The decision of General Motors Co. to withdraw its popular Chevrolet brand from Europe has made its very expensive sponsorship deal with Manchester United look like a loser. GM announced in 2012 that it inked a seven-year sponsorship agreement that entails the carmaker shelling out $559 million to have Chevrolet’s bowtie logo on the jerseys of "Man U" players.
The move and the high price had turned heads. Now that GM is planning pull out Chevrolet from Europe by the end of 2015, the Man U endorsement is considered an overpay, since the club’s players will be bearing a logo on their jerseys for a brand that is not selling its products in the region. "Understand what this sponsorship deal is all about - it's eyeballs,” Gary Fechter, an attorney who has represented companies in sponsorship deals for 35 years, told Reuters.
“They're leaving a big patch of geography with lots of eyeballs so the economic value has to go down," he said.
While Chevrolet has been considered an iconic brand in the United States for a long time, it never was popular in Europe, no thanks to the region's stiff competition and an economic slowdown. GM is now planning to focus on growing its Opel and Vauxhall brands in Europe, instead of Chevrolet.
GM, however, still sells Chevrolet products in most other markets around the world. Jim Andrews, senior vice president with IEG, a WPP Plc unit that tracks sponsorships, told Reuters the Man U sponsorship deal still holds promise for GM in emerging markets where the club is very popular, although its value took a hit with the exit from Europe.