ManU Reaping Benefits Of Sponsor Deals To Bring In High Commercial Revenue

EPL club Manchester United’s commercial revenue “is now approaching an astonishing” $204M (all figures U.S.) a year and “will only continue to rise,” according to Laurie Whitwell of the London DAILY MAIL. There are “no fewer than 32 companies listed as sponsors of the club on their official website and this does not even include three -- somewhat peculiar -- deals announced this month.” First there was “the tie-up with Indonesian tire manufacturer Multistrada on January 7, then came Wahaha, a Chinese soft drinks producer, a week later, and on January 18 we heard Japanese paint manufacturer Kansai had become the club’s first ‘paint partner.’” Each contract will run for three years, and business experts speculate they are worth between $1.6-3.1M annually. These are the “types of deals staff in United’s recently-opened office in Hong Kong are striving to sign; brands specific to regions.” There also is the club’s shirt sponsorship with Chevrolet, "which will come into effect from 2014.” At the start of that season it will be worth $69M a year, "increasing by 2.1 per cent annually to 2021 -- totalling an incredible” $559M. These numbers “do not make it into United’s current take home from sponsorship," but the $18.9M Chevrolet has paid to "have its logo on the Old Trafford dugout seats this season does.” Aon pays United $31M a year “to sponsor the shirt currently," while DHL since '10 has paid $16M a year "to feature on the team’s training kit.” In addition, it costs Nike around $40M “to supply United’s kit each season but talks will begin next month over a new deal which should dwarf that amount.” Brand Finance Valuation Dir David Chattaway, whose company “worked with United on a consultancy basis a few years ago," said that there was "plenty of mileage left in sponsorship deals and suggested Australia and USA would be the next markets targeted” (London DAILY MAIL, 1/29). Meanwhile, ManU today announced that Singha has renewed its deal as the official beer partner of the EPL club. The original three-year agreement is extended by another three years to '16 (ManU).

MANCHESTER UNITED CLUB SPONSORS
SPONSOR	CATEGORY	ANNUAL VALUE (USD)
Nike	Kit supplier	$40M
Aon	Shirt sponsor	$31M
Chevrolet	Auto	$18.9M
DHL	Logistics	$15.7M
Hublot	Timekeeper	$6M
Bwin	Online game and betting	$3.8M
Singha	Beer	$3M
Casillero Del Diablo	Wine	$3M
Thomas Cook	Travel	$2M
Smirnoff	Responsible drinking partner	$1.6-3M
Toshiba Medical Systems	Medical	$1.6-3M
STC	Integrated telecommunications (Saudi Arabia)	$1.6-3M
PCCW	Integrated telecommunications (Hong Kong)	$1.6-3M
Turkish Airlines	Airline	$1.6-3M
Epson	Office equipment	$1.6-3M
Mister Potato	Savoury snack	$1.6-3M
Yanmar	Global	$1.6-3M
TM	Integrated telecommunications (Malaysia)	$1.6-3M
Globacom	Integrated telecommunications (Nigeria, Ghana, Benin)	$1.6-3M
Viva Kuwait	Integrated telecommunications (Kuwait)	$1.6-3M
MTN	Integrated telecommunications (South Africa, Zambia, Rwanda, Uganda, Swaziland, Botswana)	$1.6-3M
Airtel	Integrated telecommunications (India, Sri Lanka, Seychelles, Bangladesh)	$1.6-3M
Zong	Integrated telecommunications (Pakistan)	$1.6-3M
Globul	Integrated telecommunications (Bulgaria)	$1.6-3M
Mamee	Noodles (Asia, Oceania, Middle East regions)	$1.6-3M
Viva	Integrated telecommunications (Bahrain)	$1.6-3M
Turk Telekom	Integrated telecommunications (Turnkey)	$1.6-3M
A.P. Honda	Motorcycle (Thailand)	$1.6-3M
Airtel Africa	Integrated telecommunications (Burkina Faso, Chad, Democratic Republic of the Congo, Gabon, Kenya, Madagascar, Malawi, Niger, Sierra Leone, Tanzania, Republic of the Congo)	$1.6-3M
Beeline	Integrated telecommunications (Vietnam, Cambodia, Laos)	$1.6-3M
Bakcell	Integrated telecommunications and broadcast partner (Azerbaijan)	$1.6-3M
Kagome	Soft drinks (Japan)	$1.6-3M
Wahaha	Soft drinks (China)	$1.6-3M
PT Multistrada	Tire	$1.6-3M
Kansai	Paint	$1.6-3M

MONEY, MONEY, MONEY: FORBES.com's Mike Ozanian reported ManU has become "the first sports team in the world" with a $3B valuation. Shares of the club, which were offered to the public last August at $14, "did poorly at first but have soared the past few days," closing at less than $17. The recent increase in its stock price has pushed up the club's enterprise value (equity plus debt) to $3.3B, the "highest value of any team in the world." The second most valuable sports team in the world is the Cowboys, worth $2.1B (FORBES.com, 1/27). The MANCHESTER EVENING NEWS noted the valuation "means a huge increase in the overall wealth of the Glazer family," who has a controlling interest in the club, and billionaire investor George Soros -- the 22nd richest person in the world -- who bought a 7.5% stake in ManU. The club's commercial growth "appears to be driving the share price up, with the club announcing several new sponsorship deals since August" (MANCHESTER EVENING NEWS, 1/28).