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.

Who are the new sponsors?

Do Swansea have mega-deal lined up which includes stadium naming rights?

Is the Liberty Stadium soon to be renamed?

Back in 2005, the Swans left their ancestral Vetch Field home to move to a new stadium which would, they hoped, help propel the team in an upward direction through the league system. It worked out pretty darn well, as it goes, and they currently find themselves strutting their stuff in the Premier League; a major cup holder for the first time in their history. This week however, the biggest news was that the Swans were cutting short their current sponsorship deal; which does leave you wondering just what Huw and co have lined up, as they continue to prove themselves canny negotiators. 

First, lets have a look at what was already on the table. The stadium naming rights are currently paid for by Liberty Properties, who signed, originally, a five year deal worth £100k a year. Back then that was important money for the Swans. In 2010 they renewed that deal for another five years at the same rate, so that currently runs for another year and a half.

The shirt sponsorship with 32RED was a five year deal worth £1.1million a year, so a bit more cash in the attic there. It started in 2009 so was due to expire at the end of the 2013/2014 season, but evidently the board think they can secure a better deal elsewhere, and with the cash currently kicking around in SA1 who's to say they aren't negotiating a release of the Liberty naming rights - in a bid to land a bumper shirt AND stadium naming rights package? As mentioned in my previous blog, I would hope that if this were the case, it wouldn't be quite simply a case of selling to the highest bidder. No fan would like to see their team sponsored by McDonalds, Tesco or Starbucks, I'm sure, and Swansea fans have, on the whole, appreciated that having a stadium called "The Liberty" is actually rather nice. 

As yet no information has left the Swans camp regarding a new sponsor, however given the fiscally prudent approach in evidence over the last decade it's unlikely the Swans have kicked 32RED out of bed without somebody else ready to jump in. The question is who? From the list here, it's evident given the Swans impending European adventure that we could realistically hope to triple the income from our shirt sponsorship, and over five years that would lead to an extra £10million - not an amount to be trifled with! Couple that with the possibility that the Swans have reached an agreement to end the deal with Liberty Properties to seek more lucrative pastures and it could significantly increase sponsorship revenue. 

It's already been hinted at by the Swans that any increased revenue will go towards the expansion of the stadium, and the amounts mentioned would cover a massive chunk of this. It really does seem to be an excellent move on the part of the board, and if it is announced that the Swans have signed a new mega-deal with a flashy new sponsor then they must be applauded for continuing to maximise the opportunities the Premier League provides. Since day one they've worked tirelessly for the benefit of Swansea City, and it shows no sign of easing up just yet. Keep up the good work, guys. 

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?