TAKUMI MINAMINO | HOW WILL LIVERPOOL BENEFIT IN JAPAN?

The signing of Takumi Minamino by Liverpool Football Club leads to the obvious discussion in sport business circles about the commercial opportunities for the club in Japan. The Japanese international has a proven pedigree at Red Bull Salzburg and Jürgen Klopp is openly talking about the impact Minamino could make to the squad in the immediate future. Minamino made a high profile debut last weekend in Liverpool’s 1-0 win over Everton in the third round of the FA Cup.

So, what’s the commercial opportunity for Liverpool in Japan from Minamino’s signing?

Exposure Value

The signing of Minamino has and will continue to drive media coverage in Japan. The announcement of Minamino’s signature generated more web traffic in Japan than Liverpool’s Semi Final and Final victories in last year’s UEFA Champions League.

The situation in terms of broadcast ratings for Liverpool’s matches is different. The Premier League is broadcast exclusively in Japan by DAZN, an over-the-top subscription sports streaming service. While DAZN is recognised as a major player in global sports broadcast rights, its current subscription base is still very limited (estimated to be 8 million globally) when compared to free to air broadcasters and more traditional pay-operators. Therefore, while an increase in DAZN subscriptions is highly likely, the impact on exposure for Liverpool and its commercial partners will be relatively small in Japan.

By way of contrast, consider what happened to the ratings of the Rugby World Cup in Japan in 2019. As the local team progressed through the tournament, ratings surpassed an average of 50 million people with a peak of over 60 million people during the game against Scotland. While this was a unique situation, it does illustrate the potential audiences in Japan when local heroes perform well and the rights are held by a free to air broadcaster.

Intellectual Property Value

The most significant short to medium term opportunity for Liverpool will be the growth in its Japanese fan base which in turn will increase the Intellectual Property value component of sponsorship deals. This value component of a sponsorship is particularly important when commercialising specific market or regional deals, given that traditional exposure inventory (i.e signage and apparel branding) is usually already fully allocated to existing partners.

The impact of Son Heung-min on Tottenham’s South Korean fan base is a great example of the opportunity for Liverpool. Son’s signing has resulted in 28% of all South Korean Premier League fans following Tottenham compared to an average of 3% across other Asian markets. This in turn has increased the value of a Tier 1 Tottenham sponsorship by almost $USD 2 million per annum.

Currently Liverpool has an 8% share of Premier League fans in Japan, so when you consider the learning from Tottenham, it is quite possible that Liverpool could triple their share of Japanese fans in the coming years if Minamino performs on the pitch. It is also worth noting that Leicester City has benefited from Japanese international Shinji Okazaki’s four seasons at King Power Stadium which included the title winning season in 2015/16. Leicester has 8% of Japanese Premier League fans which is 4 times higher than their global share of Premier League fans.

The Liverpool and Minamino relationship again highlights the opportunities for Premier League teams to attract new fans in the Asian market. These fans are not as “rusted on” as those in Europe and player acquisition can quickly impact the share of fans.

The relationship also highlights the need for the sports industry to better quantify the Intellectual Property value of sponsorship deals. While traditional components of sponsorship packages such as signage, tickets, hospitality and player appearances are finite in nature, the Intellectual Property component of sponsorships can unlock significant incremental value for rights holders.

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Turnstile has been designed and delivered by Gemba, a leading authority in the sport and entertainment industry, after more than three years in development. Gemba carried out extensive testing with leading international brands and rights holders while developing its unique sponsorship pricing methodology.

Turnstile provides the first holistic measurement approach of sponsorship by quantifying value across three core components:

1.      Benefits: The market rate for tickets, hospitality, media assets and other inventory using market benchmarks.

2.      Exposure: Using a proprietary methodology to assess logo exposure effectiveness, Turnstile captures brand exposures and outputs values that reflect the actual market rates of the sponsorship industry.

3.      Intellectual Property: A proprietary algorithm that calculates value using the fan bases of sponsorship properties, with consideration of engagement levels and the purchasing power of fans.