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Volume 10 No. 22

Marketing and Sponsorship

Global nutrition company Herbalife has announced that it will become the official nutrition sponsor of int'l football player Cristiano Ronaldo. The five-year, multi-million dollar contract includes global publicity rights and various joint promotional activities. It also includes the opportunity for Herbalife and Ronaldo to work together to develop a new co-branded range of sports nutrition products. Ronaldo joins more than 100 other Herbalife-sponsored athletes, including a number of football teams around the world, such as MLS L.A. Galaxy in the U.S.; FC Pumas in Mexico; Brasileiro club Botafogo; Russian Premier League side Spartak Moscow; and the national teams of Belgium and Venezuela (Herbalife).

Man City has agreed to a new three-year partnership with South African side Mpumalanga Black Aces FC. The club will become Man City's official regional school of football partner. Man City will deliver coaching programs to South African children as part of the deal (Man City). In Manchester, Mike Keegan reported Man City "will send coaches to South Africa and will no doubt get first option on any rising stars." Teams from the club’s youth set-up "will also jet out to play friendlies against their Black Aces counterparts" (MANCHESTER EVENING NEWS, 6/4). Man City elite Development Squad Head Patrick Vieira said, "It's a privilege for Manchester City to be part of South Africa's youth football development by passing on our expertise to the Black Aces coaches, at a time when the country is fast becoming a force in world football" (ALL AFRICA, 6/3).

Real Madrid, the world's most valuable sports team ($3.3B), "has signed a new shirt sponsorship deal with Emirates" that will pay the team $39M annually for five years starting next season, according to Mike Ozanian of FORBES. The deal with the Dubai-based airline "sells Real Madrid short." Yes, Los Blancos will see a 30% increase "over what current shirt sponsor Bwin paid." But the price does not match up "with the shirt deals" for ManU and Barcelona. ManU "will get an average of" $80M a year from Chevrolet. Barcelona "has a five year deal with the Qatar Foundation" worth $44M (FORBES, 5/31).

 Team  Sponsor Avg. Annual Value 
 ManU  GM (Chevrolet)  $80M
 Barcelona  Qatar Airways  $45M
 Bayern Munich  Deutsche Telekom  $40M
 Real Madrid  Emirates  $39M
 Liverpool  Standard Chartered  $31M

As Under Armour prepares to expand overseas, the company "is stepping onto a rougher playing field," according to Kyle Stock of BLOOMBERG. Selling jerseys, workout shirts, sneakers, and cleats outside the U.S. "doesn’t take rocket science; it just takes the cash required to sponsor pro teams and marquee events." For ages, adidas and Nike "have been locked in a spending arms race." Puma "was in the hunt for a while, but it faded in recent years" as it shifted some marketing focus from athletes to artists. The company issued two profit warnings in the past year and posted a 32% drop in income for the most recent quarter. Under Armour "does a lot of things well." However, the Baltimore-based company has "built its brand organically" -- largely without "big, splashy marketing campaigns." Indeed, Under Armour’s "value-bent marketing is one reason that shares of the company have done so well." Even though Nike consistently posts better results in metrics that matter to investors -- namely, return on equity and return on assets -- Under Armour's price-earnings ratio "suggests that investors value it much more highly than they do Nike." Under Armour "may be able to pick its spots abroad to generate some of the grassroots success it has cultivated" in the U.S. The company has already signed on as an official supplier of the U.S. women’s and men’s gymnastics teams for the next two summer Olympics. Then again, that "won’t help it" in the $5B global football market. Analysts "are worried" that the cost of int'l expansion "will serve as a drag on Under Armour’s otherwise-impressive performance" (BLOOMBERG, 6/4).

The Qatar National Bank "has renewed its sponsorship deal" with Ligue 1 Paris St. Germain. The extension will start at the beginning of the '13-14 season and "will include placement of the lender’s logo on the sleeves of the team’s jersey, as well as other branding around the Parc des Princes Stadium" (ARABIAN BUSINESS, 6/4). ... Chelsea has agreed to a three-year sponsorship deal with Thailand-based Nitto Tire that will see them become the club's official tire supplier in Thailand. Nitto Tire will become involved in community football clinics at Bangkok's Chelsea FC Soccer School, meet and greets with Chelsea FC players and joint roadshows with other club partners in Thailand, including Samsung, adidas and Singha (Chelsea). ...  Samsung will be the sole sponsor of the Royal Rowing Regatta, to be held next weekend "to celebrate the 60th anniversary of the Queen's Coronation" (THE DRUM, 6/3). ... BBVA bank and the Spanish Football League (LFP) have set a date for the official presentation of their agreement to renew the sponsorship that ended March 8. The announcement will take place on June 11 in N.Y. LFP President Javier Tebas will be present, and BBVA CEO Francisco González' bank will remain La Liga's primary sponsor for the next three seasons for €75M ($98.2M) (EL CONFIDENCIAL, 6/3). ... The LTi Group will not extend the expiring contract with Basketball Bundesliga (BBL) club Gießen 46ers. The company has been the team title sponsor since Jan. 24, 2008 (Gießen 46ers).