Chevy Paid $560 Million to Sponsor Manchester United, and Now It's Pulling Out of Europe

Chevrolet’s desire to become a global brand via sponsorships with the English soccer clubs Manchester United and Liverpool has taken a turn now that General Motors has unexpectedly announced the brand’s withdrawal from Europe—this, even before Man U footballers have the chance to wear their Chevy logo-emblazoned jerseys.

While Chevrolet said it will continue its sponsorship of Man U, it will exit the Liverpool deal early, replacing it with GM’s Vauxhall line.

Man U and Liverpool are fierce rivals, so the sponsorship of both teams in 2012 raised plenty of eyebrows. Chevrolet cited the global appeal of the teams—making the Vauxhall switch notable, seeing as it is a U.K. brand.

But the principal GM investment is Man U, costing nearly $560 million over seven years. It also is said to cost former global CMO Joel Ewanick his job. Man U claims more than 650 million fans globally.

 

“Association with a number of elite [football tournaments] can be very beneficial if you’re trying to reach consumers in China as well as Latin America and the Middle East,” said Phil Carling, global managing director, football, at sports marketing agency Octagon.

After a poor season start—by Man U standards—the club is currently outside qualifying position for next year’s UEFA’s Champions League games, with half the season already gone.

“The partnership with Manchester United is of a global nature, and we intend to continue this relationship to help build the Chevrolet brand around the globe,” said global marketing chief Tim Mahoney, noting that much of the team’s fan base is in key emerging markets, notably China. In 2009, China became Chevrolet’s third-largest market, behind the U.S. and Brazil.

In 2012, Kantar reported that of Manchester United’s fans worldwide, 325 million are in the Asia-Pacific region, including 108 million in China alone.

“Manchester United has pioneered a truly global sports model and is one of the U.K.’s greatest exports with incredibly broad appeal,” said Steve Martin, CEO, M&C Saatchi Sport & Entertainment. “Up to 200 countries broadcast the Premier League to make sure the games are in living rooms, restaurants and pubs around the world.”

That helps jersey sales, a huge revenue source to the club and benefit to sponsors. In the 2012-13 season, Man U earned $241.5 million from commercial operations, including merchandise, sponsorship and licensing—more than match-day revenue and broadcast, per Deloitte Football Money League.

But for the most part, it is high-profile soccer events that underscore Man U’s visibility. “If that’s the objective, you could make the argument that Chevrolet overpaid,” said a sports marketing source.

Others disagree.

“All of these large-scale sports deals are worth what people are willing to pay,” said David Abrutyn, svp, global managing director of consulting at sports marketing firm IMG. “They obviously do their analysis, and if it makes financial sense, they do it.”

 Source: Adweek.com