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Man Utd could benefit from AIG collapse: analysts
AFP, LONDON
Thursday, Sep 18, 2008, Page 20
Manchester United said it was ¡§business as usual¡¨ yesterday after its main sponsor was bailed out ¡X as experts said the club¡¦s global power could even have seen it profit from an AIG collapse.
In a week of turmoil in financial markets, insurance giant American International Group was handed an unprecedented US$85 billion rescue loan on Tuesday by the US Federal Reserve in a bid to avoid a new global economic shock.
AIG¡¦s shirt sponsorship deal with the European and English Premier League champions is the biggest in world soccer ¡X a four-year contract worth ¢G56.5 million pounds (US$100 million) signed in April 2006.
¡§It is business as usual for us,¡¨ a spokesman for the Glazers, the American family which owns United, said yesterday.
¡§Manchester United is financially strong. We have not been adversely affected by the credit crunch,¡¨ he said.
Indeed, the Red Devils¡¦ pulling power in the lucrative Asian and Middle Eastern markets is such that a knock-on disaster from AIG was never a realistic prospect.
Had the insurance firm sunk, ¡§I don¡¦t think they [United] would have been overly concerned about it,¡¨ Drew Barrand, head of media with analysts Sport Industry Group, said.
¡§Because of the global commercial appeal that United have, you could interpret it that they wouldn¡¦t have minded if the deal had been terminated half-way through,¡¨ he said.
¡§It would have allowed them to go into the market again and negotiate for a new deal that potentially could have earned them more,¡¨ Barrand said.
Barrand said it was not certain that AIG would maintain their contract with United, though the exposure it gives them and the likely punitive get-out clauses might deter them from pulling out.
Shirt sponsorship in professional English soccer dates back to Liverpool¡¦s 1979 tie-up with Japanese electronics firm Hitachi and it is rare to see a jersey without a company logo on it.
Sponsors bring in about 20 to 25 percent of a club¡¦s income, but while the likes of Manchester United and Chelsea can pull in up to ¢G15 million a year, the average for teams outside the superclub echelon is around ¢G1 million a year.
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