Guardian:
‘When Malcolm Glazer borrowed £500m to buy Manchester United, he did so in expectation of making big profits from the biggest club in the world's favourite game. This morning, as he digests the news that shirt sponsors Vodafone are to terminate their £9m-a-year agreement with the club two years early, he may reflect that he should have stuck to American football.
‘Vodafone's withdrawal came as a further blow to both the balance sheet and the self-esteem of an institution that for 12 years has seemed impregnable.
‘With a huge global fan base - a third of the Thai population entered a competition to win a trip to Old Trafford in 1997 - and a consistent record of success, United set the commercial template for football clubs in the modern era.
‘The Vodafone deal was one of a number struck by Old Trafford that set new benchmarks for the game. Nike bought a 13-year licence in 2002 to manufacture replica shirts for £23m a year, and Vodafone's £9m a year included access to content that both parties anticipated would generate revenue from the developing mobile phone market.
‘In recent months, however, a review of sponsorship strategy led Vodafone to conclude that, in terms of exposure, advertising and revenue, the agreement with United produced comparatively disappointing results.
‘Vodafone was also spooked by the prospect of protests by supporters' groups bitterly opposed to Mr Glazer's takeover. In July, the campaign group Shareholders United held a demonstration outside Vodafone HQ and called for a boycott of their products, and they subsequently negotiated a deal with Orange in which they received a donation of £60 to their fighting fund for every fan who switched from Vodafone.
‘More important in the final analysis were changes in the nature of the sponsorship market. Vodafone yesterday confirmed that it had struck a deal to sponsor the Champions League itself. With a guaranteed presence in all stadiums and on television broadcasts of the biggest tournament in club football, the £9m paid to United seemed to add little value.’
Times:
‘As Sir Alex Ferguson surveys the Manchester United dressing-room for a captain to fill the boots of Roy Keane, his paymasters at Old Trafford are performing a search of the world’s corporate corridors for a new shirt sponsor after Vodafone unexpectedly pulled its £9 million-a-year backing. The mobile phone group said yesterday that it is to end its six-year association with United at the end of the season to “pursue other sponsorship opportunities”.
‘The decision, which took advantage of a break clause halfway through the four-year, £36 million contract, was billed as mutual in a positively worded joint statement, but according to sources, it was one-sided.
‘Vodafone has signed up as a key Champions League sponsor from next season under a three-year deal and says that its football sponsorship needs to progress to the next level. Given United’s recent weak showing in Europe, the company may also want to guarantee a presence in the later stages of the Champions League in years to come.
‘However, the timing of the move as United struggle on the pitch and the fans express disillusionment with the club’s new ownership points to tension in the commercial relationship. “Having a deal cut short by two years is not good. If things were going well, Vodafone wouldn’t do that,” Tim Crow, a director of Karen Earl Sponsorship, said. “Vodafone have probably taken a view that, over the next two years, thing are not going to get markedly better.”
‘Malcolm Glazer and his sons are unlikely to have seen this coming before Vodafone raised the issue several weeks ago. In the business plan that their advisers presented to banks during their £790 million takeover of the club, there was a reference to the break clause, but their opinion was that it was “very unlikely to be exercised”.
‘That Vodafone wants to remove its name from the world’s most famous club shirt should have United executives worried, given that the Glazers, who borrowed heavily to buy the club, intend to raise commercial revenues by 76 per cent over the next five years. The same business plan stated that there was “no reason to believe” that Nike, which has a £303 million merchandising deal with the club, would exercise its break clause in 2008. Yesterday’s announcement shows that things can change.
‘United put a gloss on Vodafone’s decision with talk of “exciting” sponsorship opportunities and said that they were in talks with a number of “world-class” companies. It is also thought that Vodafone will stay as a lower-tier sponsor.’