Leicester City: how to be a top brand in five years

The history of Leicester City is a lightning bolt that has split the football pitches and also the stock markets.

“We are going to lose a fortune with the Leicester title. The odds of 5,000 to 1 is the highest price paid in betting history,” said Joe Crilly, spokesman for betting house William Hill, after the Foxes won the Premier League in 2016.

Five years have passed since Leicester surprised the world and won the English league. Since then, he has increased his brand value up to 17 times, entered the Top 20 of the most valuable on the planet and, for the first time, will play continental competition in two consecutive years. The story is still being written.

The Foxes concluded the 2020-21 season by winning their first FA Cup and in fifth place in the Premier, thus ensuring their participation in the 2021-22 Europa League (this year they stayed in the round of 32). They missed out on a chance to return to the Champions League on the final matchday, having stayed in the top four of the league for more than a month.

Despite this decline, they are experiencing their most glorious time in sporting and commercial terms: since the club was acquired by Thai millionaire Vichai Srivaddhanaprabha in 2010, they rose to the First Division in four years and, two years later, won the trophy in that category. In addition, he has accumulated three participations in continental tournaments in five years, while before it had taken him 40 years to have that number.

Another window that Leicester has exploited is transfers. Thanks to his scouting and results, he has earned 295.2 million euros from the sale of six of his most important players from 2016 to date. Two of them, Harry Maguire and Riyad Mahrez, are in the Top 20 most expensive signings in English football.

Origin of history and a touch of tourism

Khun Vichai, as the owner was known, bought the team for around €45m in 2010. The previous owner was Milan Mandaric and he was €119m in debt; sportingly, they were in the second category.

Vichai’s capital comes from King Power, a company with a retail concept that it created in 1989 and that does not pay taxes. Their annual earnings are 2,600 million euros on average and, being that their main source of income, the Srivaddhanaprabha family has a current wealth of more than 3,000 million, ranking among the 500 most powerful families in the world (Forbes, 2020).

Thanks to this business, the Thai tycoon managed to relate to high political circles in his country and also in the United Kingdom, so he decided to turn his investments to soccer in this European country. He also did it with the aim of relaunching tourism in his country at an intercontinental level.

Currently, the Thai Ministry of Tourism brand is advertised on the front of Leicester’s jersey, a strategy that has also been used by countries such as Rwanda and Azerbaijan.

Vichai passed away in 2018 in a plane crash just after watching his team’s game. He was a beloved character, as he invited fans to drink a beer and eat a piece of cake in the stadium when Leicester achieved a feat, such as promotion or the Premiership title. After this latest achievement, he gave each of the players a car.

“They seem like little things, but they are details that make fans feel loved. There is a very common chant among Leicester fans: ‘Vichai had a dream’. Which club in the world korea their owners? It is a completely atypical case, a textbook success, ”describes Ilie Oleart, an English soccer expert, to El Confidencial.

“My dad made Leicester City a family,” said Aiyawatt Srivaddhanaprabha, heir to King Power and the football team since 2018. After the death of the owner, goalkeeper Peter Schmeichel acknowledged that it has not only been a business for the Thais:

“It’s time to praise the owners, because look what can happen when you run a club properly, when you don’t treat it just like a business. The business side has to work, but also treat it as a passion project, something you enjoy, coming to the games and interacting with the fans.”

The revaluation of brand and players

According to figures from the Statista portal, Leicester City’s brand value reached its lowest point in the era of the Thai owner in February 2013, when they were still competing in the Second Division. They were valued at around 28.7 million euros (24.8 million pounds sterling), 15 times less than what Manchester City was worth.

But the figure increased radically in September 2016, a couple of months after the coronation in the Premier, reaching 219 million; a year later, the team appeared for the first time in the Forbes magazine ranking as one of the 20 most valuable in the world, with an estimate of €338 million and being the eighth most expensive English club.

The effect was immediate after the title: Leicester increased its brand value from 2015 to 2016 by 132%, in addition to its sponsorship income from six million euros to 120, that is, 20 times more, according to analysis by Brand Finance.

Among the players there was also a boom in revaluations. Algerian Riyad Mahrez cost the club half a million euros in 2013 and was sold for 67.8 million to Manchester City in 2018, while Frenchman N’Golo Kanté cost nine million in 2015 and was sold to Chelsea for 35.8 million just one year then.

The star scorer, the Englishman Jamie Vardy, cost just 170 thousand euros when he arrived in 2012 and was priced at 20 million after the title, although to date he has not been sold.

And the Leicester effect continues. Although five years have passed since its Premier League championship, it continues to appear in the Forbes ranking within the Top 20 of valuable teams (19th place in the most recent, above Ajax), earns 154 million euros per year and in the last year increased his endorsement earnings from 16.2 million to 30.

The expansion is also global: the newspaper Marca found that there are fans of the Foxes in New Zealand and China, due to that emotional attachment generated by their history as champions, when they were the second least expensive squad in the Premier League and the odds were 5,000 to 1 to see them raise the cup.

“Leicester’s success is something their sponsors have only dreamed of, as their return on investment has been spectacular. The club will now need to carefully manage the avalanche of offers and opportunities it receives in order to maximize income and create partnerships that strengthen the brand”, recommended David Haigh, executive director of Brand Finance, after the success of 2016. They followed his advice and remain as one of the most powerful clubs in England and the world.

sports@eleconomista.mx