Wednesday, January 21, 2009
United eye passage to India
It may come as a surprise to some to learn that one of the companies in the frame to become Manchester United's next shirt sponsor comes from India. But don't be fooled by the impoverished scenes depicted in Slumdog Millionaire, India boasts some of the most extraordinary wealth in the world.
United's current sponsorship deal with AIG expires at the end of next season, and given that the US insurance giant narrowly avoided bankruptcy last year (thanks to a $152 billion federal bailout) few observers where surprised when they confirmed they would not to be in the running to renew their four-year, £56.5 million deal.
Although the current economic climate suggests that United will be lucky to find another company willing to again break the British record shirt sponsorship deal as AIG did, it won't stop United from trying.
Enter Sahara. Anyone with a passing interest in cricket may have seen Sahara's logo on the shirts of the Indian national team; a privilege they paid $70 million for.
Sahara is a difficult organisation to pigeonhole, so wide and varied are their interests. The privately owned company is involved in airlines, financial services and property. Oh, and they built a city. That's right, a city; the extraordinary Aamby Valley development; a 10,000-acre ''aspirational city'' which Sahara refer to as a ''Megalopolis.'' Google it, incredible.
And Sahara are far from the only exorbitantly prosperous group in India, a fact illustrated by the vast sums which were spent, and continue to be spent, on cricket's Indian Premier League.
The sport's Indian governing body auctioned the rights to operate eight IPL franchises in the popular Twenty20 competition and earned a massive $723 million by doing so. The title sponsorship rights to the tournament, which began last year, were sold for $50 million, while the global television rights were sold for $918 million.
Sahara would not be India's first representative in English football, they would follow QPR co-owner Lakshmi Mittal, who, according to Forbes magazine, is the fourth richest person in the world with a net worth of around US$45 billion.
For United the possibility of agreeing a deal with an Indian company fits neatly with their continued expansion plans, and as noted above, the wealth in India makes having a presence in the subcontinent advantageous.
Of course, while there is supreme wealth in India there is also extreme poverty, and the gap between rich and poor is excruciating to all who have witnessed it.
While United will be happy to attract new fans from every demographic and social strata in the subcontinent, they will not be expecting to make money from the average fan.
Rather United will be targeting India's burgeoning super rich and the country's business leaders, hence why they sent a letter to Sahara inviting them to become a potential partner ''for the world's most iconic sports marketing tool, the Manchester United shirt''.
And in a savvy move designed to pique interest the club also sent the company a United shirt bearing the Sahara logo.
Chelsea fans will have breathed a collective sigh of relief following Roman Abramovich's angry reaction to reports in the Sunday Times which claimed he had approached a member of Saudi Arabian royal family to see if they were interested in taking the Stamford Bridge club of his hands.
The club vehemently denied the claims and even threatened the newspaper with legal action.
Despite the disappointment of losing the Champions League final to Manchester United in Moscow and the club's faltering progress in the Premier League this season, Abramovich is said to be as committed as ever to the club; though he did leave his seat with 15 minutes left to play on Saturday and so missed Chelsea's fight back against and eventual 2-1 win against Stoke City.
Reports of an increasing detachment from the club, coupled to losing £3 billion from his £11 billion fortune were used to explain why Abramovich was thought to be ready to sell.
Abramovich bought Chelsea for about £60 million in 2003 and took on debts of £80 million, debts which at the time were threatening to ruin the club under Ken Bates. In the years since the Russian has provided in excess of £500 million in loans which have been used to fuel the club's subsequent success, including two Premier League titles.
Fears that Abramovich would one day effectively decide to pull the plug on Chelsea, write-off his loans and leave the club crippled by the cost of the huge salaries he has paid his players now seem ill-founded, and not just because of Abramovich's reaction to the claims of a sale.
Just because he can afford to write off £500 million doesn't mean that he will, in fact one of the world's most successful businessmen would probably be unable to countenance such a thing.
It was always more likely that while Abramovich saw Chelsea as an enjoyable distraction, it was always an asset, never just a plaything. If the day comes when Abramovich does want to sell the club he will do so at the going rate ensuring he recoups his investment, and he almost certainly won't try to do so at the nadir of a global recession.
There was a time when Fulham counted themselves as one of the richest clubs in the world thanks to the backing of Harrods owner Mohamed Al-Fayed. But as the Premier League enters the billionaire era being a simple millionaire is no longer enough.
Following the Egyptian's arrival at Craven Cottage in 1997 Fulham invested in players, management and infrastructure and were rewarded with two promotions and a seat at English football's top table.
But now, with his considerable wherewithal no longer of the stature required to compete, Al-Fayed has added his voice to the growing number calling for the introduction of a salary cap.
Al-Fayed described as ''madness'' the £500,000 a week Kaka could have earned had he joined Manchester City, and added: ''This is still in the hands of the Premier League and the FA. They have the power not to allow things like this to happen and I hope they wake up and realise it's not acceptable. They can put a cap on transfer fees and salaries.''
The mood in the English game has long been against a salary cap, not least because, in it's strictest interpretation, it would contravene European employment laws.
While a cap of any sort is unlikely to be adopted in the Premier League anytime soon, the Football League, which governs the game in the three divisions below the top-flight, is understood to be warming to the concept and support from a top flight club like Fulham doesn't hurt.
As result of the economic climate the Championship, plus Leagues One and Two are thought to be considering a move to keep wages below 60% of turnover. It might be a flawed idea, but if adopted it could be a precursor to a true salary cap.