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SBD Global/March 12, 2013/Marketing and Sponsorship

ManU, Nike In 'Detailed Talks' Over What Would Be World's Biggest Sponsorship

ManU, Nike are discussing a potential historic sports sponsorship deal.
ManU "may still be smarting from its eviction" in the Champions League, but the club "is hoping to recover financially with what could be the most valuable sponsorship deal in sporting history," according to David Robertson of the LONDON TIMES. Insiders said execs from ManU and Nike will "begin detailed talks" on the merchandising and sponsorship contract "imminently." ManU signed a 13-year deal with Nike in '02 that was worth £303M plus 50% of profits from merchandise sold. The deal is "forecast to be worth" approximately £38M ($56.7M) this season. Although the existing contract does not end until '15, Nike and ManU have "just entered a six-month exclusive renegotiating period." Sources said that Nike was "likely to try to complete a deal during the exclusivity period." N.Y. investment bank Jefferies Int'l has "estimated that the new arrangement could be worth" £61M ($91M) to ManU next year. Financial services firm Nomura believes that it could be worth £74M ($110M). It was suggested last year that ManU was looking for a 10-year deal with Nike worth £1B ($1.5B), but "this may be ambitious if rumours about the club’s recent underperformance at the cash register are true." Insiders said ManU's merchandising revenue "has been surpassed by Barcelona and Real Madrid and this could have implications for the Nike deal." A Wall Street source said, "United’s performance has lagged some of the other top European clubs and that has been reflected in merchandising sales. This is likely to be reflected in the sponsorship deal. Talks on the new deal will be a delicate mating dance" (LONDON TIMES, 3/11).

RONALDO ON RADAR: In London, Ian Ladyman reported ManU officials "discussed a deal" to bring back Real Madrid's Cristiano Ronaldo at a meeting with Nike Friday. They were "due to discuss extending their sponsorship deal," and also on the agenda was the subject of funding a bid to sign Ronaldo (DAILY MAIL, 3/8).
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