This Space for Rent: AIG Must Give Up $100 Million Soccer Shirt Sponsorship

January 29, 2009 • 7:30 pm • POSTED BY David Burden

 

Last week, the beleaguered American Insurance Group (we know them better as AIG) announced they would not renew their estimated $100 million, 4-year shirt sponsorship of English soccer giant and the world’s second richest club, Manchester United.  As an American taxpayer and Arsenal fan, I am happy to hear my bailout money will no longer be covering Cristiano Ronaldo’s dry cleaning bills.  While eschewed in the U.S. outside of NASCAR and professional bass fishing (and a few strategically placed GoldenPalace.com temporary tattoos on boxers’ backs) corporate uniform sponsorship has played a major role in international soccer for more than the past decade. Manchester United relies on such sponsorships for around a third of its revenues. Chelsea, another English club, is receiving $18.7 million a season from a five-year deal with Samsung.  And the branding impact is massive.

It’s a huge win for the sponsor, who receives hundreds of millions, even billions, of impressions via worldwide television coverage.  For AIG, it was a chance to build their brand across Europe and the globe. Other US companies have put their names on the jerseys of European teams in an attempt to increase their presence overseas. Several years ago, TY, the company that makes Beanie Babies, put its logo on Portsmouth’s shirt.

The sponsorship model is (finally) taking a firm hold on Major League Soccer here in the States. Partial shirt sponsorships (that played second or third to the team logo and uniform manufacturer logo e.g., Nike, Umbro, Adidas) have been present almost since the beginning.  But the sea change came in 2006 when Red Bull paid more than $100 million to buy the New York/New Jersey Metrostars, rebranding the team “Red Bull New York”, redesigning the uniform to feature the Red Bull logo (the first jersey-front-title sponsorship of an American team ever) and beginning construction on the new soccer-specific Red Bull Stadium. This was followed by a shirt sponsorship for Real Salt Lake by Xango, a privately owned international company based in Utah that markets and distributes Xango juice. 

 

If that was the sea change, a tsunami hit when David Beckham signed a deal to play with the Los Angeles Galaxy.  Herbalife committed to a $20-million 5-year deal to appear as the main shirt sponsor. And, until recently, it was a good investment.  It immediately catapulted Herbalife’s brand awareness into the stratosphere with a uniformed Becks appearing on magazine covers and SportsCenter, while his shirt could be seen on hundreds of thousands of fans across the country and the world. Over 250,000 Beckham/Herbalife jerseys were ordered in Summer 2007 before it was even designed. While at Real Madrid in Spain, over 1 million officially licensed Beckham jerseys featuring the original sponsor Siemens and later sponsor bwin logo were sold (this does not include the million or so black market versions sold across the planet, whose proceeds don’t directly benefit either Beckham, the team or the shirt manufacturer, but do still feature the apparel logo … in this case Adidas … and shirt sponsor logo). 

And, should anyone question the role of the sponsorship in the beautiful game any further, consider the following: in the past 5 years David Beckham has signed (and sold shirts) for Real Madrid in Spain, the Los Angeles Galaxy, and now for AC Milan in Italy.  All three teams are and have been outfitted by Adidas.  Both Real Madrid and AC Milan are now sponsored by bwin, Europe’s biggest online sports gaming platform.  I guess Becks don’t wear Nike.

 

 

This whole story takes on local flavor as Philadelphia will debut its first MLS franchise in the 2010 season.  There is currently an online naming campaign featuring four potential monikers: Philadelphia SC, Philadelphia AC, Philadelphia City, Philadelphia Union.  MLS does seem to be following Europe’s lead further, with the first three prospects hinging mostly on the city name a la Manchester City, Chelsea FC, and AC Milan.  Hopefully, a shirt sponsor is in the works, as I believe title sponsorships are critical to success of the team and the league.  Plus, they are good marketing.

One final note of interest: In Spain, FC Barcelona, (sometimes called “everybody’s second favorite team” or “the people’s team”  – with the latter an overt reference to the club’s left wing Catalan roots, opposed to the fascist Franco’s Real or “Royal” Madrid) had not ever had a sponsor’s name on its shirt (except a slightly larger than usual Nike Swoosh), decided to take an altruistic tack. The club is PAYING Unicef, the United Nations Children’s Fund, $2 million a year for the next five years to use its logo in all competitions. FC Barcelona is the world’s third richest club.