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Carlsberg Confirms Talks With Liverpool on £7.5M Sponsor Pact

Forbes published a highly misleading headline yesterday: "Carlsberg And Liverpool Might Part Ways." A closer inspection shows that the opposite is probably the case -- the brewer will likely stick with Liverpool F.C., with whom it currently has a £7.5 million a year sponsor deal.

The story itself didn't live up the tease. Here's what Carlsberg CEO Jorgen Buhl Rasmussen actually told Forbes:

We will have a conclusion of a deal or not this year. But, like in every discussion, everything has a price, and we need to assess the alternatives.
The whole thing hangs on two words: "or not."

Reuters got a more substantive take from the same event, Carlsberg's earnings call:

It's always hard to set a deadline for negotiations but within the next couple of months, we'll hopefully have a conclusion
Rasmussen added that it was difficult to imagine that Carlsberg would switch to sponsoring any other English football club.
BNET noted in June that posturing between Liverpool and Carlsberg had already begun ahead of the contract expiration in 2010. The talks are likely to be difficult. On the one hand, Carlsberg will want to stick with Liverpool because £7.5 million a year is a ludicrously good bargain for such massive exposure on an international brand.

From Liverpool's point of view, the club is plagued by player bills; it just lost Spanish midfielder Xabi Alonso and defender Alvaro Arbeloa to Real Madrid. Those sales are likely greater than its purchase of Alberto Aquilani from Roma but the club will still need to spend big if it is to create a side with a realistic shot at the premier league title (and the sponsor and media riches that attend such an event).

More broadly, Liverpool's owners have laden the club with debt. Even though they know they can probably do much better than £7.5 million, Liverpool's ancient stadium, Anfield, seats only 45,000 and the club doesn't have the money to build anew. That limits Carlsberg's exposure to consumer eyeballs.

The key question: Can Liverpool extract from Carlsberg more than £10 million a year, the magic number surpassed by top-drawer brands such as Manchester United, Juventus, Bayern Munich Chelsea F.C., and Real Madrid?

  • A selected list of current football sponsorship deals:
  • Manchester United: £20 million a year (£80 million over four years with Aon
  • Bayern Munich: £17 million (£68 million over four years) with T-Home
  • Juventus: £15 million a year (£75 million over five years) with Tamoil
  • Real Madrid: £12.7 million a year (£38 million over three years) with Bwin.com
  • Chelsea: £11 million+ a year (£55 million over five years) with Samsung
  • Liverpool: £7.2 million: Liverpool's annual fee from Carlsberg expires in 2010
  • Arsenal: £6.7 million per year (£100 million over 15 years) with Emirates
BNET's previous coverage of football advertising:
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