Has GM’s Deal With Manchester United Lost Its Kick?
General Motors’ (NYSE:GM) decision to pull the Chevrolet brand from Europe might be somewhat problematic for GM’s sponsorship of Manchester United (NYSE:MANU) after the automaker announced in 2012 that it would be spending $559 million over seven years for the rights to stick the Chevy bow tie badge on the jerseys of Manchester United’s soccer players. However, GM is now planning to have largely removed Chevy from the region by next year — effectively making the arrangement with Manchester an empty sponsorship.
“Understand what this sponsorship deal is all about — it’s eyeballs. They’re leaving a big patch of geography with lots of eyeballs so the economic value has to go down,” said Gary Fechter, who is an attorney who has represented companies in sponsorship deals for 35 years, but is not involved in GM’s deals, told Reuters. General Motors is pulling the Chevy-brand vehicles in the region to better focus on the Opel and Vauxhall nameplates, both of which have been struggling along with the near-stagnant European auto market.
However, Jim Andrews, who is the senior vice president with an IEG unit that tracks sponsorships, said that the deal still holds promise for GM in emerging markets, where Manchester United is popular; however, “the value took a hit with the exit from Europe,” Reuters reported. “I would not classify it as a bad deal, but if you could rewind the clock, knowing that you’re not going to be marketing the Chevy brand in Europe, would you do this deal at that price?” He told Reuters. “I think the answer is clearly no.”
However, soccer’s global status has GM standing behind its decision to sponsor Manchester United. ”Anyone who’s ever lived in Europe or understands Europe will know that there is not a high proportion of Germans that support English soccer clubs. They follow the Bundesliga” or German professional soccer league, said Alan Batey, GM’s North American chief, at the Detroit auto show earlier this week.
Batey is also GM’s global head of the Chevy brand. He added that, “We never, ever did this for Europe,” he added. “We did this because frankly soccer is the sport of the world. We really did this for our emerging markets, particularly China and Asia.”
Manchester United agrees with GM’s side, perhaps not surprisingly. Half of its 659 million followers globally are in Asia, including 108 million in China, the club says. About 173 million more are based in the Middle East and Africa, and 71 million in the Americas, while only 90 million are actually in Europe. “Chevrolet are very clear that the partnership with us is a global one and we both intend to continue this partnership to help build their brand around the world,” Manchester spokesperson Phil Townsend said.