Manchester United have defied the credit crunch to secure the biggest shirt sponsorship deal in football history.
The Barclays Premier League champions yesterday announced a four-year contract worth £80million with Aon Corporation, the American financial giant, which will replace AIG as the club's shirt sponsors from the start of the 2010-11 season.
The deal comfortably eclipses the £68million four-year agreement that Bayern Munich have with T-Home, the telecommunications firm, and dwarfs United's existing £56.5million contract with AIG, the discredited American insurance company.
Although politicians in America have put pressure on AIG to pull the plug on its four-year agreement with United after being granted an $85 billion (now about £52 billion) rescue package by the US Federal Reserve last September, the firm will remain as the club's shirt sponsors until its deal finishes at the end of next season.
United have been scouring the globe in search of a new principal sponsor since AIG announced in January that it would not be renewing the £14million-a-year deal and are understood to have held negotiations with a small number of firms, including Sahara, the Indian financial services corporation, and Saudi Telecom.
Aon, which is the world's leading risk adviser and human capital consultant, emerged as the most suitable partner, however, and talks are thought to have been concluded within three weeks.
Given the adverse publicity generated by the collapse of AIG, United are eager to draw a line under that saga and start afresh, although Aon has been embroiled in a controversy of its own in recent months involving employee pensions. The insurance broker cut pension contributions to most of its 5,400 United Kingdom workforce in April in a move widely seen as heralding a clampdown on retirement schemes.
Aon said the cuts were necessary to reduce costs to remain profitable, but with that in mind, it remains to be seen how its employees react to news that the company is about to pay a record amount to sponsor a football club's shirts.
Aon has defended the decision to invest in United, saying: “The economic downturn has affected virtually all businesses, but we felt that we had to continue to be forward thinking in our attitude. An opportunity such as this to build a world-recognised brand rarely presents itself and it seemed that we should grab it now and reap the rewards in the years to come.
“In general, our sector has been less affected than those of the other global financial services providers and so we were fortunate to be in a position where we could seriously consider an opportunity of this scale.”
Greg Case, the president and chief executive of Aon, added: “It is a unique opportunity when two leaders in their respective fields can come together in a partnership such as this. We play to win in our business and that is why we believe this partnership will create tremendous benefits for both organisations worldwide.”
The deal is a far cry from the first shirt sponsorship agreement United struck, with Sharp, the Japanese electronics firm, in 1982. Its initial five-year partnership was worth £500,000.
Sharp remained United's shirt sponsors until 2000, when United struck a four-year deal worth £30million with Vodafone, the mobile phone group. It was renewed in December 2003 to the tune of £36million over four years only for Vodafone to trigger a break clause to end the partnership in 2006 with two years left on the contract to concentrate on its sponsorship of the Champions League.
David Gill, the United chief executive, said: “We are delighted to be entering such an important relationship with a company of the stature of Aon and to have its logo adorn our shirts from the start of the 2010-11 season.
“We look forward to being closely aligned with the world leader in risk management, a firm which shares our values and is an exciting partner for Manchester United. This announcement clearly strengthens our position as one of the biggest clubs in world football.”
Company profile
Aon Corporation is one of the world's largest insurance brokers. Based in Chicago, it employs 37,000 staff worldwide and operates from 500 offices in 120 countries.
It generated revenues last year of $7.6 billion (now about £4.6billion). It also acts as a consultant on pension, employment and risk management issues for companies. Its shares are listed on the New York Stock Exchange.
In the UK, it trades as Aon UK Ltd and is Britain's biggest insurance broker. It employs more than 5,400 staff and Peter Harmer has been chief executive since January 2007.
Having acquired several British insurance brokers, the Aon brand was first established in the UK in 1996. Last year, it acquired Benfield, the Lloyd's of London broker, for £738 million.
Aon's UK arm has twice attracted controversy this year. In January, it was fined £5.25million after it was found to have made 66 suspicious payments between early 2005 and late 2007 in countries including Bahrain, Bulgaria, Burma and Vietnam in an effort to win overseas business. It was the sixth-largest fine levied by the Financial Services Authority, the City watchdog. In April, Aon became one of the first UK companies to cut contributions to its staff pension fund. It halved them to a maximum of 6 per cent of an employee's salary.
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