Analysis Opinion Insight

Saturday, July 12, 2014

Manchester United Shirt Sponsorship

It was not that long ago, relatively recently in the greater history of football, that Soccer Clubs started getting money from apparel manufacturers for the privilege of using their club's crest on replica match shirts, shorts, socks, caps, scarves, beanies and a whole host of other items. It's hardly believable that there was a time when Clubs would have to pay a company to print them a few shirts, to put their own crest on a simple shirt or socks. We've come a long way in a very short period of time.
Danny Welbeck in the last
of Nike's United Shirts

In the Premier League era, Manchester United shirts have been sponsored by Adidas( who had sponsored us throughout the 1980s), then Umbro (now owned by Nike) most noted for the 1998/9 treble shirt, and most recently Nike who've sponsored United for the last 12 years, with one final season of shirt sponsorship concluding next June. For that privilege, Nike paid a mammoth $519 million USD. Given Nike make $28 billion USD in the last financial year, up from $9.89 billion USD in 2002, one can argue that its been a great investment.  With news that Adidas are lining up to pay $128mil a year for 10 years to sell United branded shirts to the world,  I believe that United are making the easy, safe choice by accepting a deal with Adidas, who have deals with Real Madrid, Bayern Munich, Chelsea, AC Milan and a whole host of other clubs. I'd rather United take a bolder move and create a unique deal with a relative small player in football apparel, Under Armour.  
 With the club crest and
a better Chevrolet badge,
this could become a classic shirt

I know that Under Armour is a much smaller company when compared to Adidas, but strategically,  UnderArmour would grow massively if they agreed to sponsor us, back end the deal and increase payment amounts over the length of the contract, start off with $70m a year and growing by 10mil a year for 12 years (totaling about $1.5bil). I think it would give UA a massive boost in their market share and worldwide reach, really "putting them on the map" in Asia and in the football world, as their first global club, we could demand much more than Spurs and would allow United to differential themselves from the other major clubs who are either Nike or Adidas clubs. With a relatively large market share in the US retail and sports industries and a growing global reputation for quality goods, as well as a savvy product placement team that has seen Under Armour featured in movies & multiple TV shows (prominent on Friday Night Lights and seen in multiple scenes of Chicago Fire and Chicago P.D, as well as Batman:The Dark Knight Rises, Multiple Marvel Movies, Lone Survivor, Fast & Furious 6 etc.)  

Just think it would be a great move for both parties, United can really show themselves to be above the Nike v Adidas petty rivalry and be in a class of their own. Additionally, a deal with a relative outsider to the football world can help United secure image rights related commercial deals for their players when they get them to do ads for club sponsors which don't put individual player sponsors' noses out of whack. So Rooney(whose contract specifically includes a clause related to earnings from commercial promotional actities run by the club), RvP, Kagawa, Mata, Shaw and Herrera and who-ever else has image rights deals, can get decent money from a deal which reduces MUFC's wage bill growth while keeping them competitive in the transfer marketplace and  remain an attractive employer while keeping their wage bill to turnover ratio below 50%.  

An interesting idea that the club might be contemplating in regards to the United merchandising business from the  telegraph.
Interesting piece on football kit culture by John Devlin here

Thanks to the Pride of Manchester for having an awesome website with so much information. 

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