Deal fills final slot in sponsorship inventory but several deals expire next summer

At first glance, Coca-Cola’s deal to become the seventh and final partner in the English Premier League’s global sponsorship roster looked to be all about international promotion and reach. On the one hand there was the Premier League: a truly global sports property, broadcast to an estimated one billion homes in 189 countries; on the other hand, Coca-Cola: an internationally-recognised drinks brand operating in 206 territories and with the marketing resources to match.

Yet look a little closer and the partnership reveals itself, at least initially, to be a lot more local in outlook. The three-and-a-half-year agreement, estimated to be worth £10m ($13m) a season, has been led and contracted by Coca-Cola Great Britain rather than the company’s head office in Atlanta, and although it effectively grants the UK arm of the drinks brand the international rights to the Premier League, its priority is to activate in the UK.

“The partnership is a global partnership, so we have global rights,” Jon Woods, general manager of Coca-Cola Great Britain and Ireland tells SportBusiness Professional. “I would anticipate that as they are global rights, we will find some ways to develop that partnership around the world, but we’ve made the partnership happen for our business here in the UK.”

The company plans to use the sponsorship deal, which commences in January 2019, to promote a range of drinks including sparkling soft drinks, water and fruit-based drinks, with low and no-sugar options – the first time Coca-Cola Great Britain has activated a sponsorship across multiple products and not focused exclusively on its Coke brand. Woods says it is the biggest sponsorship deal the UK arm of the company has ever signed and that it will become the centrepiece of its marketing strategy.

Coca-Cola is one of the most active brands in football, with 63 deals across the 10 largest European football leagues and global sponsorship deals with the Uefa European Championships and the Fifa men’s and women’s World Cups, but Coca-Cola Great Britain has lacked a club football asset that it could activate more regularly in the UK since it ended a six-year partnership with the English Football League (EFL) in 2010 to focus on its sponsorship of the London 2012 Olympics.

“I think what the partnership with the Premier League gives us is that it is always on, says Woods. “There’s always something happening.

“Football is one of those very unique sports that brings people together on a social occasion, it brings them together at home, it brings them together in pubs, it’s super sociable and that social interaction is the heart of the soft drinks business.”

Multi-sponsor model

The deal is essentially built around the Premier League’s IP after the league moved away from a title-sponsor-led sponsorship approach to a multi-sponsor model.

“It’s access to player imagery, to match footage; to Premier League marks; and to the trophy as well,” says Richard Masters, managing director of the Premier League, of the assets that Coca-Cola will be able to activate under the agreement. These, he says, are largely similar to those available to the other six brands in the Premier League portfolio. The use of player imagery, for instance, is determined by established principles which stipulate that four players from four different clubs have to be involved, and player appearances should be rotated to ensure a mix of clubs and players.

Woods says Coca-Cola’s market research reveals that the Premier League is a strong passion point for its UK customers and it hopes to use the Premier League deal to provide them with greater levels of access to the league. The plan is for Coca-Cola and its bottle partners to use the league’s IP and imagery in point-of-sale promotions to introduce new brands or to encourage customers to consider its low-sugar options.

Jon Woods, general manager, Coca-Cola GB

Although the brand has yet to plan all of the ways it will activate the partnership, Woods says it will look to enhance the fan experience through physical and digital activations, including a nationwide Premier League trophy tour – a strategy Coca-Cola has previously used to activate its Fifa World Cup sponsorship rights. The latter campaign used the trophy tours to reward football coaches, promote activity and engage with grassroots football, and the new partnership is likely to take a similar approach. Unlike Coke’s deal with Fifa, however, the trophy tour rights with the Premier League are for the UK only.

“I think the idea is we will use the partnership to give fans more access to football with behind-the-scenes coverage, tickets, merchandise and then the trophy tour, which we are very familiar with because of our relationship with Fifa,” says Woods.

Tantalizingly, a joint press release said the two parties were also “working to promote sustainability and recycling and will use the partnership to work together to continue this”, although further details will not be announced until 2019.

Coca-Cola has come under fire for not doing more to tackle plastic pollution, but recently joined companies like Proctor & Gamble, Unilever and Nestle in signing a pact to reduce waste and increase recycling. Any activation that uses its Premier League sponsorship for a social purpose would align itself with the league’s own efforts to boost its own CSR (corporate social responsibility) credentials, now that it has the freedom to develop its brand unhindered by a title sponsorship. Writing a blog for Synergy Global in 2017, SportBusiness Professional columnist Tim Crow said: “If you ask people what [the Premier League] stands for other than football, the majority will say money, truckloads of money – and not in a good way. People don’t believe that the Premier League has a purpose beyond profit – the essential ingredient for the most successful contemporary consumer brands.”

The league has sought to address this with the launch of the Primary Stars schools programme, which teaches life skills and offers PE, maths and English resources to schoolchildren. It also partnered with Sky in April to promote the Sky Ocean Rescue Campaign to reduce single-use plastics. There is a possibility Coca-Cola could use these programmes to amplify its own CSR messages although recycling is not thought to be central to the campaign.

“I’d be very surprised if Coca-Cola didn’t do something which wasn’t what you might call grassroots-related, whether it’s getting people active or using the Premier League in some way for a social purpose. It’s pretty much ingrained into anything that it does worldwide,” says Crow, who worked with Coca-Cola Great Britain when it partnered with the EFL in 2004, and correctly predicted the latest sponsorship deal in a column for SportBusiness in April.

That Coca-Cola is hoping to incorporate a CSR element and market low-sugar brands and water through the partnership will help the league to contend with the inevitable criticisms for partnering with a manufacturer that is synonymous with sugary and fizzy drinks. Coca-Cola takes its place alongside chocolate brand Cadbury and beer brand Carling on the Premier League’s roster, hardly the healthiest messages for a league to promote. One sponsorship expert said the deal was a risk worth taking, given that the Premier League would not be the only rights-holder to take money from confectionery and soft drink partners.

Cadbury

If Coca-Cola is looking for an example of a successful point-of-sale Premier League promotion, it need look no further than the way Cadbury activated its three-season partnership with the Premier League which started in the 2017-18 season. The league’s official snack partner launched a national on-pack promotion called ‘Match & Win’ across the entire range of Cadbury chocolate bars, offering consumers the chance to win Premier League tickets. The campaign was so successful, it resulted in a 49-per-cent growth in sales and reversed a decline in the chocolate category.

“That’s one that stands out,” is Woods’ response when he is asked if the Cadbury deal persuaded him of the value of Premier League rights. “I heard they quoted it in their annual results at one point, [but] I think we were super-interested in the Premier League anyway, regardless of what we’ve seen other people do.”

Vindication

Woods adds that the way the Premier League sponsorship rights are structured ‘really works’ for Coca-Cola and makes them ‘very easy to activate’. The fact that the deal fills the seventh and final slot in the Premier League’s sponsorship inventory also appears to vindicate the decision the league took to adopt its multi-partner approach after Barclays’ title sponsorship of the league came to a close at the end of the 2015-2016 season.

“I think the move away from title sponsorship and the value it’s brought to us as an organisation in terms of marketing and communications and also the commercial return – both in terms of direct revenue via our partnerships and also the added opportunities it has handed back to clubs – has been a significant net positive,” says Masters.

Premier League central sponsorship revenues have not been adversely impacted by the move. For the 2015-16 season, the last season of the bank’s £40m-a-season title partnership, combined Premier League central sponsorship revenues stood at roughly £75m per season. In the 2016-17 season, they stayed flat at around the same figure, as the loss of the £40m a season the bank paid for the title sponsorship was offset by the £10m a season it paid to move across into the league’s official bank designation. This was combined with a new partnership with Tag Heuer (to become the league’s official timekeeping partner) and an uplift in renewals with EA Sports, Carling and Topps.

In the 2018-19 season, central sponsorship revenues rose to £83m thanks to a three-season deal with Cadbury worth £8m a season. The £10m Coca-Cola deal will take central sponsorship revenues to roughly £93m a season and central commercial revenues – the figure combining sponsorship, licensing, radio rights and a share of FA and EFL cup sponsorship revenues that the Premier League publishes in its annual payments to clubs – to around £106.77m (see 2017-18 payments to clubs).

Dispensing with the title sponsor model has freed the Premier League to develop its own brand and IP and has encouraged more partners to sign which might have originally been dissuaded by the prospect of having to put a title partner like Barclays into their communications. It has also handed a share of sponsorship inventory back to clubs. Although the league still requires some of its own branding to appear on perimeter boards during matches, it has reduced this requirement now that Barclays is no longer involved, freeing clubs to sell this inventory themselves. Similarly, it has enabled the league to lift restrictions on clubs signing financial partners of their own.

Central sponsorship revenues increasingly represent just a small share of club revenues when compared with the central TV revenues the Premier League distributes among its 20 teams. Last season, TV payments to clubs were worth between £90m for the lowest earner and £145m for the highest, while the £40m Barclays deal was worth just £2m per season per club when split 20 ways.

“As time goes on and TV revenues increase, that title sponsorship as a percentage of global revenue goes down and down until the point where you look at that and you say, well even if it’s £50m or £60m is that really a lot of money when we divide it up among the clubs?” says Misha Sher, worldwide president, sport and entertainment, MediaCom.

“Manchester United can sell that inventory for a lot more,” he says of the pitch-side assets the Premier League has handed back to clubs. “For example, if you have a minute or two minutes of their LED time, it’s quite a substantial amount of money. They will certainly be able to include that in their sponsorship proposals to either upsell or to sell to a new partner because it’s such a premium inventory that clubs have, particularly the clubs in the top half of the table.”

The other appeal of the multi-sponsor approach is that it gives the Premier League the opportunity to cultivate IP-based relationships with brands that aren’t interested in sponsoring individual teams.

“The problem with picking off one team is you alienate the fans of rival clubs, so really in this market Coca-Cola’s approach has always been to sponsor leagues and tournaments rather than sponsor specific clubs,” says Crow.

Woods says Coca-Cola already has pouring rights with 19 out of 20 Premier League teams (the exception is Leicester City) and the Coke brand already enjoys extremely high brand awareness across the UK, another reason why it isn’t in the market for a single-club sponsorship.

“I think this is the best way for us to be involved in football nationally,” he says. “The biggest brand in the portfolio is very well-known; it’s not about awareness for that brand, which may be a reason to get involved with individual clubs. But that’s not the right way for us to do our business; I think the Premier League is the correct way for us to do our business.”

The Premier League may have filled the final slot in its sponsorship roster, but this will only be the case until the end of the current season (2018-19). The league operates in three-season sponsorship cycles and the three-and-a-half-year Coca-Cola deal has been designed to span the remainder of this cycle (2016-17 to 2018-19) and the full three seasons in the next cycle (2019-20 to 2021-22). Next summer, the Premier League’s deals with EA Sports, Barclays, Carling and Nike will expire. Aside from Coca-Cola, watch brand Tag Heuer is the only other sponsor tied into the next cycle, having renewed in August this year. The Cadbury deal expires in the 2019-20 season and is out of kilter with the three-season cycle.

“There’s obviously some work that needs to be done for the next commercial term and we’re hoping to make some more announcements between now and Christmas,” says Masters.

Contrary to some rumours, Woods and Masters say the timing of the announcement of the Coca-Cola deal (September 13) had nothing to do with the start of the school year and that the January start date is simply the earliest date in the calendar the two parties can start to activate.

“I don’t think back-to-school would have an impact on what we would do,” says Woods. “I think the timing just works for us because of when we started talking. It was too late to make it happen when the season started, but we didn’t want to wait another year.”

Most recent

USTA chief executive Michael Dowse tells SportBusiness how, despite facing multiple unprecedented issues and sharp ratings declines, the organization was able to bring back elite tennis and make a small profit with the US Open. Bob Williams reports

SportBusiness gathered a panel of experts at the All That Matters Online 2020 conference to discuss the challenges being faced in the sports media rights sector.

An upstart daily fantasy company with an unusual name and unconventional approach has quickly risen to prominence by challenging established market leaders DraftKings and FanDuel and striking a large series of team sponsorships.

ESPN is putting on major marketing effort to promote its new media-rights deal with German top flight league while also focusing on wider long-term content initiatives. Bob Williams reports