On 11th December 2010 it was announced that Football Club Barcelona, for the first time in its history, would wear a sponsor on their chests. The Qatar Foundation, a not-for-profit organisation, with interests in education, science, and social projects, was introduced by Vice President Javier Faus as the club’s new sponsor, pending approval by the next meeting of the board of general members. In return for wearing the foundation’s name, the club would receive €165 million over five and half seasons, the richest deal in history for the sponsorship of a football club’s shirt.
On 13th December, Club President Sandro Rosell held a press conference with representatives of the Qatar Foundation and Qatar Sports Investment, the foundation’s commercial arm, present. Rosell stated that any other club would want such a deal; that other clubs should be nervous. He was quick to make the point that the agreement was “not with a brand but with a foundation” and to emphasise that “we still have a charitable shirt”. A historic day then; a wonderful new partner in shared endeavour; an exceptional financial deal; all that should bode well for the future. And yet, for some reason, Rosell felt it necessary to use that old adage:
“We have to take one step back to take three steps forward.”
Four years ago Barca made an agreement with UNICEF, the United Nation’s children’s charity, to have their logo on the Barcelona shirt, with Barca paying €1.5m for the privilege. At the time, then President Joan Laporta said: “Through Unicef, we, the people of FC Barcelona, the people of Barça, are very proud to donate our shirt to the children of the world who are our present, but especially our future.” Unicef then seemed the only organisation that could live up to Barca’s “Més que un club” ethos, however it was that decision that laid the groundwork for the Qatar deal, both psychologically (in terms of fans becoming used to seeing an external logo on the shirt) and in terms of governance (the Rosell board required no further ratification before seeking a sponsor, only now to confirm the Qatar Foundation as sponsor). In March of last year, Sandro Rosell stated that if elected he would be willing to sell Football Club Barcelona’s shirt sponsorship if the finances demanded it; and this seems to be the justification the board would prefer placed to the forefront. It would appear that Rosell would like the fans to believe that, for all Laporta’s noble sentiments, his mismanagement had led to actions that could now only cast Rosell as the villain.
At the time of Rosell’s statement, many of us contributors to FCBNews greeted this pre-election warning none too warmly, and many would likely now still be against such a move in principle, however if asked whether this principle (“FCB is not for sale”) was more important than the survival of the club itself, most would likely be willing to concede on this point. Whilst the financials of Barcelona have been much questioned since the changeover of presidents, and we may have to wait some time longer to receive the truest picture of the club’s finances (perhaps one that reflects more positively on Laporta), it seems that at the moment most socis are now viewing the club’s overall position as a matter of genuine deficit, rather than simply differing approaches in accounting practice. With no better information to hand, we too may need to accept this view, and with UEFA’s new Financial Fair Play regulations coming into force from 2012, including the break-even requirement for club operations, alongside continuing discord across the league regarding television rights bargaining, financial confidence and probity would seem rightly a priority.
It is should also be noted that FC Barcelona is not a virginal slate in terms of branding and promotion: aside from Nike as our kit manufacturers (paying us circa €30million per year), Audi, La Caixa, Turkish Airlines, TV3, and Estrella Damm are all sponsors. Real Madrid may wear Bwin on their shirts (and all over their websites) but we too have a window on our site promoting the exclusive Barca Betfair Betting Zone. If non-commercialism is to be considered a virtue, we have not been entirely pure.
From a financial point of view, of all the various revenue streams available to a major football club, shirt sponsorship is perhaps the most profitable and most manageable. Ticket sales more than offset the costs of stadia, but the Camp Nou is an overhead, never the less. Even television rights, where the clubs are being paid for what they would be doing anyway, come with strings attached, with dates and times for matches stipulated (and at times badly managed). Rosell asked rhetorically whether socis would prefer to pay higher membership fees or ticket prices – alternatively whether Pep should be ordered to sell players or funding for La Masia be reduced. Shirt sponsorship is money for nothing really. Painless.
And yet and yet and yet.
As message boards across the cule nation lit up and placards of disgust waved about the Camp Nou during the Real Sociedad game , it seems that Rosell’s argument has not been won, and the emblazoning of the azulgrana has not nearly yet been proven to be painless.
The world press has correctly greeted the deal as the richest in sport history (Sport.es has called it the most expensive shirt in the world), and from a purely factual position that is correct, but from a business perspective many commentators have been quick to point out that this deal may be less lucrative, less sector-leading, than the Barca board have been making out. At €30m per annum for six years, the deal does outstrip its nearest rivals, Bayern Munich, however not by much: T-Mobile pay Bayern some €28.3m per year. The Qatar Foundation deal is the first in this club’s history, the current team may be the greatest in its history, and increasingly the team is being described as the greatest of all time. There can be few better opportunities for organisations to promote their brands through association. Bayern did make it to the Champions League final last year, but does €1.7m (or 5.7%) more seem a fair reflection of the relative value of the current Barca brand? (A quick scan of facebook, increasingly the key marketing tool for such simple affiliations, shows 422,000 people supporting Bayern; compare that to the 8.1million that support FC Barcelona.) Admittedly, now is not a time for profligate corporate spending with a worldwide economic slump – a study by Stageup, an Italian sports consultancy firm, noted that overall shirt sponsorship value across Europe has dropped with the recent economic downturn (down 2.6% to €365m for the five biggest European leagues for the 2009-10 season), and yet it’s still hard to feel that this deal really represents best value, let alone the green-backed jubilation. That same report noted that football sponsorship performed better than other corporate sponsorship expenditure (which fell by more than 10% over that same period) – in other words, if you want to market yourself, football was still the better or best option. With a possible world cup down the pipeline, it seems that a better, more profitable deal could have been struck.
Manchester United sit third with Aon financial services paying €24m per year and that contract was negotiated under duress after AIG made it clear that they would not be continuing their relationship due to their financial meltdown and US government assisted bail-out. When they look to sign a new contract in 2013, is it unlikely that it will be less than €30m? The Bayern contract also ends in 2013 – if they were to resign the same deal with T-Mobile that they have now, only increased in value by the current European rate of inflation of 1.9%, for the 2013-14 season they would receive €29.9m. If inflation increased to the 20 year eurozone average of 2.24% then for 2013-14 they would be receiving £30.25m. FC Barcelona would still only be receiving £30m. A historic deal or a missed opportunity? A coup for the FC Barcelona board or simply poor business?
Leaving the financial merits of the deal aside, the greater degree of criticism seems to stem from personal feelings: matters of ethics, matters of morals.
Johan Cruyff, who does not share the warmest relationship with the current president since Rosell unceremoniously dethroned him from the honorary role he was never properly-ceremoniously elected to, has been quick to criticise the decision, primarily on the charge of commercialisation, and many do feel that Cruyff’s claim that the shirt is now tainted can lead to the charge that we are now less than “more than a club”. I would often point to the Unicef association as the easiest way to distinguish Barca from all other clubs, and this was particularly effective with non-football fans, who often cite the gross commercialism of the game and the bad behaviour that comes from tremendous wages as why they dislike football more than other sports – Barca’s relationship with Unicef was a tonic and the clearest and most easily understood symbol of how Barca was something more than other clubs.
But perhaps we need to accept that times change and these are hard times. One might also argue that a club such as Barca, with its team of world class talent, the salaries that come with that talent, and the bonuses that come with the fruit of their performances, cannot afford not to take advantage of every opportunity for income.
But what then of the Qatar Foundation – the sponsor itself? It seems hard to separate the Qatar Foundation from the Qatar state – not only in name, although in a discussion regarding brand and marketing this is key, but the foundation was established by the Emir, chaired by Her Highness his wife, and receives significant royal support. And so the Barca sponsorship deal can have much of the same criticism levelled at it that met the announcement of Qatar as the 2022 World Cup hosts: Sepp Blatter has now apologised for his “joke” that homosexuals should refrain from any sexual activity whilst at the world cup as homosexual practices are illegal in the gulf state. Amnesty International notes that women also still suffer from unequal treatment under Qatari law and have less protection from violence. Ahmad al Sulaiti, the Executive Director of Qatar Sports Investment who was present at Rosell’s press conference stated: “We share the same vision and culture as Barça, using sport to help society. We share values and transmit the same message”. Many Barca fans – be they male or female, gay or straight – may disagree. This may seem unfair, and many would argue that only through positive engagement between cultures can cultural values be exchanged. That being said, it’s hard to argue that football, an institution that has generally been very male-centric and not very gay-friendly, would be the best medium to deliver that message.
In addition to gender and sexual politics, the country has little freedom of the press and amnesty international cites poor rights for migrant workers, who make up as much of 80% of Qatar’s population, with worker complaints not only commonly including excessive working hours and poor living conditions but also some charges as extreme as torture, imprisonment, and forced labour. Amnesty International noted that “Women migrant domestic workers were particularly at risk of exploitation and abuses such as beatings, rape and other sexual violence” (http://thereport.amnesty.org/sites/default/files/AIR2010_AZ_EN.pdf#page=213). Public flogging occurs, as does the passing of the death sentence. There is much censorship of the press: in July the director of the Doha Centre for Media Freedom, an organisation also funded and setup by the Emir of Qatar, quit his role complaining of Qatari government obstruction.
Freedom House, the independent democracy and human rights watchdog, in its report of the World’s Most Repressive Societies (http://www.freedomhouse.org/uploads/special_report/88.pdf), did not place Qatar in its Worst of the Worst Top 20, but did rate Qatar as “Not Free”, scoring 6 for political rights and 5 for civil liberties, where 1 represents “Most free” and 7 represents “Least Free”. Out of 194 countries, 147 countries scored better than Qatar, 24 scored worse, and the 22 that scored as badly included China, Russia, Iran, Iraq, Rwanda, parts of the Congo, the United Arab Emirates, and Yemen. By comparison, Spain scored in the first rank, 1 for political rights, 1 for civil liberties. For obvious reasons, freedom in political, personal and cultural choices is particularly important to the Catalan nation.
But whilst Qatar doesn’t score so highly for political rights and civil liberties, Transparency International scored it as the 19th least corrupt country out of 178 countries surveyed in its 2010 Corruption Perceptions Index (one place better than the United Kingdom and eleven places better than Spain!). And also it seems reasonably clear that the Qatar Foundation’s own aim seems to be towards guiding the nation through the transition from oil dependent absolute monarchy, towards becoming a regional knowledge hub for science and research, with all the concomitant gains in openness and equality that tends to come with that. A codified family law passed in 2006 improved rights for women (although some inequalities remain) and a new law passed in February 2010 made some improvements to migrant worker rights.
Qatar is not a democracy, and the people who live and work there do not nearly share the same rights as those enjoyed in Catalunya, but could the Qatar Foundation close the gap between the two? Could Barca’s brand promote the Qatar Foundation and its aims in the country and the broader region?
Nevertheless, concerns remain. Graham Hunter and Guillem Ballague noted on Sky Television’s Revista de la Liga (http://www.skysports.com/story/0,19528,11833_6579072,00.html) that the Qatar Foundation has an Islamic Studies Unit which maintains links with one of the more radical clerics, who is banned from entering the United Kingdom and United States, and who has preached anti-Semitism and violence against women. Graham Hunter rightly noted that the Barca board “should have said we will not take your money until you disassociate yourselves from this man. I think they’ve made a major error with that.” This was either a serious oversight by the Rosell board or this relationship is less the partnership presented, and our role is simply to take the money.
This story has not ended. The potential value of this deal may be proven if it was to be renewed in the build up to the World Cup in 2022. Similarly, with Rosell’s past experience as a marketing executive at Nike, greater yields may still be to come from opening up Barca to the Middle East. But equally, in terms of damaging the Barca brand, no reputational disasters have yet occurred to the Qatar Foundation, and so that is a bridge that still may be crossed. Additionally, we may see the impact of this decision in other areas: the saga of Dani Alves’s contract renewal drags on, and so does this deal say to players demanding higher wages either that they cannot have them because the club’s finances are in such a bad state or that alternatively, does it really mean that Barca is just a business like any other and it’s only fair for a player to demand what he feels is the market rate?
We will have to wait and see what this decision will mean for FC Barcelona. But whilst we cannot know whether we will go on to take three steps forward, it’s somewhat easier to feel as though we have already taken that one step back.
I for one am already feeling rather nostalgic for last year’s shirt.