This song is about guys who go to a club after work, listen to music and have a good time. They are there for the music, and not for the image presented by the band. The song was a marked change from the waning disco style and the nascent punk movement.
Group leader Mark Knopfler got the idea for song this from watching a lousy club band perform. As the story goes, Knopfler was in Ipswich on a rainy night. He ducked into a bar where a mediocre band was closing out the night to an audience that was maybe four or five drunks unaware of their surroundings. The hapless band ended their set with the lead singer announcing, with no apparent irony, "Goodnight and thank you. We are the sultans of swing." Said Knopfler: "When the guys said 'Thank you very much, We are the Sultans of Swing,' there was something really funny about it to me because Sultans, they absolutely weren't. You know they were rather tired little blokes in pullovers." Knopfler got a lot of songwriting ideas from observing everyday people, something that got harder to do when he became famous.
This was Dire Straits' first single. It was one of five songs on a demo tape they used to get their record deal. The tape got played on London radio and started a bidding war for the band.
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