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Arsenal’s Singapore office contributes to 50-per-cent growth of commercial revenues

  • APAC contains biggest proportion of Arsenal’s global fanbase at 30 per cent.
  • Since opening Singapore office, 85 per cent of all club’s sponsorships now come from outside Europe.
  • Club looks to offer ‘one-stop shop’ for Asian brands breaking out of domestic markets.

When Arsenal opened its Singapore office in 2014, it became – after Manchester United and Chelsea – the third English football club to put permanent boots on the ground in the Asia-Pacific region.

At that time, the vast majority of the club’s sponsors came from Europe, if not the UK; now, 85 per cent of the club’s portfolio is international. Commercial revenues rose from $99m in 2014 to $150m (€132m) in 2017; about 10 per cent of this is earned from five deals with Asia-Pacific brands – 12Bet, BYD, BNN Technology, Cover-More and Konami. All of these have been negotiated, at least in part, from the Singapore office.

“We have a strong brand recognition everywhere, not just in the UK and Europe,” says Hadrien Perazzini, director, APAC at the club. But back in 2013, when the club began to investigate why its commercial returns were lagging behind rivals such as Liverpool and Chelsea, the conclusion was that Arsenal “wasn’t doing enough with that recognition. We understood very quickly that we needed to invest time and resources in the long-term to make this engagement and reach grow, and to utilise it to maximise revenues”.

International sponsorships have become a key focus for Arsenal over the course of the last decade, with the club identifying them as their “biggest revenue growth opportunity” – especially since their move to the Emirates Stadium in 2006.

“Like every football club, we’re generating revenue from the stadium, from media rights, and from our commercial operations,” he explains. “We’re very fortunate that we’ve basically had a sold-out stadium for the last ten years for every single game. That’s great, but it means it’s really a saturated growth area for us. That’s why partnerships, and particularly international partnerships, are such a priority for the club.”

According to Arsenal’s official numbers, APAC accounts for a higher proportion – almost 30 per cent – of the club’s total global fanbase than any other region. They have more social media followers in Indonesia than they do in the UK – “which might sound surprising”, says Perazzini, “but it just shows the reality of the size of the fanbase out here, and their level of engagement. We’re out here now trying to capitalise on that engagement”.

While some activities around fan engagement and retail take place out of the Singapore office, it is predominantly a commercial operation. Under the stewardship of Stan Kroenke, the American businessman who assumed full control of Arsenal this year, the club has adopted a business model of self-sustainability. The club must survive off its own revenues, without turning to Kroenke or, prior to this year, former co-owner Alisher Usmanov, for funding. Perazzini admits there is pressure on the commercial team, in both London and Singapore, to help to fulfil those goals.

Tailored Asian strategy

Arsenal has signed regional deals in Asia through its Singapore office, but Perazzini says that this is not the primary purpose of the base, with he and his team mainly looking to global partnerships. This, he notes, differs from the club’s strategy in Africa, where regional, country-specific deals are deliberately sought. Until this year, Arsenal held concurrent beer partners in Nigeria (Star Lager) and Ethiopia (Dashen Brewery), for instance.

“Because of the growth that lots of Asia is experiencing at the moment, there are more companies looking to take that next big step out of their domestic marketplace,” says Perazzini. “On the whole, African brands want a partnership to boost their reach in their home market. We have bigger partnerships there – such as the Visit Rwanda sleeve sponsorship – but they’re generally smaller.

Arsenal held a fan event to engage with Singaporeans during the team’s summer tour

“On the other hand, we’re seeing a lot of companies in Asia that are extremely successful in their domestic market but, because of the level of competition and complexities of the marketplace, it can be challenging for them to differentiate themselves.”

Arsenal has adapted its strategy in Asia to take advantage of this, offering brands a way of standing out. Because of the way football “bridges cultures and languages”, something as simple as using an Arsenal logo on an activation can help a Chinese brand like electric car manufacturer BYD, with whom Arsenal signed a major partnership earlier this year, gain traction in other territories, says Perazzini.

This is something he expects to gather pace as “those traditional unicorns in their domestic markets increasingly find they’ve maximised growth in their own markets then need to look for that international expansion to keep growing”, he adds. The challenge for Arsenal is to continue to provide a marketing platform that is distinct from their Premier League rivals, themselves similarly looking to international growth to counter saturated domestic markets.

Perazzini expects the Singapore office to continue to demonstrate its value in this regard, “especially in this part of the world, you need a lot of face time, you need to build those relationships, and you can’t do that better than actually having an office out here”, he says. Arsenal, Chelsea and Manchester United remain the only Premier League clubs to have established permanent physical presences in Asia.

Breaking down the marketplace

That strategy has meant Arsenal trying to do more with its primary assets in Asia, and focusing on working with brands “that are willing to create a partnership and not a sponsorship”, says Perazzini. “We need to be able to create something that will deliver value and engagement with our fans just as much as all the more traditional assets that we’re able to deliver.”

To work out how best to deploy its assets with each partner, the club looked at the Asian marketplace and divided the brands there into three categories based on their goals.

“On the one hand, you have a brand that is based in APAC that wants to engage with its domestic markets in a meaningful way, in a different way,” says Perazzini. 12Bet, Arsenal’s Asian betting sponsor, fits in here: the club has other betting partners for South and Central America, the Caribbean, Europe, and Africa, each of which activates on a regional basis, using Arsenal branding and marques in locally relevant ways.

“Then we have brands who are based outside APAC that want to engage with this huge consumer base in the region,” he adds. “Obviously a lot of our global partners enjoy the huge brand recognition Arsenal can bring them in this part of the world – the likes of Emirates, Puma, Gatorade.” The club supports these partners mainly through its traditional assets, allowing them the use of Arsenal IP in Asia and offering significant pitch-side advertising on matchdays.

Singapore-headquartered technology company Acronis unveils its partnership with Arsenal

The final and arguably most important category for Perazzini’s team in Singapore are larger APAC-based brands looking toward international expansion. “That can be international expansion within APAC, or on a global basis,” he explains. Through their on-the-ground presence in Singapore and the mix of assets the club are able to offer these kinds of sponsors, Perazzini says Arsenal have established themselves as a “one-stop shop to deliver a consistent strategy around the globe” for these kinds of partners, leveraging the strength of the Arsenal brand in the territories their partner is targeting.

“We need to keep reminding ourselves that we are fortunate to be a part of that London-based global football club playing in the Premier League, and that this gives us an incredible mix of assets to offer our partners,” he says. “Brands are increasingly giving more importance to a range of assets, but the kind of instant media exposure you get with a club like Arsenal is really important and still plays very well, especially in this part of the world.”

Singapore office drives BYD partnership

Into this last category fits BYD, the Chinese electric vehicle manufacturer Arsenal confirmed as their official global car and bus partner in April 2018, in a deal estimated by SportBusiness Sponsorship to be worth about $4m annually.

“We were engaged in a search for an automotive partner on a global scale,” says Perazzini. “We spoke to a lot of different people, but the conversation with BYD became interesting very quickly. It’s important for Arsenal that all of our partners fit the values of the club, and we put a particular importance on sustainability.”

In 2016, BYD began supplying electric buses to Arsenal’s home city of London, and saw the partnership as a further opportunity to reinforce its brand as a leader in the sustainable vehicle market in the UK and beyond.

As well as offering that “instant media exposure” through pitchside advertising and branding on the team dugouts at the Emirates Stadium, Arsenal are also able to give BYD a long-term media platform, supporting the brand’s efforts in both Asia and Europe from the offices in Singapore and London. Arsenal Media Group, the organisation established over a decade ago to create bespoke digital and social content, will create bespoke content for different markets that reflects BYD’s differing goals in Europe and in Asia.

“The whole buildup to the negotiations, and handling the negotiations, and all the different levels of contract stages and relationships with the key people – it was all driven by this office,” he says. “[…] this is a good example of a partnership that shows the value of being here.”

Partnering with a major Chinese company – BYD is the biggest-selling domestic car manufacturer in China – aligned with Arsenal’s own goals, too. The club is keen to use its partnerships, in Asia and around the rest of the world, to build up its own visibility and fan reach. BYD has used Arsenal’s IP and marques in advertising campaigns in China, something Perazzini says “represents a lot of value for the club as well as for the brand”.

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