SBD/November 15, 2012/Marketing and Sponsorship

Manchester United Seeking To "Dramatically" Increase Value Of Kit Deal With Nike

ManU's kit sponsorship currently valued at approximately US$1.58B
EPL club Manchester United "left Nike under no illusions yesterday that the sports merchandising giant will have to increase the value of its kit deal dramatically if it is to remain in partnership," according to James Ducker of the LONDON TIMES. Nike, whose US$480M, 13-year kit deal with ManU expires in '15, has "an exclusive six-month window from February in which to negotiate a new contract with the club." ManU is "confident of securing a new kit deal that will be unprecedented in its scale" for a soccer club. ManU Vice Chair Ed Woodward has "made no secret in recent months of his belief that the present Nike deal is substantially undervalued." Woodward "would not be drawn on the sort of figure United are seeking," but previous estimates that put it at about US$1.58B would "not appear to be an unrealistic target." Woodward said, "We feel we know, with some clarity, the value of our rights, and we are bullish about the abundance of opportunities available to accelerate the growth of this business" (LONDON TIMES, 11/15).
SEEKING FAIR DEAL: In London, Ian Herbert writes, "When the present deal was negotiated in 2002, United were a publicly floated company and preferred to take as much risk as possible away from any sponsorship tie-up." It meant a profit-share arrangement was "put in place which ensured United received only a proportion of the cash generated from worldwide shirt sales in exchange for a guaranteed sum" (London INDEPENDENT, 11/15). The FINANCIAL TIMES' Roger Blitz notes ManU is "backing plans for the Premier League to adopt its own version of Uefa's financial fair play regulations to improve the finances of English football's top-tier clubs." EPL clubs today will "renew discussions on options to introduce cost controls across all 20 clubs." ManU is "unlikely to support measures being mooted among some clubs to control wages" (FINANCIAL TIMES, 11/15).
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