Manchester United are happy that they will keep on their AIG-emblazoned shirts despite the near collapse of the insurance giant.
United grin and bear it
Manchester United are happy that they will keep on their AIG-emblazoned shirts despite the near collapse of the insurance giant. There were fears that AIG would follow the major financial company Lehman Brothers into liquidation after their shares crashed more than 60 per cent on Tuesday, leading to an overall loss of 93 per cent of their value in a year.
The US Government, however, stepped in to rescue AIG from what could have been the biggest bankruptcy in American history with a loan of US$85billion (Dh213bn) in exchange for an 80 per cent stake in the company. Manchester United have a £56.5 million (Dh372m) four-year sponsorship deal with AIG, which was signed at the start of the 2006-2007 season, and the English and European champions are confident the company will be able to fulfil their commitment to the agreement.
"It is business as usual for us," said a spokesman for the Glazer family, who own the club. "Manchester United are financially strong. We have not been adversely affected by the credit crunch." United's deal with AIG, the biggest shirt sponsorship in the game's history, was signed in April 2006 after Vodafone terminated their £9m-a-year deal at short notice. The "credit crunch" and financial uncertainty in the world markets have already claimed one victim in the Premier League. West Ham lost their shirt sponsorship last week when the holiday company XL Leisure Group went into administration.
The Hammers had signed a three-year deal with XL in July 2007 worth £2.5m-a-year. West Bromwich Albion are also without shirt sponsors, and when they faced West Ham on Saturday, it was the first time since the Premier League began in 1992 that the teams were without a shirt sponsor. An uncertain future lies ahead for the up-for -sale Newcastle United - whose owner Mike Ashley was in Dubai yesterday attempting to broker a sale of the club - as well.
They have a shirt sponsorship deal with Northern Rock bank, who were taken into state ownership in February this year. There have been calls to end the agreement as British taxpayers are effectively paying. There are other clubs in the Premier League who face the prospect of losing their sponsors as one of the worst financial crisis in recent history unfolds. Manchester United, however, are on a strong financial footing, with their pulling power in the Asian and Middle East markets.
Drew Barrand, head of media with analysts Sport Industry Group, suggested the collapse of AIG could even have been good for them. "Because of the global appeal they have, you could say they wouldn't have minded if the deal had been terminated," he said. "It would have allowed them to negotiate for a new deal that could have earned them more." email@example.com