Sponsorship has long been a major reason for the success of football clubs in the UK (as well as television revenue). Throughout the 1990s, some of the flagship sponsors included JVC (Arsenal), Sharp (Manchester United), Carlsberg (Liverpool) and Autoglass (Chelsea), to name just a few.
However, in line with the online gambling boom from the mid-2000s onwards, somewhat of a logical symmetry developed between football clubs and gambling/sports betting companies. Lucrative sponsorship deals as these companies realised that this could well be a major branding opportunity that could lead to increased revenue long term. The most notable of which being Betway (West Ham United), BetVictor (Liverpool), Fulham (Betfair), Bet365 (Stoke City) and Leeds United (32 Red).
This has also proven to be particularly lucrative for football clubs, adding a major source of revenue, with sports betting companies generally paying higher fees than sponsors in other industries.
Much of this sponsorship revenue has been used for numerous things, not just operational but also for long-term growth, such as investment in academy squads. However, following the impending gambling review that could well materialise over the next few months, this may put an end to betting companies being allowed to sponsor football clubs in the UK.
How Could A Restriction Of Gambling Sponsorship Affect Football Club Revenues?
Arguably for most Premier League football clubs, a ban on betting companies being allowed to agree to sponsorships perhaps may not have too much of an effect on revenue when considering the fees that they get paid from media deals relating to television rights.
However, for gambling companies themselves, this could well have a considerable effect. The extent to which the promotion and awareness that football clubs help gambling companies has proven to be highly effective. Their branding covers a significant proportion of football stadiums while also appearing on the official club shirts that the players wear and fans buy.
The money that football clubs receive from gambling companies also helps with on-field recruitment, and taking this money away could have an effect on smaller clubs that rely on this for their ability to invest in their playing squad.
It leads to the suggestion that grassroots funding, especially lower down the football pyramid, could become essential for the continued and long-term growth of football clubs that are not considered to be in the elite.
Consequently, this would lead to a major rethink of a football club’s strategy when it comes to recruitment in their first-team squad due to less money being available that a gambling company would usually contribute.
As a result, an overhaul in scouting policy for these clubs may be the answer, ensuring they can develop themselves at a grassroots level and then having the right coaches in place to help further improve talent. Of course, a lot of youth talent at lower league clubs only go on to appear for the first team on a handful of occasions (if at all), before they begin to attract the interest of higher profile clubs, who recruit them to their own academies.
While a transfer fee is not involved, due to the player’s age, these clubs do receive a significant compensation package that can be a helpful bonus, and this can then contribute towards investment for the playing squad.
Meanwhile, at an amateur level, the UK government recently announced an initiative to commit £39 million to 116 grassroots facilities around the country in collaboration with the FA (Football Association). As such, this has the potential to see many players at an amateur level transition into the professional game and benefit clubs across the football pyramid long term.
What Effect Could A Lack Of Gambling Sponsorship Have On Elite Clubs?
With more and more billionaire owners of football clubs at the highest level in the UK, it is highly unlikely that a gambling sponsorship ban would affect these clubs too much, if at all.
In addition, these clubs would easily be able to attract other major sponsors (based on the increase of the respective club’s profile). These clubs are also able to invest heavily in their scouting system to become sustainable as quickly as possible while also doing the same with the first-team squad to make sure that they can compete at the highest level in the meantime.
Some also agree to feeder affiliations with other clubs as an alternative grassroots investment model. Chelsea used this to their considerable advantage in the early Roman Abramovich era, which paid dividends.
Ultimately, it can be said that a gambling advertising ban would not affect the revenues of higher-profile (billionaire-owned) clubs at all. In fact, many leading clubs and other sports have been turning away from gambling sponsors in recent years.
To What Extent Could A Gambling Sponsorship Ban Have On Operators?
Although the UK is a fairly big market for betting companies, this may not have too much of an effect on their revenues, mainly because, from an awareness standpoint, over the last decade, many people already have accounts with them.
The answer for them would lie in onboarding more football clubs around Europe as a source of longer-term revenue, despite many of these clubs having highly effective grassroots policies for developing youth talent (many of which end up in the Premier League anyway).
Of course, there are many European markets that are witnessing a considerable boom in gambling, while other countries have recently launched regulated markets, providing many further sponsorship opportunities for gambling companies.
More Government Involvement In The Development Of Grassroots Football?
Naturally, with the UK government having a major influence on whether to ban gambling sponsorship, it could mean then that they will need to compensate from a lower level, which may benefit football clubs lower down in the national pyramid.
This year’s £39 million investment into grassroots football may need to continue in order to effectively make the game fairer and attempt to increase the disparity between the elite clubs and those in the lower echelons of the game.
While many children at these facilities might not make it into the professional game, this funding would give them more of a fighting chance, compared to football clubs relying on money from gambling companies, that they can then invest in proven players in the game.
Another perspective is also the fact that children benefit from this funding while also no longer seeing gambling advertisements at their favourite football clubs, which is another benefit, especially for their development.
This can only be a good thing for the game as it looks to (from a government angle) detach itself from sports betting and its affiliation with football. Most children may only think of specific clubs because of a sports betting company (Betway/West Ham, for example), instead of the good that they do for the community and at the grassroots level.
It will be interesting to see whether a ban does materialise, though for clubs lower down the pyramid, it may well help, especially from a grassroots level. Watch this space.