Smaller European clubs to suffer from downturn

European football clubs that are not bankrolled by wealthy owners are feeling the pinch from the economic downturn and could suffer further, at least in the medium term, as sponsorship and ticket sales fall.

This season shirt sponsorship revenue in England's Premier League fell for the first time in its 16-year history to £67 million from about 75 million a year earlier.

Advertising budgets have also been trimmed as companies cut back on spending, while rising ticket prices and pressure on consumer spending has led to some supporters staying at home.

"I don't think we have ever had this situation before... it is indicative that the economy is in recession," said Rory Miller from the sports business unit at Liverpool University.

Analysts believe the largest clubs, such as English champions Manchester United and Spanish title holders Real Madrid, will always attract sponsors and fans, but that smaller clubs should look closer to home for support.

"I don't think Man. United would have much trouble finding a new sponsor, likewise Chelsea, Arsenal and a handful of other top clubs," said Gary Leih, the chairman and chief executive of advertising's Ogilvy Group UK.

"But if you're a team struggling in one of the lower leagues, sponsorship is going to be harder to come by.

"What I think we will see here is sponsorship by local brands," he said.

"Brands coming together with a local football team can generate enormous amounts of goodwill."

The English Premier League is Europe's richest with revenues exceeding £1.5 billion in 2007, but only eight of its 20 clubs turn an operating profit.

Question marks have been raised in recent weeks over the future of Manchester United's British record £56.5 million agreement with American International Group after the insurance company's bail-out by the US government.

Fellow Premier League club West Ham United are without a shirt sponsor following the collapse of tour operator XL Leisure Group and promoted West Bromwich Albion has also failed to find a replacement for Deutsche Telekom's T-Mobile.

Newcastle United was close to losing its shirt deal with Northern Rock bank and Lazio, traditionally Italy's sixth-largest club, are also without a shirt sponsor.

If the US government pulled the plug on AIG and European champions Manchester United had to find a new sponsor, analysts and experts said the club's global appeal meant it was unlikely to have any problems getting a new deal.

"Manchester United is a great product, but in any market when there is a crunch, they shouldn't be complacent. I would be working hard on finding possible replacements," Pippa Collett, managing director of Sponsorship Consulting said.

Ticket prices have also shot up in recent years, leaving some teams to play in stadiums with rows of empty seats. Most analysts are confident the beautiful game can weather the storm, but agree the impact of the economic slowdown on television advertising revenues will be a key indicator.

"Sponsorship deals are plan-ned in advance and usually last not less than three years. But if the actual crisis persists, we may have an impact in the long term," Giovanni Palazzi, president of Italy-based StageUp sport business research said.