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Manchester United have ‘pulled a rabbit out of the hat’ by landing a £235million shirt sponsorship deal with the global tech firm, TeamViewer, in the middle of a global pandemic.
Analysts believe the Red Devils have trumped the market by securing a sponsor worth £47m annually and a contract that extends to five years, rather than three.
The pandemic has left many potential sponsors counting the pennies, while others do not feel this is the right time to be seen to be spending millions on a football club.
Manchester United have surprised analysts by striking a £235m shirt sponsorship deal
On top of that, there has been slim pickings on the pitch for United, by their standards, since they appointed car manufacturer, Chevrolet, as their principal shirt sponsor in 2014.
The Chevrolet deal was believed to be worth around £52m a year to United and was a seven-year contract.
Throughout that period, United have won just an FA Cup, EFL Cup, Europa League and a Community Shield
All of which leaves financial experts admiring the club’s executive vice-chairman Ed Woodward’s commercial acumen in securing TeamViewer, a remote software company from Germany.
Manchester United have signed up with the little-known German tech firm TeamViewer
United’s finances have taken a hit as a result of the coronavirus pandemic, losing around £100million of their income according to the recent publication of their finances
‘There are fewer companies in the market place now,’ said Dr Rob Wilson, head of finance at Sheffield Hallam University.
‘From a corporate point of view, companies have seen a downturn and it does not look right to spend a lot of money on shirt sponsorship.
‘And as a proposition Manchester United is not as strong as it used to be.
‘My expectation was that they would have to settle for a deal of shorter duration and if they matched the money they made with Chevrolet that would be extraordinary.
United’s executive vice-chairman Ed Woodward has been credited with landing deal by fans
‘The fact they have found a relatively unknown sponsor that is prepared to pay £47m per year, which is almost a match of the Chevrolet deal, is very impressive.’
The cash boost will certainly be welcomed at Old Trafford.
Unitedhave struggled to match previous eras and have claimed only a handful of trophies in seven years
United’s finances have taken a hit as a result of the coronavirus pandemic, losing around £100million of their income according to the recent publication of their finances
The agreement with TeamViewer represents the largest sponsorship deal negotiated by a sports team during the pandemic across the world and the most valuable in the Premier League at the present time.
And it has taken both the market and fans by surprise. Some supporters took to Twitter to express their puzzlement.
‘Never heard of TeamViewer and me thinks Chevy is a more known, global brand,’ wrote one supporter.
Another wrote ‘Goodbye to Chevrolet. Idk (I don’t know) what TeamViewer is but welcome to United.’
So, who is TeamViewer and why are they the perfect fit for United in these troubled times?
Never heard of them…?
If there is a company designed to survive the pandemic – and it isn’t Zoom – then it may well be TeamViewer.
The firm provides software that allows people to work at home, but log in to their computer, or any other device, at their workplace and use it as if they were actually there.
While many of us might have thought that a little niche a year ago, it is exactly what thousands and thousands of people now do every day.
The German tech firm, founded in 2005, claims to operate in 200 countries and connects more than 2.5 billion devices
Founded in 2005, TeamViewer is a German tech company that supports remote working
But TeamViewer isn’t a global brand… A step backwards for United?
Not yet a global brand…
With work habits changing as a result of the pandemic, IT solutions to support home working will continue to be massively important; may be even more important than a car.
Either way, when it comes to shirt sponsors there isn’t the choice there used to be.
United signed their seven-year deal with Chevrolet in 2012, becoming active in 2014
Firstly, some big players like tobacco and alcohol companies have been outlawed and the future of gambling firms as shirt sponsors is uncertain, with Government currently reviewing regulation in that sector.
Secondly, the pandemic has hit hard.
Companies are counting the cost and others, which have traditionally been a good source of revenue such as banks and insurance firms, may feel lumping £200m on a shirt deal is not the prudent look they want right now.
So, tech is a good sector. It is benefiting from the pandemic. And this is a strategic move.
How good is this deal for Manchester United?
VERY good, given we are in the middle of a global crisis and United have pulled up no trees, recently.
This deal is hugely significant from a business perspective. It will dwarf other shirt sponsorships in the Premier League, and it b elieved to be similar to Barcelona’s reported 55 million euros (£47million) per season deal with Rakuten.
So, it brings a significant competitive advantage to United. Almost £50m in the bank each season without kicking a ball is a good head start.
The club’s managing director Richard Arnold (L) said United were excited to work with ‘one of the most exciting and dynamic global software companies’
And the Red Devils have worked some magic to stretch the deal to five years. Many thought, after years of striking long deals, they would have to settle for a three-year option this time around.
Five years brings security. It helps to separate commercial success from achievements on the field. In other words, the club can weather a few bad seasons and that won’t be the case for mostb clubs.
But could United have done more a year ago?
Possibly, but the relative lack of success on the field would have eroded the club’s ability to increase the size of the Chevrolet package, even before the pandemic.
Remember, Chevrolet wanted out. They agreed their current deal in 2012, it started in 2014 but by 2019 they’d decided they had had enough.
At the time, bosses at General Motors, of which Chevrolet is a division, were said to be thoroughly unimpressed with United’s performance over the duration of the deal.
Car manufacturer Chevrolet have been the club’s principle kit sponors since 2014
OK, so who gets what out of it?
Apart from the obvious, United will be delighted with the global reach.
United’s managing director Richard Arnold made a point of this when he welcomed the deal, also noting that the club boasts 1.1 billion fans and followers worldwide.
The challenge is to leverage those people so they bring some money in. There are only so many pre-season tours and a limited number of countries you can drag the first team around…
The deal with TeamViewer is the biggest sponsorship for a sports team during the pandemic
Hooking up with a tech firm that specialises in creating global communities – and one that already has a stake in 200 countries – is a potentially valuable partnership.
As for, TeamViewer, they crave global profile and United has the worldwide power to provide it.
As soon as this deal was announced, social media said, ‘who?’ Would we all have been Googling TeamViewer if they had sponsored Fulham? (No offence, Fulham).
What signal does this send to the market?
Few clubs could live with these numbers, but like in the transfer market, one big deal can force up the price for everyone else.
This will set a new benchmark in terms of annual value and contract duration.
However, the selection of an obscure choice like TeamViewer tells us that other clubs will have to work hard – and creatively – to hit their own jackpots.
United’s arrangement with TeamViewer will set new benchmark and push prices in other deals
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