More Credit Crunch Induced Sponsor Pull-Outs

A while back I wrote that sponsor pullouts, induced by the financial crisis would hit the PGA Tour the hardest of all US-based sports. It makes sense considering all of the financial services firms and banks who make up substantial portion of the Tour’s funding family. However, while watching some recent Champions League matches I noticed the changes on many teams’ uniforms. It hit me that—in Europe and England in particular— the credit crunch will heavily affect sponsorship deals in soccer as well.

There is question, for instance, as to what will happen with the fate of Manchester United’s main sponsor AIG after the insurance company was nationalized in mid-September. United is in the middle of a 4 year 56.5 million pound sponsorship deal and is dependent on these funds for its operations. Although it should be said that if AIG backs out, there would certainly be a queue of sponsors willing to back –all be it at a much lower price.

But others are worse off. West Ham lost their sponsor when XL Leisure Group went bankrupt. In fact, when West Ham had a game just after XL dissolved, the team played with patches covering the company’s logo. And then there is West Bromwich Albion. The team was recently elevated to the Premiership this season but they failed to find a sponsor and played their first few games with a blank shirt.

In normal times, a jersey sponsorship is a soccer team’s largest source of revenue. But these are obviously no longer normal times. Jersey sponsorship revenue dropped to 67 million pounds from 75 million just a year ago—the first time ever that this number has fallen.