For football clubs the most prominent and lucrative parts of their commercial arsenal are their shirt and sleeve sponsorships.
While front-of-shirt sponsorship deals have been the norm in English football since it was widely adopted from the early 1980s, sleeve sponsorship is something that is more recent, with the Premier League allowing clubs to seek commercial partners for their shirt sleeves since the beginning of the 2017/18 season.
Allowing sleeve sponsorships created another valuable revenue stream for clubs, particularly members of the so-called 'big six', whose sleeve sponsorship deals between them at present equate for 73 per cent of the total value of the Premier League sleeve deals combined.
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Liverpool will make an announcement in the coming weeks on whether they have decided to stick or twist on their sleeve sponsorship deal with travel firm Expedia, a deal signed in the summer of 2020 that is now in its final year and worth around £10m per year.
The Reds have been in negotiations with Expedia over potentially extending that deal beyond 2023 but are also understood to be fielding interest from other companies wanting to occupy the space. With a current deal value of £10m per season, struck at the height of the pandemic, given the £20m deals that Manchester United have secured with DXC Technologies and cryptocurrency firm WhaleFin with Chelsea, the Reds' commercial team will be looking to deliver a significant increase given the obvious strength of the market and their place at the very forefront of it.
"Our partnership with Expedia is working great," Liverpool CEO Billy Hogan told the August edition of FC Business magazine. "The process will be similar to that of the principal partner. We are speaking with companies and it is an ongoing process."
Liverpool come into negotiations in a strong commercial position having secured an uplift of more than £10m per year from their main sponsorship deal with banking giant Standard Chartered, who have been the club's principal shirt sponsors since 2009. The deal, from next year onwards, will stand at more than £50m per season.
On its own the value of the Standard Chartered deal puts Liverpool on par with Manchester City. City, through the sponsorship deal with Etihad Airways for both the shirt and the stadium rights, comes in at around £67m, but the shirt deal equates to around £50m per year. Pep Guardiola's title holders currently have a sleeve sponsorship deal worth £12m with Nexen Tire, with City having been the first club to enter the sleeve sponsorship market back in 2017.
The total of their shirt and sleeve sponsorships stands at around £62m per year, less than what Manchester United deliver with TeamViewer and DXC combine (£67m), although higher than Chelsea's £60m per year that arrives through Three and WhaleFin.
Last year the value of Liverpool's shirt and sleeve sponsorship deals annually was £50m. With the increase in the Standard Chartered deal and potential rise in a sleeve sponsorship deal, the Reds could become the first Premier League club to breach the £70m mark for the value of their two most prominent sponsorships, depending on whether or not they are able to leverage what United and Chelsea have achieved in the sale of their sleeve sponsorship this summer when they discuss price.
It points to the growing commercial might of Liverpool, financial strength that has been heavily linked to improvements on the pitch in recent years and a marketing strategy that appeals to potential commercial partners.
Companies want to be more targeted in their approach to partnerships, they want to know who they are reaching and aiming at. Liverpool have been leading the way when it comes to how they gather and retain fan data, something that adds considerable value to their commercial deals.
Barcelona, for example, found they had to accept less than what they had hoped for from Spotify as they had very limited data on their global fan base. The Spanish giants had data on some 30m less fans than the Reds did.
The business of football requires clubs to continually look at ways of moving the needle in order to invest in the players to deliver success. For some clubs. the need for one to work to back up the other and vice versa, is more pressing than at other clubs. Liverpool very much fall into that category.
But should they be able to get what Chelsea and Manchester United have achieved from their next sleeve deals then they will lead the way against some stiff competition for the very first time.
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