Bloomberg News

Manchester Utd. Signs 7-Year Jersey Contract With GM

July 30, 2012

General Motors Co. (GM:US) signed a seven- year contract to have its Chevrolet brand displayed on English soccer team Manchester United’s jerseys a day after GM’s marketing head quit for failing to meet expectations.

The world’s largest carmaker, which dropped its Super Bowl sponsorship in May, will start its contract with the 19-time English soccer champion in 2014, according to a statement. The terms weren’t disclosed. Insurance company AON Corp. pays 20 million pounds ($31 million) a year for its logo to appear on the team’s red shirt under its current accord.

The deal, coming as United prepares for an initial public offering in the U.S., builds on a five-year contract announced in May for Detroit-based GM to be the soccer’s team’s official carmaker. GM unveiled a similar agreement with United’s English rival Liverpool on July 24.

“We have been partners with Chevrolet for only six weeks, but already they have produced some fantastic ideas that will benefit both the partnership and our 659 million followers around the world,” Richard Arnold, United’s commercial director, said in the statement.

The contract is the latest success for United’s marketing team, which reorganized itself in 2008. Since then the value of its commercial operation has grown to more than 100 million pounds from 40 million pounds. The club has sales offices in Manchester, London and Hong Kong, a location where it considered a listing to raise $1 billion. It also sought to raise the cash in Singapore before canceling those plans and focusing on the U.S.

Ewanick Resigns

In a preliminary filing announcing its equity sale plans this month, the team said it would use any money to pay off its debts. The club has spent more than 500 million pounds in interest and fees connected to the 2005 leveraged buyout by the Glazer family who took control for 790 million pounds. Its net debt remains at about 450 million pounds.

GM Chief Marketing Officer Joel Ewanick resigned because he didn’t “meet the company’s expectations of an employee,” the automaker said yesterday in an e-mailed statement.

Under Ewanick, 52, GM decided in May to end advertising on Facebook Inc. (FB:US) after a regular spending review. GM began discussions about resuming ads on the social-network website, two people familiar with the talks said this month. Ewanick also decided not to advertise during the National Football League’s Super Bowl championship game next year on CBS.

The former GM executive told reporters when the first United deal was announced that the Super Bowl had become too expensive, saying “enough is enough, you have to pull back.”

“Manchester United’s statistics are impressive, but this relationship goes far beyond the numbers -- this relationship is about connecting our brand with the deep-seated emotion that surrounds the team everywhere it goes,” Alan Batey, General Motors’ North America vice president, U.S. sales and service, said today in the statement.

To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net


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