Manchester U sponsors taken over by US government

AIG, sponsors of Manchester Bankrupt, have been taken over by the US government.  The company told the government that it needed $80 billion to keep going, and rather than have the company crash, the government loaned the company the money, effectively giving the state an 80% stake.

It is impossible at this stage to know if the Federal Reserve’s involvement with AIG will result in a change of stance.  Certainly the sponsorship of a bankrupt organisation such as Manchester U cannot be seen as a prime activity for a government owned insurance operation.

On the other hand there is a contract between Manchester and AIG – but most contracts of this type have get out clauses.  They are expensive for the sponsor, but they can be activated, and if AIG’s new owners effectively decide to cut losses as and where they can, this could be one plug that is pulled.  It is difficult to imagine that there is any real benefit to AIG at the present time of being seen on a Manchester U shirt.

What is clear is that the value of club sponsorship is being downgraded very rapidly, and the money that will be gained from future sponsorships will be far less than those signed up for a couple of years ago.

In this regard there Arsenal are in a very strong position having signed up a long term deal with Emirates Airlines, which includes the naming of the stadium for (I think) a further 13 years.  The clubs that are going to suffer are those without a sponsor now (WHU and WBA) and those whose deals are coming to an end.

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