Barclays share price: Bank considering English Premier League exit

on Jan 27, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Monday, January 27: Barclays (LON:BARC) is considering ending its sponsorship of the English Premier League, inside sources have revealed to several major newspapers.

The planned withdrawal from the Premier League sponsorship is part of a broader review of its sponsorship of high profile events, which include the tennis ATP World Tour Finals in London and the Barclays Center in New York. CEO Antony Jenkins, who has asked staff to evaluate the financial logic of such tie-ups, has already pulled the plug on the bank’s sponsorship of London’s ‘Boris bikes’ from 2015 (Barclays share price: Bank ditches ‘Boris bike’ sponsorship).

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The British bank’s present English Premier League deal runs until the end of the 2015-16 football season and members of its leadership team are worried that rapid price inflation for sports rights will mean a much higher amount will be demanded by the Premier League for the next three-year deal.
Barclays has been the sponsor of the Premier League since 2001. In 2012, it agreed to pay £120 million — £40 million per year – for the present rights. That was 50 percent higher than the previous deal, which cost £82 million. Given the rivalry between BSkyB (LON:BSY) and BT Sport (LON:BT.A) for the broadcasting rights, Barclays is now concerned that there will be further increases in the next round of bidding in 2015.

The UK lender also has to pay additional “activation costs”, such as using social media and television to promote the deal – expenses which Barclays would have to justify to shareholders.
The outcome of the sponsorship review is ongoing and no definitive decision has been made, but according to insiders, senior figures on the board, as well as executives, do not believe the deal provides value for money.

One banking source has told The Telegraph that Barclays did not need promotion in the UK as the bank has high street branches around the country and its name is well known. According to the insider, the Premier League’s sponsorship deal was most useful for promoting the bank in Asia and Africa but Barclays could now explore other ways of getting its name recognised in overseas territories.

**Barclays under fire**
After news of the potential Premier League exit emerged during the weekend, Barclays was accused of allowing its sponsorship to become little more than “wallpaper”, The Telegraph reported yesterday, citing an industry expert.
Steve Martin of M&C Saatchi Sport and Entertainment claimed that the bank failed to fully exploit an association with one of sport’s most recognisable brands.
“It’s become a bit like wallpaper,” said Martin, as quoted by the newspaper. “There’s been less innovation coming through it, it’s still a bit of a badging exercise, and it doesn’t surprise me it’s not particularly working, because I’m not sure they’ve worked particularly well on it.”
In Friday’s London trading, Barclays’ share price fell 2.38 percent. According to AnalystRatingsNetwork data, the stock’s average rating is ‘buy’ with a consensus price target of 322.18p.
**As of Friday, January 24, buy Barclays shares at 271.75p.**
**As of Friday, January 24, sell Barclays shares at 271.60p.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.

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