Liverpool are to test the strength of the sponsorship market before entering into serious negotiations with a potential front of shirt sponsor after a report emerged linking a cryptocurrency company with a deal worth more than £70m.
The Premier League club's £40m-per-year deal with Standard Chartered, who has been the main shirt sponsor since 2010, is set to end next season.
The Liverpool Echo said it understands the finance firm have interest in remaining a partner of the club.
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But with the front of shirt sponsorship one of the club's most valuable commercial deals, and having not engaged in a renewal since 2018, pre-pandemic, the Reds are beginning to seek out potential partners, aiming to find out the current value of the market in order to maximise the commercial potential and make sure that they are not only keeping pace with the likes of Manchester City and Manchester United when it comes to sponsorship, but leveraging their success and global appeal to lead from the front.
The Athletic reports that Liverpool are engaging with cryptocurrency firms, among many others, over potentially taking the main shirt sponsorship from 2023. A figure of £70m was mooted in the report.
The Reds, who launched their first NFT collection last month, are understood to be against any sponsorship deals with fan token firms in their current guise, taking the likes of Socios off the table. The Echo understands that significant sponsorship offers from fan token firms have already been rejected this year by the club.
Cryptocurrency has taken off in the last two years at a pace where regulation has struggled to keep up. A wave of firms, led by the likes of Bitcoin, Coinbase and Crypto.com, have all become major players in the market and have already found their way into sports, with Formula One and the NBA among those to have signed significant sponsorship deals with cryptocurrency firms.
For sports teams and leagues, the arrival of crypto has brought with it a flood of capital and companies willing to spend on sponsorship and marketing at a time when sports were reeling from the financial impact of the pandemic, the struggles of some traditional big spenders in the marketplace such as airlines and, in football, forthcoming regulation over betting sponsorships creating uncertainty.
It is, however, a controversial area. It is new, it is volatile and regulation, while on the way, has been unable to keep pace with the growth. But it is also likely here for the long haul and has helped drive commercial revenues forward for teams at a difficult time.
Liverpool have not ruled out cryptocurrency firms partnering with the club but the state of play at present sees it engaging with a number of global firms ahead of negotiations. The Reds are expected to announce a replacement during the summer, ahead of the new season, potentially in June or July.
Standard Chartered has the right to renew their partnership and the Echo understands that discussions are 'live and ongoing' and have believed to have been positive so far.
But needing to understand the value of the club's principal partnership, Liverpool are currently speaking to a number of companies across a variety of industries including financial services, travel and tourism, consumer electronics, fast-moving consumer goods, media, as well as cryptocurrency exchange and blockchain. The club is understood to be reviewing all options and no decision is close to being reached.
Manchester City currently lead the way in terms of the value of their shirt sponsorship deal, with Etihad Airways paying around £67m for the privilege, while Manchester United's deal with TeamViewer was done for £47m per season.
Liverpool's deal, at £40m per season, is at the same level as the likes of Arsenal and Tottenham Hotspur, and needing to deliver greater commercial success to keep on being able to reinvest in the squad, achieving at least at the level of what City do will be on the agenda for the Anfield hierarchy.
According to The Athletic, Liverpool’s commercial chiefs are keen to capitalise on a big-money annual revenue stream that hasn’t been renewed since 2018 by engaging with a number of crypto firms, as well as several other suitors.
Despite cryptocurrency making giant leaps into sports sponsorship over the last 12 months, the reception so far from the six-time European Cup holders has been somewhat lukewarm.
A few weeks ago, the club launched their first NFT collection, but only managed to sell a paltry 5% of the exclusive digital artworks.
Current rumblings inside Anfield also reveal any kind of fan token has been kicked into the long grass and certainly won’t be entertained this year.
The club’s hierarchy is expected to announce its 2023 jersey sponsor before next season kicks off.
