For whatever reason, I have a vivid memory of a year 8 teacher telling us about his trip to Peru and the fact that half the population were wearing Newcastle United shirts. Why?
Astute readers may have put two and two together and remember that Nolberto Solano played for the club for almost eight years. Solano was big in Peru. He even had his wedding televised live on TV there.
Football is a weirdly popular phenomenon and the number of random conversations I’ve had with people around the world who are obsessed with the Premier League always amazes me. One guy I met in Ethiopia was willing to pay me 3x the cost if I went to Wembley – and it had to be Wembley – and got him the England away kit with Rooney on the back. People are mental.
Anyway, this came to mind a couple of days ago because Exness announced they had signed a deal with LaLiga as part of the latter’s marketing efforts in Latin America. This is interesting for a few reasons.
Why is La Liga in LATAM?
One of the things I believe is we are at ‘peak’ football financially. This stems from something I had to do many eons ago looking at the terms of Man Utd’s leveraged buyout by the Glazers.
To sum up – football clubs make money in three broad ways.
- Ticket sales
- TV licensing deals
- Marketing partnerships
Tickets are not easy to ramp up the price for and many clubs have had flat sales levels for a long time now. For example, Man Utd held its prices flat for 11 years and was still only able to increase them by 5% this season, below the rate of inflation over the last two years and way below the 11 year compound level. This means the real cost of a ticket has gone down dramatically. Clubs struggle to do anything about this because fans go mental if they do. This is why many are trying to have bigger stadiums instead.
It’s a worse story with prices for domestic TV rights. For the Premier League, these are agreed on a four season running basis for the domestic audience. The value of these actually declined from the terms starting 2013 and 2017, from a total of £1.71bn to £1.51bn. The most recent terms, which will run from 2025 to 2029, totalled £1.68bn – so below the historic high in nominal terms and also lower, in real terms, than the terms for the prior four season period. La Liga is the same. Domestic rights have been flat for a while.
This is why leagues are going abroad to sell rights. However, these are also flattening out or in some cases declining.
These dynamics explain why clubs and the football ‘industry’ have started doing random stuff over the last few years. The Super League, for example, was about juicing more money out of the game.
Exness in LATAM
The final route that clubs have is to expand marketing partnerships. This is often on a regional basis and is influenced by where a given player is from. For example, Son Heung Min is so popular in South Korea that Tottenham went there to play two friendly matches and are going to do the same again this summer.
This leads us to Exness in LATAM. Exness opened its most recent office in Uruguay and one would assume they are attempting to grow in the region as a result. This is a good deal for LaLiga – they get more marketing partnership money. This is a good deal for Exness – they get more exposure in a region where they want to expand.
If you look at where La Liga itself has highlighted as key expansion areas in the past, the two LATAM markets are Mexico and Brazil.
Mexico has somewhere in the region of 30m La Liga fans, which is why a number of teams now go there for pre-season tours. For example, Sevilla and Real Betis are playing a game in Mexico this summer. Brazil likely has in the region of 20m La Liga fans and more than 23m who have watched a live game.
Another key point to note here is that the Exness agreement means the company can do stuff with individual players. Eg. You go with an ex-Barcelona player, like Rivaldo, and hang out in Rio de Janeiro. He talks to people about how trading and scoring a bicycle kick are very similar. It goes on the La Liga Instagram and YouTube pages. Your brand reaches lots of people as a result.
It’s all fun stuff. In fact, this very author once went to a Real Madrid game with Exness. After the game I was talking to one of the entourage, who looked very smart in a finely cut suit. He really seemed to know a lot about the game. Later I realised it was Arbeloa. And I’m a Liverpool fan…
