Man Utd 'could have benefited from AIG collapse'
12 hours ago
LONDON (AFP) — Manchester United said it was "business as usual" Wednesday after its main sponsor was bailed out -- as experts said the club's global power could even have seen it profit from an AIG collapse.
In a week of turmoil in financial markets, insurance giant American International Group was handed an unprecedented 85-billion-dollar rescue loan Tuesday by the US Federal Reserve in a bid to avoid a new global economic shock.
AIG's shirt sponsorship deal with the European and English Premier League champions is the biggest in world football -- a four-year contract worth 56.5 million pounds signed in April 2006.
"It is business as usual for us," a spokesman for the Glazers, the American family which owns United, said Wednesday.
"Manchester United is financially strong. We have not been adversely affected by the credit crunch."
Indeed, the Red Devils' pulling power in the lucrative Asian and Middle Eastern markets is such that a knock-on disaster from AIG was never a realistic prospect.
Had the insurance firm sunk, "I don't think they (United) would have been overly concerned about it," Drew Barrand, head of media with analysts Sport Industry Group, told AFP.
"Because of the global commercial appeal that United have, you could interpret it that they wouldn't have minded if the deal had been terminated half-way through.
"It would have allowed them to go into the market again and negotiate for a new deal that potentially could have earned them more.
"Obviously they are looking to develop long-term relationships with their sponsorship partners. They have a very successful relationship with AIG and wouldn't want to rock the boat -- but it wouldn't necessarily have been a bad thing," Barrand added.
"For most clubs the sponsorship market at the moment is quite difficult but Manchester United is such a stand-out brand they would at least be able to match the AIG deal."
Barrand said it was not certain that AIG would maintain their contract with United, though the exposure it gives them and the likely punitive get-out clauses might deter them from pulling out.
Shirt sponsorship in professional English football dates back to Liverpool's 1979 tie-up with Japanese electronics firm Hitachi and it is rare to see a jersey without a company logo on it.
But when West Bromwich Albion faced West Ham United last Saturday, it was the first time since the Premier League started in 1992 that two opposing teams were forced to go without a shirt sponsor.
While West Brom are still looking for a new deal, the Hammers have felt the effect of the global economic downturn as their shirt sponsor went bust last week.
Holiday company XL Leisure Group were one year into a three-year deal worth 7.5 million pounds, though it is understood that the Hammers were owed only a small portion of that money.
West Ham players wore a patch over the XL logo.
Sponsors bring in about 20 to 25 percent of a club's income, but while the likes of Manchester United and Chelsea can pull in up to 15 million pounds a year, the average for teams outside the superclub echelon is around one million pounds a year and the likes of West Brom may struggle to get even that much.
Football clubs ideally want a long-term deal with a blue chip global brand that would help build the team's profile as well as its own, Barrand said.
And exposure in the Asia market for firms is "absolutely key to them" when sponsoring a major Premier League club.
"There's a huge fan base over there and huge potential to increase it," said Barrand.
While the fall of AIG could have earned the Red Devils even more money, the credit crunch may have an impact on middle-ranking clubs like West Ham.
"Overall in terms of the (sponsorship) trend, they're all thinking it's hit the ceiling," Barrand said.
"However, for the top four or five clubs, there appears to be no ceiling."
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