Football finance

United chief Gill unworried by credit crunch

October 31, 2008

Manchester United chief executive David Gill is not convinced the credit crunch will have the catastrophic effect many pundits fear.

West Ham are already feeling the squeeze following the demise of main sponsors XL and with the fortune of chairman Bjorgolfur Gudmundsson wrapped up in the Icelandic banking collapse.

Meanwhile, Liverpool have put their new stadium plans on hold as co-owners George Gillet and Tom Hicks attempt to raise finance from markets not willing to lend.

However, with a new Premier League TV deal about to be negotiated, Gill feels the enduring popularity of the nation's number one sport can take the edge off whatever impact is eventually felt.

"It would be naive to think football will not be hit by the recession but it will still be played and shown around the world," he said.

"It will still have the excitement and passion that will enliven people during these difficult times and the games will still be on TV, so the companies can still get their exposure through the partnership."

United have their own concerns despite agreeing a fourth major partnership of 2008, this time with prestige Swiss watch maker Hublot.

In joining Saudi Telecom, Seoul Metropolitan Government and Budweiser, Hublot have joined an impressive portfolio of Red Devils sponsors.

Yet the spectre of AIG looms large. Three years ago, United astounded financial experts when they signed up with the American banking giant following Vodafone's shock decision to walk away from a deal worth £9million annually.

At the time, AIG were seen as one of the most prestigious financial institutions in the world.

That was before the credit crunch, in which AIG would have gone to the wall had it not been baled out by the US government, which now effectively sponsor United.

The prominence of the AIG logo at Old Trafford last night suggests there will be no immediate termination of a four-year deal that is now in its third season.

But it is virtually impossible to conceive of a renewal, leaving the club to find an alternative in the worst economic conditions.

"Putting your name on the Manchester United real estate, which is our shirt, is very valuable," said Gill.

"The overall value of our deal with AIG is around £19million a year. That is a significant deal.

"But we think the value is very much there and we will be able to secure a new partner from 2010 onwards."

Gill confirmed there are funds outstanding from the AIG deal and the financial services aspect of the contract runs beyond the expiry of the shirt deal.

"Obviously the economic conditions were different then but you only have to sell the shirt once," he said.

"There are still some very successful, profitable, growing companies around the world.

"Football is global, Manchester United is global. We have to demonstrate, to one company effectively, what the value of being on our shirt is.

"We are very confident we can do that because we truly believe the shirt of Manchester United is worth a lot of money."