It was quickly lauded as another masterstroke from the doyen of major commercial deals in the football industry.
Manchester United chief executive Ed Woodward has, despite the ire levelled at him and the club’s lack of on-field success over the past decade, been able to continue to negotiate the biggest deals around, maintaining the Old Trafford club’s position as a commercial juggernaut that Liverpool and the rest cannot quite match, however they may try.
The size and scope of United’s commercial deals are something that Fenway Sports Group would love to see realised at Anfield, but they are also numbers that they feel they can match if they make the right moves at the right time.
The Nike deal could well become the biggest boon of them all for Liverpool moving forward if they are able to truly maximise their ability to generate revenue through their 20 per cent royalty kick back on the sale of licensed merchandise through the Nike platforms.
And when you consider the boom in Nike’s selling power through their focus on cutting out the middle man and selling direct to consumer, the partnership could well be a fruitful one, especially with Nike’s number one client, LeBron James, now a bonafide partner at FSG.
But what of United’s latest deal?
On Friday it was announced that United had partnered with TeamViewer, a software firm that provides remote access solutions for businesses to control maintenance and remote control of computers and other devices.
The five-year deal is reported to be worth some £235m to United, a £47m per year deal that sees the tech firm take over from US automotive firm Chevrolet, who had been the Red Devils principal shirt sponsor since 2014 on a deal that was worth in excess of £50m per year but also included Chevrolet holding United’s automotive partnership rights, something they can now sell on again.
Soon after the news of the deal, TeamViewer’s shares, which had seen great growth during the pandemic owing to the rise in home working, took a major plunge on the stock exchange.
TeamViewer will be spending around 14 per cent of their annual £344.5m turnover on their marketing strategy with United, the update implying a £30.3m ($42m) increase in marketing expenses for 2021.
Stock dropped by as much as 16 per cent, although Morgan Stanley analyst George Webb was quoted in Bloomberg as telling clients: “From a broader perspective, we believe the marketing exposure TeamViewer will garner from the deal could significantly aid the company’s traction.
“We would view the share price reaction as a buying opportunity.”
With the company being tech, and business to business in its nature, it does lend itself to being a growth company, with its value tied up in that. And with the pandemic meaning homeworking is likely to continue as businesses fathom out how to operate post-Covid it could well prove to be a marketing strategy that pays off.
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