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Sponsorship deal lifts Manchester United

The Associated Press

Shares of Manchester United rose Monday after the soccer club's big new sponsorship agreement reassured investors of its ability to make money from its globally popular brand.

THE SPARK: Manchester United secured an eight-year sponsorship deal with insurance firm Aon over the weekend. The estimated $230 million deal begins in July and gives Aon naming rights to the club's training grounds and puts its logo on its training kits.

THE BIG PICTURE: The financial strength has been matched on the field this season, with United close to regaining the Premier League trophy from Manchester City. Forbes said in January that United's enterprise value, which subtracts debt from equity value, has risen to $3.3 billion, the highest for any sports team in the world.

THE ANALYSIS: Jefferies analyst Randal Konik said that the deal shows the strong appeal of the Manchester United brand and the company's ability to make money from it. Konik said the deal is a big plus for the company and reiterated his buy rating on its stock and $23 price target.

He reiterated his "Buy" rating on the stock.

Konik expects a higher mix of sponsorship revenue will improve the company's margins and sees the company as one that is still in an early growth stage.

SHARE ACTION: Shares of Manchester United increased more than 2 percent to $17.07 by midday Monday. Its shares are nearing the upper end of their 52-week trading range of $12 to $19.34. They're above the $14 price from the club's initial public offering last August.