Manchester United Land $100 Million Sponsorship Deal

Manchester United, one of the world’s largest club soccer teams, has locked down a four-year sponsor, insurance and financial services giant American International Group (AIG), to the tune of £56.5 million ($99.3 million), or £14.1 million ($24.7 million) each year . The deal with the New York-based American International Group comes just days after talks broke down between Manchester United and Mansion, a betting company.

The American International Group’s AIG logo will take the place of Vodafone, which has been emblazoned on the Manchester United jerseys since 2000. AIG will become only the third corporate sponsor on the Man U jersey since corporate sponsorship was condoned back in 1982. Before AIG and Vodafone, Japanese electronics giant Sharp dominated the Manchester jerseys for 18 years. The new AIG-Manchester United Jerseys will be manufactured by Nike

Vodafone had pulled their sponsorship of Manchester United in favor on sponsoring UEFA’s Champions League next year. The Red Devils were looking for a sponsorship deal that would help potentially land Manchester United the most lucrative sponsorship deal in European club team history. Instead, they will slot in one being Turin, Italy’s powerhouse club, Juventus, which has a 5 year, €110 million ($134 million) deal with the Libyan Oil company, Tamoil. Man U will come in just ahead of Real Madrid’s new sponsorship deal with BenQ, which will begin in 2006 at £14 million ($24.5 million) per year. In England, Manchester United will take the forefront of sponsorship deals, surpassing rival Chelsea’s current deal with South Korean cellular phone company, Samsung Electronics, which pays out £50 million ($87.5 million) over five years. By comparison with their previous contract, Manchester stand to make 57% more than they did with the £9 million ($15.7 million) per year they made with Vodafone.

Reaction to the sponsorship deal seemed to be very positive on all fronts. A positive and large sponsorship deal was just what Manchester United needed, following the £790 million ($1.4 billion) buyout of the English club by American billionaire Malcolm Glazer. Glazer, owner of the NFL’s Tampa Bay Buccaneers, bought the team last year and promptly took the company private. The buyout, which was unpopular with many fans, and the loss of Vodafone as a sponsor, left the club’s image tarnished. It is widely felt that this new deal with AIG will go a long way to shoring up the club’s image. As Reuters.uk quotes Man U’s commercial director Andy Anson as saying “I think the time Vodafone pulled out, that (the takeover) was still casting a shadow over everything that was going on here and that coupled with the performances on the pitch meant there was a lot of negativity. When people see this and the size of this deal, and the type of deal we done just adds to the feel-good factor and hopefully the fans will think is a great deal for us.

TheBBC quoted Manchester United’s coach Sir Alex Ferguson as saying “The financial foundation will benefit the club as a whole and we can look forward to years of progress through that. But for me it's always going to be about how we can improve the team and nothing changes in that respect.” As for Manchester’s Chief Executive, David Gill, Forbes quoted him as stating “We are delighted to begin our relationship with AIG. This is a deal that is right for Manchester United. It underlines our position as the world’s leading club.”

As for American International Group, the world’s fourth-largest firm with 97,000 American employees and $108.9 billion in revenues in 2005, was very pleased to land the sponsorship agreement with Manchester United. AIG’s President and Chief Executive, Martin J. Sullivan, told Forbes, “We believe this relationship will mutually benefit both organizations and we look forward to maximizing the value of this high-profile sponsorship to help grow AIG’s businesses around the world.” AIG currently has 250,000 employees in Asia, where the company originally came from, and still has strong roots. AIG hopes to grow Manchester United’s popularity in Asia, along with its own, as 40 million of Manchester’s 100 million worldwide fans are in Asia. It is also the hope of Manchester United to see the AIG logo help back seats at Old Trafford, and grow their fan base locally as well as internationally.

The Manchester United-AIG partnership, which is rumored to have been brokered with much help from Bryan Glazer, will go into effect this summer. Manchester United are currently in 2nd in the English Premiership, seven points behind Chelsea.

[Additional Sources: Reuters.uk, BBC, Forbes]