Market Environment Analysis for Barclays Premier League

The bargaining capability of sponsors

The Barclays Premiership is one of the most followed continuous sporting events. Thus, TV rights become an important issue in terms of revenues. The merchandise sale to fans around the world also takes different proportions. The Premiership goes beyond being merely a sporting event; it becomes an important marketing event. Here the sponsors do have much to say. The relationship between sponsors and sponsored is complicated since both have many benefits from each other (Emery, 2007, p. 46). Thus, the sponsors do play an important role and have a high bargaining capability.

For example, the AIG (American International Group) is the main sponsor of the Manchester United Football Club. They signed a four-year agreement with the club worth 56.6 million pounds in 2006, this being the largest shirt sponsorship deal in the history of English football. That is a huge marketing potential for the sponsor. AIG has been pressuring that the club makes various tournaments in Asia because sponsors always want to gain exposure in growing markets.

The bargaining power of the fans

The team’s performance and its own brand image are two of the main factors that affect the purchasing power of the fans. At the same time, fans will determine the purchasing power of the team sponsors and their profitability. The more fans the club, the more sales potential in it. Overall, the Premiership is an attractive market for sponsors since it is one of the most followed championships in the world. For example, In the 2008-2009 season, Manchester United jersey sales totaled 21.5 million Euros the second highest of all clubs in the Barclays Premiership. The purchasing power of football fans throughout the football industry and its market has in turn had an enormous impact on the team’s performance and its own brand image.

The risk of new entrants

Glasgow Celtic and Rangers are both Scottish Premier League football clubs who had applied to join the Barclays Premier League this year but failed. This incident shows that there are a growing number of teams who hope to join the Barclays football Premier League and enjoy the benefits of a larger market, and so consequently the current 20 Premiership teams will increasingly face serious challenges from external sources.

The threat of substitutes

The Barclay Premier League will never lack competition. A rising competitor in the famous UEFA Champions League. It is becoming one of the most viewed events not only in Europe but in Asia, North and South America also. From the UEFA Champions League, the Barclays Premier League team faces a challenge from the fierce competition and threat from teams outside the Premiership. But for Manchester United, it is different because the club only had four legitimate competitors last season.

Competition among the industry competitors

In the Barclays Premier League, the competition between the teams is very intense. The relationship among the teams at the end of the season seems even more complicated. For example, as Manchester United football club is inextricably linked with as many as seven Premiership teams, each time Manchester United and Manchester City play a gamewe can imagine that the competition between them is just as fierce as when Mars hits the Earth.

Reference List

Emery, D 2007, Corporate Financial management, Prentice Hall, Pearson.