Manchester United are lining up a huge renewal deal with current kit manufacturer Nike. The Old Trafford club will begin talks in February as the current deal is set to end in 2015 and was worth £303m with a share of the profits on top. With more and more Manchester United shirts being sold every season, Manchester United have a very big say in what kind of deal they are given.
There will almost certainly be a queue of sportswear suppliers vying to replace Nike on the Manchester United shirts.
The Old Trafford club switched to Nike from Umbro back in August 2002 and was contracted for 13 years, obviously Nike want to still remain the kit manufacturer. The amount being bandied about by the press is in the region of £1bn for the kit manufacturing deal, which must either match or beat the current 13 year deal.
This kind of money, along with the other sponsorship deal including AON, Chevrolet (who will become the clubs principal sponsor in 2014), DHL and the many others, would help Manchester United achieve in clearing the debt, whilst still competing in the transfer market, and with other clubs both domestically and in Europe.
If Manchester United achieve the huge deal which is due to be negotiated from February 2013, I am sure it will mean great things for the club. Just think that dream of having Cristiano Ronaldo back at the club, we know he might still be open to the idea as he is running out of things to win over in Spain. There are endless ideas of what could happen with the club, but with them still being very lucrative for many businesses out there, all this doom-and-gloom about the club being sold out to sponsorship is all a bit far-fetched.
Yes the club advertise a lot of companies at Old Trafford and Carrington but so do other clubs. Manchester United have 31 official sponsors at the club, these include principal sponsor, kit manufacturer/supplier, logistics partner, automotive partner, betting partner, official beer, wine partner and the list goes on. Again most other clubs have all these sponsors, which is just making the game of football a more lucrative way of businesses making money as there will always be a company willing to replace an outgoing sponsor.
So what next for Manchester United?
Obviously there will come a time where no other sponsors will fit at Old Trafford and Carrington so where could this take the club. Perhaps selling the naming rights to Old Trafford? The Glazers have this week confirmed that this will not happen and they would never consider it. Old Trafford is a world-renowned stadium and is the backbone of the club in historical terms, the Glazers know not to mess with this. The Glazers, love them or hate them, are shrewd businessmen and have the best intentions of the club at heart, believe it or not.
I believe some of their business decisions of late have been pretty well thought out, well apart from the IPO which seems to have knocked $1.50 off the original $14.00 share sale price, but selling shares is a long-term decision that needs to be carefully thought out. Manchester United’s debt is becoming smaller and currently stands at £360m, only a few years ago the debt was reportedly three times bigger than the current amount.
Manchester United vice-chairman Ed Woodward spoke to the press earlier this week about the Glazers. Here is what he said:
“There is always interest in this business. It is a phenomenal brand and club, but they (Glazers) are not willing sellers at all, they won’t even engage, they are long-term investors.