Vodafone pulls out of Man Utd shirt deal

The new owners of Manchester United were facing more uncertainty on Wednesday when Vodafone, the football club’s shirt sponsor, cut short a £36m (€53m) sponsorship deal two years into a four-year contract.

Coming a week after the club parted company with Roy Keane, its influential captain, and a run of mixed performances on the field, the termination of the Vodafone deal could hinder ambitious plans to increase United’s commercial revenues by more than 70 per cent over the next five years.

The Glazers, the American family that bought United this year in a highly leveraged £790m deal, need to increase commercial revenues at the club to pay back the high-interest “pay in kind” loans taken out to fund their takeover.

The club yesterday put a positive spin on the end of the deal, expressing confidence that it would attract a sponsor willing to pay more than the telecommunications group.

However, the ending of the contract is likely to have taken the Glazers by surprise. In their business plan, drawn up before they bought United, they said it was “very unlikely” a break clause in the Vodafone contract would be exercised.

United said the shirt sponsorship market had “increased greatly in recent years”. This appeared to be borne out in new research by Sport + Markt, a sports consultancy, which found that the amount paid by companies for shirt sponsorship deals with European football clubs had risen for the second time in consecutive years.

The Glazers are believed to be keen to attract a sponsor from Asia or the US. However, Oliver Butler, communications manager of Sport + Markt, said signing a new shirt sponsor could prove complicated for United because of the knock-on effect with the club’s other commercial sponsors. United has commercial agreements with Nike, Budweiser, Audi and Ladbrokes, the bookmaker.

Vodafone on Wednesday said the Manchester United deal, signed in 2000 and worth about £9m ($15.5m) a year to the club, would be followed by a new three-year partnership with Uefa, European football’s governing body, to endorse the continent’s leading club competition, the Champions League.

Vodafone said under the new agreement it would become the official mobile phone network of the tournament, giving it branding and hosting rights and advertising on broadcasts. In addition, users of Vodafone’s third generation network will be able to download video highlights and goal alerts on their mobile phones.

Describing the latest deal, Peter Bamford, Vodafone’s chief marketing officer, said it would extend “Vodafone’s football relevance to supporters around the world” and “increase our brand awareness and drive revenue”.