General Motors’ decision to pull the Chevrolet brand out of Europe doesn’t make its $559 million ($757.5 million) sponsorship deal with Manchester United look, how should we say, very efficient? In 2012, GM announced that it was paying $559 million over seven years to place the Chevrolet bowtie logo on the jerseys of Manchester United players.
Now that GM has said it will pull the Chevrolet brand out of Europe, some business analysts are questioning the carmaker’s strategy, as Manchester United players will be wearing a logo for a product that is nonexistent in the region.
“They’re leaving a big patch of geography with lots of eyeballs so the economic value has to go down,” Gary Fechter, an attorney who has represented companies in sponsorship deals for 35 years, told Reuters.
“I would not classify it as a bad deal, but if you could rewind the clock, knowing that you’re not going to be marketing the Chevy brand in Europe, would you do this deal at that price? I think the answer is clearly no,” said Jim Andrews, senior vice president with IEG, a WPP Plc unit that tracks sponsorships.
While the value clearly took a hit with the exit from Europe, the sponsorship deal still holds promise for GM in emerging markets where Manchester United is popular. GM executives dismiss the idea that the deal is less valuable, saying the company will benefit from it in other markets.
“We never, ever did this for Europe. We did this because frankly soccer is the sport of the world. We really did this for our emerging markets, particularly China and Asia,” said Alan Batey, GM‘s North American chief and global head of the Chevrolet brand.
By Dan Mihalascu
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