Internet loves sports! Sweden's "NetEase Cloud" Spotify titled Barcelona home camp Nou

Sports Big Business No. 2841, welcome to pay attention to the leading sports industry information platform

Wen | Tan Liwen

Sports big business reporter

Barca, who is short of money, has finally waited for a new owner.

On March 16, Barça officially announced Swedish music streaming company Spotify as the club's new main sponsor. According to Searle Radio, Barça will receive 70 million euros of sponsorship fees per year, and Barca will receive a total of 280 million euros in four seasons.

It's worth noting that this is Spotify's first shot at sports marketing. Sports Big Business believes that Spotify's sponsorship of Barcelona is iconic. Consumer Internet giants represented by Spotify, or will they become the main force of sports marketing?

Spotify spent 280 million euros on sponsorship fees

Camp Nou sold naming rights for the first time

After Barca announced that it would not renew its contract with Messi, Lotte also abandoned its sponsorship contract with Barca.

Rakuten has been a sponsor of Barca since 2017 and the contract between the two parties expires on June 30, 2022. According to the agreement reached between the two sides, Rakuten sponsors the team for 55 million euros a year, and their first contract ends in the 2020-21 season. After the expiration of the first contract, the two sides renewed their contracts for a year, but the sponsorship fee for the 2021-22 season fell to 30 million euros.

The "earthquake" of Messi's departure has caused many sponsors to choose to flee camp Nou, which directly makes Barca's financial difficulties worse. (Extended reading: Barça diou sponsors Paris to sign Dior, Messi aftershocks are missing)

Barca failed to keep Messi

In October 2021, Barça's official website released the financial report of the club for the 2020-21 financial year, which generated revenue of 631 million euros, expenses of 1.136 billion euros and an after-tax loss of 481 million euros. During the same period, Barca commissioned del Dale to conduct financial inspections. According to the survey results, as of March 2021, Barça Club's net debt was 1.35 billion euros.

Amid the club's enormous financial pressure and the sharp decline in the appeal of Messi's departure to sponsors, Barca have found Spotify, a big financier. But unlike before, barca, which is short of money, has added naming rights to the Camp Nou stadium on this new contract.

Camp Nou's first "name change"

Under the agreement between the two sides, barca will sell the home naming rights for the first time in their history and the stadium will be renamed The Camp Spotify. In addition, starting from the 2022-23 season, Spotify will appear Barca on the Barça men's and women's jerseys for four years, and they will also sponsor the team's training uniforms for three years.

The agreement signed by Barça's Board of Directors is subject to the approval of the Extraordinary General Assembly on 3 April. Under the framework of this cooperation, Spotify will become a major partner of Barca from the beginning of the 2022/23 season, and the stadium's long-term cooperation agreement will take effect in July 2022.

Spotify, the world's largest music streaming service

Since Spotify did not open the service in Chinese mainland, this popular music streaming service platform in the international market is not well known in China. Spotify does not have an official Chinese translation name, and many netizens call it Sonic field or Sonic Skybreaker. In Barca's press release, they adopted the latter.

Barca's official WeChat tweet

Founded in 2006, Spotify is currently the world's largest music streaming service and the largest audio service provider. Spotify has co-licensing with world-renowned record labels such as Universal Music, Sony Music Entertainment, Warner Music, Tencent Music Entertainment, and other record labels.

Massive music libraries, convenient multi-platform switching and excellent song recommendation algorithms have made Spotify the world's most popular music streaming service.

In April 2018, Spotify was successfully listed on the US stock market. On February 19, 2021, Spotify's share price reached its peak at $364.59. As of press time, Spotify's current share price is $123.84, and its market capitalization is about $23.636 billion.

Spotify currently has a market capitalization of about $23.636 billion

On February 2, 2022, Spotify released its 2021Q4 financial report. Several key figures show spotify achieved revenue of $3.076 billion in the quarter; monthly active users reached 406 million, an increase of 18% year-on-year; the number of paid subscribers was 180 million, an increase of 16% year-on-year; the gross margin for the fourth quarter was 26.5%; and a loss of 39 million euros, compared with a loss of 125 million euros in the same period last year.

According to the Q4 financial report, the annual sponsorship expense of 70 million euros (about $76.91 million) does not seem to be too much of a "burden" on Spotify with a market value of $23.6 billion, after all, Spotify was able to achieve revenue of $3.076 billion in a single quarter in Q4.

On the contrary, for Spotify, it is quite a bit of "bottoming out" the value of Barca's sponsorship. Compared to previous sponsors, Spotify's biggest breakthrough in sponsoring Barcelona is to obtain the naming rights at Camp Nou. You know, this is the first time that Barca has sold the naming rights of the stadium, and its communication effect and advertising value are by no means comparable to the sponsorship of the jersey owner.

Spotify "bottoming out" Barca sponsorship value?

This sponsorship contract can be said to be for Spotify and Barca. On the one hand, Spotify needs to further consolidate its own music streaming supremacy with the help of sports marketing, and merging the music and football worlds together can allow them to connect more with users. On the other hand, Barça, plagued by debt, can obtain a large amount of sponsorship income, which can also alleviate the urgent need.

After Messi's departure, signing Spotify is one of the few pieces of good news for Barca. After the successful cooperation agreement between the two sides, barca's sponsorship value may be revisited. Music streaming giant Spotify is still spending a lot of money at the moment when Barça is plagued by negative news and the brand image is low, which will undoubtedly become an important chip for Barça to reshape its brand image and sign more sponsors.

Internet companies may become the main force of sports marketing

In fact, this isn't the first time Spotify has targeted sports shots. In May 2021, Spotify co-founder and CEO Daniel Ek bid $2.55 billion to buy Arsenal. Subsequently, EK raised the offer to $2.83 billion and was still rejected. It was not until this sponsorship agreement with Barca that Spotify officially entered the sports field.

Objectively speaking, as an internet company founded in 2006, Spotify didn't enter sports marketing until 2022 seems a bit late. Under the influence of the epidemic, the main force of sports marketing has changed from the previous aviation, real estate, banking, finance, insurance and car companies to Internet companies.

In addition to Spotify holding hands with Barcelona, Oracle title f1 Red Bull Racing, Amazon AWS will partner with the PGA Tour, LinkedIn become the national sponsor of the European Championship for women's soccer in England, and the NHL, NHLPA and short video giant TikTok have established partnerships... It can be seen that Internet companies have become the main cooperation objects of major events or clubs.

Oracle named Red Bull Racing

In addition to the above-mentioned Internet companies, as a video streaming giant, Netflix Netflix has not directly intervened in sports marketing. Instead, Netflix has continued to launch self-made sports content, including the F1 documentary "Survival" and the Neymar documentary "Neymar: The Perfect Mess".

Judging from the shots of Consumer Internet companies such as Spotify, Oracle, and Amazon AWS, it means that the influence of sports marketing is getting stronger and stronger. The categories, quantities and marketing methods of brands reflected in these collaborative cases can prove that the influence of sports marketing is expanding.

In the future, with the gradual deepening of the combination of sports + Internet, sports are accelerating to digital transformation, and sports digital marketing methods have become commonplace. Internet companies stepping up sports marketing may become a new trend in the next stage.

Note: The images used in this article are from the Internet