Exclusive: Swansea Vice-Chairman Leigh Dineen answers questions on commercial deals

With the Swans progressing on and off the field, I thought it'd be a useful exercise to try and get a grasp of what commercial deals are in place

Since promotion to the Premiership (and even before) the Swans have garnered more and more attention from the press and the football world alike, which has allowed them to secure increasingly impressive link-ups with big-name partners. 

With the announcement last week that we'd struck a deal with LG, I thought it would be an opportune time to ask the club about commercial deals in general, and Swansea City Vice-Chairman Leigh Dineen (who oversees commercial activities) has kindly agreed to answer some questions for me on the new deal with LG, as well as a couple of other things I was curious about. So, without further ado...

The reason I asked if you'd like to answer a few questions is I'm not 100% as to what the new agreement with LG will entail (where they've become official electronics & mobile phone partners). What can you tell us about the agreement?  

The initial partnership is centred around their release of their new phone. We have agreed a years partnership with them that hopefully will evolve in the future. The agreement is heavily centred around advertising rights.

 

Will we see tangible commercial activities or is this a deal that will simply benefit both club and commercial partner through increased exposure and "brand awareness"?

 

It is mainly centred around brand awareness for this year as the agreement was set up quite late. We are hopeful that there will be opportunities in the future to develop commercial activities

 

You stated in the BBC documentary about Swansea City that when the current regime took control, one of the first things which had to be decided was who took on exactly what tasks. Who was it who looked at the commercial sponsorship side of things back then, and what kind of deals were in place?

 

I did, and there weren’t really any deals of note in place. Even today it is difficult for clubs in the lower tiers to secure lucrative partnership/sponsorship deals as most are based around brand exposure and the lower leagues do not get the type of exposure required. The kit was being manufactured locally and a lot of sponsorship/advertising had dried up due to the situation the club was in.

 

Was there a moment where a new sponsorship deal was penned and the board looked at the numbers involved and thought "wow, we've done well here - we've come a long way since Stretchout!"? 

Each and every front of shirt we have done has been a step forward in the past few years. 32Red was influencial for us as it was done in the Championship and they were a brand that had sponsored a Premier league team in the past. It wasnt all about the financials for that deal – it was about positioning ourselves with a very well known Company.

 

With the club growing so fast, have you had problems where you've agreed a deal with one party, only for the club to quickly outgrow the deal that was penned, leading to the club having to renegotiate and/or pull out of the agreement? Obviously, the 32RED deal ended early - was that what happened there?

 

Yes to a certain extent and we now are very careful as to how long a deal we sign.

 

I understand we have/had an ongoing deal with Infiniti (Nissan's luxury-car division) - is that still ongoing? What does that involve and does it benefit the club?

 

The deal with Infiniti was for one year only.

 

On the official site, I can see we've got a shirt sponsorship with GWFX, the new agreement with LG, as well as Carlsberg, Adidas & the Barclays Premier League being listed as official partners. What role do Carlsberg play, and do we have any other commercial agreements in place which aren't openly listed on the website?

 

We have a couple of betting deals as well. One with European rights and one with Asian. Carlsberg are now the official beer of the premier league and they have also aligned themselves alongside some Premier League clubs. We are one of those

 

Are the club looking into things such as "training kit sponsors" as extra ways of producing revenue, or would there be a line drawn in the sand where the club felt we already have enough partners?

 

The likes of Man United have the reach to do these sort of deals whereas clubs like us would struggle at this stage to split training away from front of shirt etc. Companies aligned to the likes of Man United see more value in being able to promote the fact they are a partner of Man U rather than in the base exposure of being seen on the training top. 

Building the brand takes years and years of Premier league football not just a few years so we have a long way to go. Some clubs in the premier league have been there for 15-20 years and still cannot demand the rights fees that Man United and Liverpool can. Even Man City, Chelsea etc struggle to do so.

 

The one-year deal penned with GWFX was for £2million, whereas Fulham's deal with FXPro is worth £4million a year. Are the club looking to renew the deal with GWFX, or are other options being explored?

 

Don’t believe everything you read with regards to what a front of shirt deal is worth (although of course worth is different to what was actually paid as well). I know of one shirt sponsorship deal where it was quoted that the club received £5 million - in fact it was less than ours.

 

Lastly, could you point to two different agreements for more or less the same thing (shirt sponsorship?) which helps show how far we've come? For example, how much was the shirt sponsorship agreement worth in 2003 and how much of a smaller figure was it than the new deal with GWFX?

 

The shirt deal 10 years ago was worth less than 6 figures and we only had that due to one of our shareholders.

As I'd have probably wagered prior to these questions being answered, it comes as no surprise to me that the board are now having to factor in potential growth (and, no doubt, possible relegation to cover all the bases) when agreeing any kind of commercial deal. With LG being a South Korean firm, I'd also speculate Ki playing for the club next year would go a long way in securing an extended deal in the future. 

Also, as far as the GWFX deal goes I'm very interested to see what developments occur in the near future with regards to next season. If the club are exploring other avenues you'd imagine discussions are already ongoing, and another top-half finish coupled with (relative) European success would do no harm to our chances of securing a big, big name. 

The money raised by these deals could be crucial in a number of areas. Stadium expansion, player recruitment, construction costs of the new training bases - these are all multi-million pound projects and any commercial deal we put in place is welcome, in my opinion. As long as we don't go getting "Wonga" on the shirts, pretty much anything else is fine by me. In fairness, at the recent fans' forum the club stated that they do take into consideration the nature of the business in question before agreeing a partnership, and that's refreshing to see.

I'd be very interested to see what percentage of our revenue is now generated by commercial, merchandising and matchday sales respectively, and hopefully we can find out that from the club in due course. Yearly financial figures would give us a good idea, however with the figures involved increasing exponentially at the moment unless you know what's currently in place second-guessing the figures would be a futile exercise.

Big thanks to Leigh Dineen for taking the time to answer these questions. I doubt there's many clubs in the Premiership whose Vice-Chairman would respond so readily! It reinforces the honest and open nature with which they run the club, and as it stands we can remain proud and supportive of our board as they continue to work tirelessly behind the scenes to secure the best possible deals for the club.

"Laudrup to stay at Swansea" says someone who could be his agent

Posts on Twitter indicate all is well in South Wales

Following on from the supposed news that Laudrup was growing miffed at our lack of activity in the transfer market, we've had to endure a farcical few days of speculation. The manner in which this is currently being handled is rather worrying to be honest - it seems no-one really knows what's going on and at the centre of the issue is Bayram Tutumlu, Laudrup's agent.

Posts on a newly created Twitter account purportedly belonging to the Dane's representative have led to a new wave of stories. The only quote the press have run with is this:

"Michael Laudrup is going to stay at Swansea City because he promised the players that he was going to stay. 

"For Michael Laudrup, his word is more important than other things." 

Matter over? Not quite. Within hours of this story being picked up, there was massive speculation as to whether the Twitter account is genuine. I have to admit, I have my doubts and given that WalesOnline weren't confident enough to use the quote in their article it seems I'm not alone. The Evening Post and Skysports were both confident enough to include it though, so maybe they've managed to verify it's authenticity.

As stated the other day, even if there is an issue I'm sure it can be resolved amicably. Laudrup seems like a reasonable chap, and losing out to clubs like Liverpool (Aspas) and Chelsea (Lukaku looks set to stay in London next season) can hardly be labelled as a failing on the part of the board.

Given that all this speculation stemmed from comments by Tutumlu, if it turns out the Twitter account is genuine then it could be that he's trying to stem the surge of conjecture that we've seen this week. We won't know until it's confirmed or denied either way - Swansea Vice-Chairman Leigh Dineen originally denounced the account as a fake but has since admitted it looks like the account used (along with another) are both genuine, so hopefully that's this one put to bed.

With Laudrup reported to be meeting the board for talks next week, it could well be that transfer dealings start in earnest. I for one can't wait. 

Swansea announce record profit - what does the dividend payment actually mean?

Announcement that Swans will be paying out dividends to shareholders splits opinion amongst some fans

The announcement yesterday that the Swans had made a £15.9million profit (after tax & interest) for the six months leading to November 30th 2012 came as no surprise to anyone familiar with how the Swansea hierarchy do things. Prudence has long been the byword in these parts, and the board continue to seek out the best deal for Swansea City at every corner, in an attempt to maximise the opportunities continued Premier League involvement provides.


One aspect of the statement which seems to have split some fans though is the announcement that for the first time a £1million dividend is to be paid out to shareholders. I'm going to set my stall out early and say I have absolutely no problem whatsoever in the Swans directors being paid a dividend at this stage. As stated by Huw Jenkins, dividends are (as far as the taxman goes) the most cost-effective way of rewarding staff, and the club have been open and honest whenever money has been doled out. Given the makeup of the club's ownership, it's likely the dividend will be broken up as follows;

Name	Stake	Likely dividend
Mr & Mrs Martin Morgan	22.50%	£225,000.00
Brian Katzen	20.00%	£200,000.00
Swansea City Supporters Trust	20.00%	£200,000.00
Huw Jenkins	12.50%	£125,000.00
Robert Davies	10.00%	£100,000.00

The statement last night posted by the Swans Supporters' Trust showed they will receive £199,999 - so where that extra quid went is anyone's guess. Given the Swans history of financial dealings, maybe it paid for the envelope in which the dividend was delivered! The trust have indicated they will hang onto the money until, hopefully, they can increase their stake in the club - which seems like a very sensible attitude to take. While looking for information for this blog I came across an article posted on the Birmingham Supporters' Trust site which labelled the Swans as a "benchmark" which other clubs should aspire to - definitely worth a read:  http://www.bluestrust.org/2013/01/the-benchmark-swansea-city/.

David Conn from the Guardian and a small section of the Swansea support seem unhappy that some money is being taken out of the club, but considering the board of directors worked for free until last year (if my memory serves correctly - finding info related to the statement where that was detailed seems impossible!), and the shareholders have, before now, never taken anything back from the Swans, I'd say it's only fair they've been rewarded for their hard work over the years. It's likely that any of the Swans first XI will make more in one year than any of the shareholders have just been paid - and when you consider the dividend could be considered payment for ten years of work it becomes an even smaller figure.

A friend sent me a link to an article from October 2010 showing how much chief executives were earning at clubs up and down the country. Given that all of the relative figures are likely to have risen substantially in the three years which have elapsed since the article was published, the dividend payments made to the Swansea shareholders really do seem inconsequential amounts for a Premier League club. See the list below for more detail, but as an example Ivan Gazidis of Arsenal received £2.1million for the year 2011/12 - more than double the dividend paid out to the ENTIRE Swansea board, and I very much doubt Gazidis has ever put his hand in his own pocket to help out the club he works for.

Obviously, it's not nice to see money leaving the club, but few could argue that the board don't deserve some kind of renumeration. Huw Jenkins had to watch as his construction company went under (no doubt increased Swans-related commitments had an impact on his running of his business), and Leigh Dineen famously stated he'd had to re-mortgage his house to raise the funds necessary to buy shares when the opportunity first arose. These are not fabulously wealthy people; these are people who have worked tirelessly over a decade to secure a sound future for the football club we all love - and if they don't deserve to be rewarded then who does? 

Given that the announcement was for "interim financial results" up to November 30th '12 (with a full report due at the end of the tax year in April), it's likely the Swans will end up posting a record profit for this tax year - as revenue accrued from the cup run and the sale of Danny Graham won't have been included in these figures. It'll be interesting to see if dividends become a regular occurrence, or whether it was viewed as a one-off reward for the board's hard work, but for now I can honestly say I've no problem with the payments whatsoever, especially considering 20% of it is essentially being retained by the club. 

Carry on the good work, chaps!

Swansea announce 32RED sponsorship deal to end early

Swans conclude deal with online bookie to explore bigger and better opportunities

The Swans announced today that they would be ending their sponsorship deal with online bookies 32Red, which has run for the last four years and wasn't due to expire until the end of the 2013/2014 season. On a purely aesthetic level, I think the best sponsor we've had in years has to have been "Swansea.com" in a hipster font, however it is highly doubtful that they'll manage to secure a contract given the Swans rise to prominence over the last few years. 

Much more likely is the Swans have had interest from a number of parties, and are seeking to maximise income from areas where no damage will be done to the playing squad. Measures like this show the club are consistently looking around, making sure they have the best possible deal available, and it's pleasing to see they're willing to act if they feel they can secure a better deal elsewhere. Who the interested parties are remains to be seen, but Leigh Dineen was full of beans regarding the news;

Leigh Dineen. Seemingly another
advocate of the "no-tie club".

“I’d like to place on record the club’s enormous thanks for the support that 32Red has given us over the last four years.They have been a pleasure to deal with and played an important factor in our progress.  

“I feel we have some exciting opportunities in the market place and have agreed to conclude the agreement with 32Red one year early and on friendly terms.”            Leigh Dineen

Although not a quote, the official Swans site states "[the club are doing this] to allow Swansea City to engage with third parties who may be able to assist in the physical development of the stadium and support the club in it's next phase of growth" - which sounds to me like they've got something lined up. Furthermore, given the Swans continued financial prudence it seems highly unlikely the Swans would kick one bedfellow out without a glitzier, more attractive bedfellow waiting in the wings. I hope there's a modicum of sensibility when negotiations are finalised; I wouldn't, for example, like McDonalds as a sponsor, however these things must be done to secure a sound financial footing for the club, as there's no guarantee any team outside of the elite will ever enjoy permanent Premier League football.

Measures like this make sure the Swans can't look back in ten years and think "we could have made an extra £5million here", which, as we know, can be all the difference sometimes. While no team the size of the Swans can expect to stay in the Premier League forever, I'd say they've already done enough, and shown enough common sense, to allow us to rest easy in the knowledge that the Swans will be a well run, financially secure football club for the foreseeable future.

Things can only get better?