The recent wave of private equity investment in European football clubs and leagues is creating new opportunities to expand licensing, according to industry executives.

For most clubs and leagues, licensing and merchandising have been secondary to securing broadcast and sponsorship rights. In fact, licensing and merchandising accounts for less than 5% of annual revenue for most clubs. Notable exceptions include Manchester United FC and FC Bayern Munich (15-20% each) as well as West Ham United FC (10-15%). But this recent wave of new investors is more attuned to growing the oft-overlooked revenue stream, industry executives said.

A prominent new investor is U.S. billionaire Todd Boehly, who led the consortium behind the $5.3-billion acquisition of the U.K. Premier League’s Chelsea club. RedBird Capital acquired AC Milan, meanwhile, and State Street Partners agreed to invest $380 million into Real Madrid for a 30% stake in future stadium revenue minus season ticket sales,  but including product sales.

The newfound financial interest comes as the leagues and clubs work to recover from a pandemic that shut down most revenue sources aside from e-commerce, something that helped rekindle interest in licensing and merchandising. In its annual European Football report, Deloitte forecasted that revenue from Premier League teams would increase to $6 billion during the 2022-2023 season (up from $4.9 billion during the 2020-2021 season).

That anticipated growth will largely be driven by broadcast rights and ticket sales but will also include commercial revenue that encompasses licensing and merchandising (which is expected to account for 13% of total Premier League revenue).

Licensing is “at the very early stages of development because it hadn’t been a priority before, but there is pressure coming from new investors to monetize every potential revenue stream because fans move products,” said Bruno Schwobthaler, a former Warner Bros. executive and founder and CEO of Licensing for Growth, which works with football clubs and leagues. “The investment coming from the U.S. sees licensing and merchandising as a key revenue stream. It is not secondary anymore.”

This shift has led many teams to list openings for merchandise managers, Schwobthaler said. It has also resulted in a number of new partnerships. For example, video game publisher Electronic Arts, whose studios are developing the FIFA football title, recently signed a five-year partnership with Spain’s LaLiga for the title naming rights for all of the league’s competitions as well as a complete rebrand of LaLiga’s logos, graphics, font, and other visual elements.

And, in another sign of licensing taking a more prominent role moving forward, Fanatics has agreements with the Union of European Football Associations (UEFA) and the German Football Association to operate an online fan shop during events. Topps, recently acquired by Fanatics, also closed a deal for trading cards for two European football championships, including Euro 2024 in Germany.

“From a long-term perspective, licensing should be more important moving forward because we want to expand the league brand to the United States, China, and internationally,” said Henning Wegter, senior head of partner and sales at Deutscher Fußball-Bund (German Football Association).