Manchester United, the reigning champions of the English Premier League and the Champions League, are having a pretty terrible week.
First, they lost a game over the weekend to hated rival Liverpool, their star player Christiano Ronaldo is out with an injury, and now they find out their main sponsor (who’s logo is emblazoned on all their gear) may be hitting the financial skids. Just in time for the release of their new ‘blue’ jerseys today. Ooo, bad timing.
Man United is still the world’s most valuable sports franchise, worth over $1.8 billion (ahead of Real Madrid, all the NFL teams, and the NY Yankees), and accordingly they hold the record for most valuable team sponsorhip with an AIG jersey deal worth over $100 million (56 million British pounds).
It was a four year deal, and United are only halfway through the life of it. Now take into account the disaster that AIG is becoming and we’ve got a tricky situation on our hands.
AIG looks like it may become the next, and possibly most dangerous, victim of the same credit crunch crisis that killed Bear Stearns and Lehman and also forced Merrill Lynch to sell to Bank of America. On Monday AIG stock lost 60% of its value, and then today it appears to be down 36%. The federal government is reluctant to offer billions of dollars of emergency loans to help the company, but is more than willing to ask Goldman Sachs and JP Morgan to come up with $75 million to help AIG avoid bankruptcy. In this financial climate, how is it possible those guys have that extra cash lying around?
So as the fate of AIG hangs in the balance, United are asking seemingly trivial questions, like ‘Who will be on our shirts?!’
Simon Chadwick, a professional British dude and professor of sports business at Coventry University, told the Daily Mail that this could work out well for United:
‘It may be an issue outside the Premier League but my view is that if Manchester United do have to find a new sponsor, they would almost certainly pay as much and quite probably more.
‘United are currently European champions and Premier League champions, so they
could not be in a better position.
‘The issue for United would be finding the right sponsor with a global operation as a partner, to give the club global coverage, something AIG does perfectly at the moment.’
And don’t worry too much, they’ve still got that massive Nike deal to be happy about.
But at least someone will be happy to hear some good news related to the credit crisis. Maybe all the uninsured people who were previously with AIG can become big Man United fans now?
DailyMail: United, AIG sponsorhip, September 15, 2008