Man Utd still tops sponsors' league after poor season

Reuters

* Adidas has offered upwards of 60 mln pounds a season -source

* Adidas's 10-year deal will replace Nike from 2015

* Man Utd's commercial appeal has survived a poor season

* Its sponsorship deals are priced about twice rivals'

By Keith Weir

LONDON, July 11 (Reuters) - A wretched season and exile from European soccer's top club competition have done nothing to dim Manchester United's commercial appeal, with the team set to sign a sportswear deal with Adidas worth twice what rivals have been earning.

That partnership and a shirt sponsorship with car brand Chevrolet, which also set a new benchmark for the sport, will help to underwrite the rebuilding of the team under new manager Louis van Gaal.

Negotiations for a new kit supply deal were a test of United's marketing muscle after a season in which the team won nothing and finished too low in the Premier League even to qualify for the lucrative European Champions League.

The normally bullish Nike pulled out of contract renewal talks, saying that the price had gone too high and signalling an end to a partnership dating back to 2002.

A source with knowledge of the negotiations said rival Adidas had offered upwards of 60 million pounds ($102 million) a season for a 10-year deal that will see it replace Nike from 2015.

The current Nike deal was worth 38 million pounds to United in 2012-13, including a share of the earnings from the sale of shirts and other merchandise to fans around the world.

United, majority owned by the American Glazer family and listed on the New York Stock Exchange, are determined to ensure that last season was a one-off failure and have replaced manager David Moyes after a short and unhappy tenure.

"Brands are about the history and the promise that will continue into the future," said Peter Walshe, a global account director with marketing company Millward Brown.

"There is a lot of excitement about the future after the disastrous handover to Moyes," he added. "It shows the United brand is bigger than one decision or individual."

GLOBAL FAN BASE

English champions a record 20 times, United have built up a huge global following over the decades thanks to players like George Best, Eric Cantona and David Beckham.

Just before their stock market flotation in 2012, United produced a survey showing they had 659 million global followers - not far short of one in 10 of the population.

That appeal helped persuade General Motors to put its Chevrolet brand on the team's red shirts in a deal worth $559 million that will run until 2021. As with the sportswear sponsorship, that was double the going rate for most major European teams.

"The key thing here is the increasing power that the brand has internationally," said Andy Sutherden, global head of sports marketing and sponsorship at communications firm H+K Strategies.

"The pool of fans from all over the world is the asset that they sell," he added.

Indeed, the focus for General Motors will be the Asian markets where United is popular, as the car maker is pulling the Chevrolet brand out of European markets.

United this week launched their new red shirts bearing the Chevrolet logo, a kit that will be the last one featuring the Nike swoosh and will be worn through the 2014-15 season.

For Adidas, the United deal fits with a strategy of defending market leadership in soccer against the advances made by larger American rival Nike, which has been involved in the sport for only two decades.

"If you can keep out a key rival that is worth a lot more to you rather than just the positive value of having that brand," said Millward Brown's Walshe.

United fans on social media reacted positively to the prospect of Adidas returning as kit supplier, reviving a partnership from the 1980s.

Nike had the right to match the bid from its rival, but walked away, saying it did not offer good value for shareholders.

More than 2 million United shirts are sold every year, which will help Adidas to recoup its investment, provided the team can return to the top of the European game.

That is where Dutchman Van Gaal comes in, fresh from taking a workmanlike Netherlands team to the World Cup semi-final this week.

Just as importantly, he appears to have some of the aura of former manager Alex Ferguson, who retired last year after winning 13 Premier League titles in two decades.

"What van Gaal has done with the Netherlands whets the appetite of fans and sponsors alike," said Sutherden.

"He has done enough with Holland to show he is a manager who will create a positive and immediate impact." ($1 = 0.5877 British Pounds) (Writing by Keith Weir; Editing by Will Waterman)

Rates

View Comments (6)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Our Best-Ever Value Plan for Your Business

    New prices on our Mobile Share Value Plans on the nation's most reliable 4G LTE network.

    AdChoicesAT&T® Small BusinessSponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Life Insurance Doesn't Have To Be Complicated

    We'll help you understand the basics. Create your personalized estimate with USAA Life Insurance Company. Life brings obstacles, We bring advice.

    AdChoicesUSAASponsored
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • Start a Family Tradition of Savings with USAA

    USAA auto insurance rates beat the competition 4 out of 5 times. When you switch to USAA you can save an average of $426 a year. Get a quote today.

    AdChoicesUSAASponsored
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…

    Credit.com
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • Play

    Tues., Sept. 16: Watch Humana Stock

    Humana, Global X Social Media Index ETF and Majesco Entertainment are among stocks to watch. WSJ's Chris Dieterich discusses the details with Michael Casey. Photo: Humana

    WSJ Live