the tanner ba'

MUFC and Chevrolet: It’s the money, stupid!

Turrible.

Turrible.

Today I came across an interesting fact:  In 2016 General Motors will completely withdraw its Chevrolet brand from the European market.  The reasoning behind this move is simple- they don’t sell a lot of “units” in Europe.  In fact, the only European country in Chevrolet’s “top ten” in 2011 was Russia (at #4), but even those sales were only 3.6% of the company’s overall sales.  So, not really cost effective to keep doing business in Europe, even in Russia.  Makes sense.

Here is another interesting fact:  In July of 2012 Manchester United- which is located, you know, in Europe- signed a 7 year kit sponsorship deal with Chevrolet beginning with the 2014-2015 season for the sum of $80m a year.*  At first glance, this seems pretty stupid:  why would General Motors pay top dollar for United’s most precious advertising space- the front of their shirts- to advertise to a supporter population that you’ve already decided you are not going to serve after 2016?

Well, one reason is that Manchester United sell about 1.5m replica shirts every season, but the other, more important reason is that, according to at least one marketing firm, Manchester United may have as many as 650m supporters worldwide.  That number may be partly (or even largely) the result of some statistical “cherry-picking” by the firm that did the survey for the club, but even independent conservative estimates put the worldwide support of Manchester United at something around 300m.

Furthermore, it is also generally agreed that somewhere between two-thirds and three-quarters of those supporters are in Asia- are all of those Man U. summer tours of Indonesia, Malaysia, etc. starting to make a bit more sense now?  Anyway, let’s pick 70% as the  number and do a little quick and dirty math.

70% of those 1.5m shirts per year is 1.05m/year.

That gives us two things:  $70m+ a year in shirt revenue for the club just from shirt sales and over 1m free Cheverolet advertisements walking around Beijing, Seoul, Singapore, Kuala Lumpur, Jakarta, etc. every year, and that’s assuming people only wear their shirts once a year!  Or, put another way, GM is paying $80 each for their initial “ad placement” and that number drops every time somebody wears their shirt past the first time.  Suddenly $560m over seven years doesn’t seem quite as crazy…

And to complete the circle, Chevrolet’s #3 (China), #8 (Kazakhstan), and #9 (India) sales countries are in Asia and account for 17.5% of the brand’s total sales.

Finally, it can’t hurt kit sales in the United States to have the “bad bow tie” on the front of the shirt, can it?

So, while the shirt is still a travesty, at least we now know why.

 

*They also signed a $1.2 billion dollar deal that will make Adidas their kit sponsor starting next year and through the 2024-2025 season.

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This entry was posted on July 30, 2014 by in Finances, Football Shirts, The Premier League and tagged , , .
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