Chris Reed
Jul 31, 2012

Man Utd & GM: US$600m well spent or a waste of $?

Manchester United have somehow managed to con General Motors (GM) into giving them around US$600m over 7 years for their sponsorship. But it has cost the CMO of GM his job. Surely it should have ...

Man Utd & GM: US$600m well spent or a waste of $?

Manchester United have somehow managed to con General Motors (GM) into giving them around US$600m over 7 years for their sponsorship. But it has cost the CMO of GM his job. Surely it should have cost the whole board their job too?

There are two sponsorships here. The first was signed by GM brand Chevrolet on May 31stthis year and lasts for 5 years. It enables GM

to become the official automotive brand partner of Manchester United. This as anyone with knowledge of how football clubs, especially Man Utd, knows does not give the brand any logo presence on their playing shirts. It merely allows them to be one of the brands promoted around the ground and in all fan communications that the club controls with the exception of any coverage on the shirt which AON had paid for. I

There appears to be a lack of marketing understanding from the board about this sponsorship when they found out that they were paying tens of millions of dollars for non-shirt sponsorship which has led to the CMO Joel Ewanick being fired. In the words of the board Joel “failed to meet the expectations the company has of its employees”. What he didn’t get what isn’t possible without being shirt sponsor? Is that it?

However was he also culpable for the mammoth US$600million shirt sponsorship deal too? No deal this big could have been signed off by a CMO alone. The whole board must have signed this deal. If that’s true when did the CMO get fired? Surely the lot of them should go for spending such an incredible amount of money on a diminishing asset. It’s more than twice what current sponsor AON paid plus they are giving Man Utd a US$100m activation cheque. It doesn’t even start for 2 years.

The earth shattering deal for a brand that has no new stars, lost the premiership last year and will undoubtedly have a new manager someway before or during the sponsorship which doesn’t begin until 2014. Manchester United’s commercial team should be applauded for gaining so much money from the gullible Americans. Ironic given the team being owned by other Americans who bought the club without spending any money just loads of debt!

The question must be asked what came first the motor sponsor and then shirt sponsor or was it always planned to go from one to the other? However as the automotive sponsorship lasts for 5 years that can’t be the case! Will the automotive one now end when the shirt one beings in 2014? This would explain the firing. GM thought that they were getting the shirt sponsorship and when they weren’t fired the CMO. However if that was true why wasn’t he fired when the first deal was announced months ago? Also if they were always going to become shirt sponsors, why bother becoming the automotive sponsor?

Interestingly the sponsorship deal was apparently reworded on Monday, the day after the CMO was booted out. Did the board really not know the full extent of a US$600m contract? If they didn’t then surely that says more about their lack financial controls rather than anything the CMO did wrong. However people will wonder whether the CMO really thought that the sponsorship property of Manchester was really worth that much money and therefore pay more than twice the previous value of it.  Seems both desperate and bizarre. In a world where marketing is under pressure to justify all expenditure and GM sales have not been great of late how can anyone justify spending US$600m on a UK club football sponsorship?

GM, which spent almost US$4.5 billion on advertising last year, said in May it wanted to tap in to Manchester United's estimated 659 million fans around the world to boost the image of its Chevy brand, especially in Asia. Rather bizarrely the automaker also announced a four-year auto sponsorship deal last week with Manchester United rival Liverpool Football Club! Hedging their bets and I am sure Liverpool are wondering if they could have gained more money now!

Viewed as a marketing genius in Ewanwick is best known for his work at Hyundai where he developed a headline grabbing Assurance Program. He offered to return any vehicle during the recession if the buyer lost their job. Hardly anyone did but it was a cool marketing trick. Now he’s best known for something else.

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