Manchester expects to make about $559 million with GM sponsorship by 2021

Article by Christian Andrei, on August 5, 2012

Manchester United Ltd. expects that its General Motors Co. sponsorship agreement will make about $559 million until the year 2021. Under the sponsorship deal, the Chevrolet logo will be seen on the soccer team's jerseys starting in 2014. As part of the deal, GM will release payments amounting to around $18.6 million in fees for the seasons this year and the next.

In 2014, $70 million will be paid by GM. The payments will increase by 2.1% for each season that follows. According to Nigel Currie, managing director of U.K.-based marketing adviser BrandRapport, GM's deal with Manchester United is the highest in soccer. Currie was successful in negotiating one of the previous shirt sponsorship contracts of Manchester United with Vodafone Group.

Manchester United's existing shirt contract with Aon Corp. ends that year. That contract has a value of about 80 million pounds ($125 million) over four seasons. Insiders said that GM ousted Joel Ewanick, its chief marketing officer, after company officials expressed doubts about the propriety of the Manchester United deal. Ewanick resigned since he failed to meet what the company expected of its employees.

The pressure is now on GM Chief Executive Officer Dan Akerson, who has headed several senior leadership changes at GM. Ewanick had divulged marketing decisions that are meant to save $2 billion over five years as part of Akerson's campaign to improve operating margins.

Manchester United's deal arrives as the soccer team hopes to raise up to $333 million in a U.S. initial public offering. In a July 30 regulatory filing, it was revealed that the company and its selling shareholder, the Glazer family, are offering 16.7 million shares at $16 to $20 each.

Topics: gm, sponsorship

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