Manchester United says GM agreement will generate $559 million
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LONDON (Bloomberg) -- Manchester United Ltd. said its General Motors Co. sponsorship agreement will generate $559 million through 2021.
Under the sponsorship, the Chevrolet logo will be placed on the soccer team's jerseys beginning in 2014.
As part of a deal, GM will pay about $18.6 million in fees for each of the seasons this year and next, according to a filing on Friday.
GM will pay $70 million in 2014, with the payments rising 2.1 percent each following season, the soccer club's filing said.
Nigel Currie, managing director of U.K.-based marketing adviser BrandRapport, said GM's deal with Manchester United is the richest in soccer. Currie negotiated one of Manchester United's previous shirt sponsorship contracts with Vodafone Group.
"It's incredible, unbelievable," Currie said in a telephone interview of the GM deal.
Manchester United's current shirt deal with Aon Corp. ends that year. That contract is worth about 80 million pounds ($125 million) over four seasons.
GM ousted Joel Ewanick, its chief marketing officer, after company officials questioned the propriety of the Manchester United deal, people familiar with the matter have said.
Ewanick resigned because he didn't "meet the company's expectations of an employee," according to an e-mailed statement by GM on July 29.
Ewanick's departure places greater pressure on GM Chief Executive Officer Dan Akerson, who has overseen several senior leadership changes at the automaker. Ewanick had announced marketing moves aimed at saving $2 billion over five years as part of Akerson's push to improve operating margins.
Manchester United's deal comes as the soccer team seeks to raise as much as $333 million in a U.S. initial public offering. The company and its selling shareholder, the Glazer family, are offering 16.7 million shares at $16 to $20 each, according to a July 30 regulatory filing.
United, whose players include England's striker Wayne Rooney and Welshman Ryan Giggs, is scheduled to price the U.S. IPO on Aug. 9, according to data compiled by Bloomberg.
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