Want to have a hand in the success of Manchester United, the world’s preeminent soccer franchise? Forget traveling across the pond or even tuning your television to the next big match — all you have to do is pay your taxes.
The economic downturn has done what even David Beckham could not: transform professional soccer into an American institution.
Just take a look at the jersey of star center forward Wayne Rooney. In addition to the Manchester United logo and the Nike Swoosh, the famed red uniform prominently carries the logo of AIG, the insurance giant famous for paying out bonuses to its top executives after receiving a multi-billion dollar bailout from the U.S. government.
Now, Manchester United doesn’t put logos on its jerseys for free. AIG has to pay the team more than 56 million quid for the exposure, and it’s a good bet that those payments are continuing.
This means that U.S. taxpayers, like it or not, are financially supporting Manchester United — and thus have a stake in how well it performs this year.
So how is our team faring this year?
Just a few weeks ago, Man U sat proudly atop the English Premier League. But its once-significant lead in the standings has shrunk dramatically. On March 14, the team lost 4-1 at home to rival Liverpool. The following Saturday, Man U saw two of its players ejected in a 2-0 loss to Fulham, and later lost its number one ranking. On Sunday, playing without a suspended Rooney, Man U reclaimed a marginal lead in the standings by eking out a 3-2 thriller against Aston Villa.
Though the team’s recent struggles can hardly be blamed on its partnership with AIG, the situation does teach us a valuable lesson about the dangers of co-branding. Joining with a seemingly strong brand may improve a firm’s short-term fortunes. However, in this increasingly volatile world management should think very carefully before staking its company’s reputation on a relationship with a third party over which it has very little control.
But while things may look very challenging for Man U, the team still has a chance to win the English Premier League, the FA Cup and the European Champions League — in addition to the Club World Cup and the English League Carling Cup, which it has already pocketed.
A victory for Man U is a victory for the U.S. taxpayer — in spirit, at the very least — so let’s all give cheer for Manchester United, America’s Team. If we’re going to be backing them financially, let’s make sure we get our money’s worth.
Noel Capon is the R.C. Kopf Professor of International Marketing at Columbia Business School.
1 comment:
Man U just won today 2-1 over Sunderland, allowing them to retain the top spot.
As for the AIG piece, the London Gazette was reporting that AIG was going to not pay them a portion of the outstanding dollars and this was in part because of the bailout funds.
I think an addition to the author's argument about co-branding would be the intricacies of international sponsorships and the effect that distant micro economies can have on your partnership.
I think we should all get a game admission and a plane ticket to get over there and watch our team.
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