'It jumped to £100m' - Leeds United brand valued above Celtic's and Lazio's as expert talks 'Premier League dynasty'
The recently-released annual Football 50 report from Brand Finance had few surprises in its top 10.
Real Madrid, Barcelona and the two Manchester clubs made up the top four and each of the Premier League’s self-proclaimed ‘big six’ occupied the top 10 in the brand valuation consultancy’s report, which ranks the top 50 most valuable and strongest global football club brands.
Further down the list was a new entry, Leeds United, coming in at 40 ahead of the likes of Benfica, Brighton, Celtic and Lazio.
Promotion and a fine first season in the Premier League combined for a 26 per cent rise in a brand now valued at just over £100m.
Hugo Hensley, Brand Finance’s head of sport services, applies the firm’s expertise to the sporting world for clubs and their corporate sponsors, to help create commercial partnerships.
“To value the club’s brands we use ‘royalty relief’ and the main theory is if Leeds United didn’t own their brand and had to license it to bring in fans, sponsors and drive revenue, what would they have to pay to license it, and if they were to buy it, what would it cost?” he told the YEP.
Three main factors went into the brand valuation: its strength and how it can create positive perceptions among fans, players, managers, broadcasters and sponsors; how it drives different revenue streams from broadcasting, matchdays, merchandising and sponsorship and how the club’s financial forecast looks.
In Leeds’ case, the likelihood of maintaining Premier League status, their chances of ending up in Europe and potential future stadium developments were all factored in.
Just getting to the top flight had a significant impact on how Leeds’ brand was priced.
“The biggest bump came when they were promoted,” said Hensley.
“It brings in a whole set of new revenue steams from Premier League broadcasting, more valuable sponsors and a bit more value from matchday [when fans return].
“It also increases the brand strength.
“It brings higher perceptions as a quality club but it’s also going to have an influence on other consumer perceptions, such as being a club with a strong heritage back in the Premier League.
“When they were promoted the brand value jumped from about £20m to about £80, mostly on the basis of broadcasting revenue.
“But this year with the success they’ve had and the potential to stay for a few years, it jumped to £100m. That pushed them into our top 50 football brands.”
Promotion unlocked high-profile commercial agreements, like a kit deal with sportswear manufacturing giant Adidas and Hensley expects Leeds to grow further on that front.
“That’s the area of the business that most strongly drives brand value, corporate sponsorships and merchandising,” he said.
“Consider how many people turn up on a matchday, you’re limited by stadium size and how many games you have. But you can triple the amount of money coming in from sponsors.
“There’s still so much room ahead. Brand is the main part of those deals that can really push a club like Leeds from a Championship brand value of £20m to Premier League level of over £100m.”
On-the-field success plays a huge part in perceptions and Leeds’ top-10 finish did wonders for how they are viewed by fans and potential sponsors, but ahead of a second season in the Premier League they’re at a crossroads.
“Leeds have done very well,” said Hensley.
“They’ve played a very entertaining style, they’re everyone’s second team but you see where Sheffield United were last year, with a brand value slightly below where Leeds are now, and that’s dropped back down to £66m after a terrible season.
“Leeds have one of two directions to go. Strengthening and solidifying their place in the Premier League will push up the value, reduce the risk on future cashflows and build more confident sponsorships with partners willing to pen longer deals for more money, convinced they’ll still get that exposure from Leeds.
“There’s a risk of relegation, which really knocks value off your brand because it’s exposed to a smaller audience and less associated with the success of the Premier League and its millions of global fans.”
Leeds already boasted a huge worldwide following before promotion.
Andrea Radrizzani’s ownership and Marcelo Bielsa’s Elland Road revolution re-engaged a fanbase with its love for the club.
But still they press on to win new fans, aggressively pursuing ‘Gen Z’ - the demographic born between the mid-to-late 1990s and the early 2010s - to bolster their global following and grow commercial revenue.
“It is important, it’s one of the areas where sponsors are able to achieve a much greater marginal benefit,” continued Hensley.
“These are the audiences who are easiest to grow through a digital sense, cheaper to reach and win.
“Proving they’ve got as strong a brand among them as Leeds United have, allows them to take that to partners and say ‘look at this audience we can reach and influence’.
“This audience is worth more money for partners to gain exposure to.
“All the other groups of fans are less changeable, not worth as much in terms of how much you can grow that audience and influence their purchasing decisions.”
Darin White, executive director of Samford University’s Center for Sports Analytics, says the club have been successful in reaching more and more people digitally.
“As a professional sports franchise your success is all about the size of your fanbase and the passion of your fanbase, those are two variables that correlate with revenue,” he told the YEP.
“What social media allows you to do is grow the size of your fanbase, which Leeds have done with tremendous increases of followers over the last year.
“They were around half a million followers on Twitter when they got promoted and they’ve had about a 50 per cent increase since then.
“It also helps you drive passion because you can keep your fans connected 365 days a year, you’re able to make them feel much more connected to the club through your content, involving players and coaches.”
Approaching a second Premier League season, with hordes of long-standing and new fans anticipating at least three first team additions and Bielsa committed to a fourth season in charge, Leeds want to establish themselves as a top-half top-tier team.
If they do, the brand value they can take to sponsors will follow the trajectory of the very club Radrizzani hopes to emulate.
“It’s very tough to forecast,” said Hensley
“As long as Leeds keep hold of the players and the manager, I don’t see why they couldn’t start building a Premier League dynasty. You look at Leicester, their brand value went up to £290m from a similar position to Leeds five years ago.
“There’s no reason they can’t add another £20 or £30m over the next year by staying in the Premier League, securing that broadcast revenue and proving to partners they’re delivering value for the corporate sponsors.”
Wanting to be liked has never been very Leeds, but a strong 2021/22 season that brings increased popularity and stature would be entirely on-brand.