City launch legal action against the Premier League | City win APT case (pg901)

Prestwich_Blue said:
To me, there's a number of elements in assessing fair value:
  1. What is the sponsor paying?
  2. What are they proposing to get for that?
  3. Is what they're paying commensurate with what they're getting?
  4. Is it a genuine transaction?
That's pretty well the tests used by CAS.

If the sponsor pays £50m and they just get a quarter page in the programme, that would fail test 3, and probably 4 as well. If the sponsor is paying £5m and getting their name on the front of the club's shirt, that would fail test 3 if it was City or Liverpool. Ashley's arrangement at Newcastle would probably fail test 3, as he was getting far more exposure for Sports Direct than he was paying for.

On the other hand £5m to sponsor, say, Hull City wouldn't be out of place. You have to consider the exposure the sponsorship gives. City are 7 times PL champions, having won the last 4 titles in a row, a treble in the last few seasons and are one of the hottest properties in football. That's why we'd always attract a premium.

And, as @gordondaviesmoustache said earlier, you also have to consider what the sponsor gets out of it, beyond their name on the shirt. In other words, what's their return on investment? Warrior, when they blew Adidas out of the water for Liverpool's kit deal in 2012, got a high-profile entry into the football kit market. That had to be worth more to them than to the already globally-established Adidas. Ultimately they failed on distribution, so Liverpool went to Nike. But if Warrior got other high-profile deals out of the Liverpool one then it would have been well worth the premium they paid in 2012.

The point is that you can't just look at a database and say "Well united only got £50m for a shirt naming deal from a mobile phone chip manufacturer so that's the benchmark".
Click to expand...
Our enemies knew our owners were far better businessmen than they were and tried to prevent our BP maturity.
The results speak for themselves and demonstrate why we are so good at football and choosing our sponsors.
 
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