By on July 31, 2012

While bloggers and the MSM are gobbling up the red herrings served by the deep throats at GM, some people are connecting the dots. They even drew a map. If you are concerned about U.S. taxpayer’s money leaving for Old Blighty, you want to read on. Don’t do it on an empty stomach. Or maybe do. You will want to puke.

Relationship mapping site Muckety connected the dots and revealed that it is not the first time that the British soccer club Manchester United is at the receiving end of American tax payer money. “While the federal bailout may or may not have saved the American auto industry, it’s doing wonders for English football,” says Muckety. “Before its collapse, American International Group also had a marketing deal with Manchester. The insurance giant would later be propped up by $182 billion in federal aid.”

Even the usually staid Marketwatch can’t hold the snark down and says: “One of England’s most popular soccer teams appears to have a soft spot — right in the center of its jerseys — for the U.S. taxpayer.”

Does it hurt to see hundreds of millions of sponsor money desert the All-American sport of football and go to an obscure sport and a country which had burned the nation’s capital down? Don’t worry, the money will come right back.

The owner of Manchester United is Floridian Malcolm Glazer. He bought the British club for £790 million. But, says the London Telegraph, “instead of paying with cash, or with a small and manageable amount of debt, the Glazers slammed a massive mortgage on Manchester United and leveraged it to the hilt.”

You may puke now, because it is getting worse.

In a filing to the SEC,  it was disclosed  that “six lineal descendants of Malcolm Glazer” used the soccer club as an ATM. £10 million (nearly $16 million) were loaned to Glazer’s children “for general personal purposes.” That in addition to £13.2 million (nearly $21 million) in management fees paid from 2009 – 2011 to  Glazer-owned holding company Red Football LLC. But fear not, the loans were paid back “in connection with the £10.0 million dividend distributed to our principal shareholder on April 25, 2012,”  as the SEC document states.  So there is a company that is nearly suffocating under a £423 million ($664 million) debt pile, and the company can afford a dividend payment that just happens to be big enough to wipe out the Glazer children’s debt.

Chronicling all the financial shenanigans surrounding the club that will be synonymous with Chevrolet for seven years is beyond the scope of this car site. Reuters did a better  job anyway.  If you want the British perspective of the shenanigans, read the Guardian.  Once you have read the stories, you will be astounded that GM would approach the soccer club with anything shorter than the proverbial  10 foot pole.

Done puking? Ok, there is more.

To reduce the mountain of debt, Glazer is taking the company public. The IPO is planned for the end of the year, but it doesn’t seem to be going too well.  It probably crosses your mind now that a $600 million sponsorship deal, big enough to wipe out the club’s debt, could be somehow beneficial for the IPO? You are not alone with that thought. Still snarky, Marketwatch writes:

“Securing long-term sponsorship is doubtless helpful to reassuring payroll concerns. And who knows? Europe may prove a more receptive market for all those Chevy Volts than the U.S. has so far.”

The thought may also cross you mind that Malcolm Glazer could be a donor to certain political parties, and that there is some roundabout deal going on. We did the checking for you. Public records identify Malcolm Glazer, his lineal descendants and people surnamed Glazer as generous donors to worthy political causes, (such as $20,000 to the DNC Service Corp.).  The money was spread to both sides of the aisle, the donkey side received the jumbo share though.

P.S.: I lied when I said the money would come right back to America. Like any patriot who wants to save taxes, Glazer registered the soon public Manchester United company in the Cayman Islands.

P.P.S: In a press release, GM makes Ewanick-successor Alana Batey say the lines which probably were written for Ewanick:

“We are extremely proud to connect our brand, Chevrolet, with Manchester United and its passionate supporters all around the world.  Manchester United’s statistics are impressive, but this relationship goes far beyond the numbers – this relationship is about connecting our brand with the deep-seated emotion that surrounds the team everywhere it goes.”

Indeed, the fit is perfect.

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32 Comments on “What Do AIG And GM Have In Common? TARP, And Sponsorship Of Manchester United...”

  • avatar

    Rats in the Glovebox.

  • avatar

    If there was something in this article about cars, I sure couldn’t find it.

    What I’m really waiting for is an intelligent argument as to why sponsoring the world’s most well-known sports team is a bad move for a company trying to grow international marketshare. I know that would probably be less satisfying than constructing some kind of hackneyed conspiracy theory about money laundering, but it would at least be more relevant to the ostensible purpose of this blog.

    • 0 avatar

      Agreed 110%. We’re neck-deep in Black Helicopter territory here.

    • 0 avatar

      “If there was something in this article about cars, I sure couldn’t find it.”

      I know what you mean. Why doesn’t GM spend our money on activities related to producing and selling cars?

      • 0 avatar

        CJ, isn’t advertising, in this case with a football club part of the selling activity?

        I noticed other companies, including one you are favourably inclined towards, also sponsor football :

        the second one is sure to get red blooded, patriotic Americans happy!

      • 0 avatar

        Is there really going to be a 700 million dollar return on rebranding Daewoos as ‘Chevys\'(not to be confused with Chery please!)? Honestly? While Open and Vauxhall die on the vine, two companies that have name recognition and a great deal more European credibility than Daewoos/Chevys, even while not having enough at the moment. Shouldn’t they spend that money trying to figure out how VW builds one car twelve million market friendly ways rather than spending money on engineering? They’re giving away houses to sell mailboxes here, and you’re trying to find a Toyota parallel. Good luck.

      • 0 avatar

        Funny how you say how bad Chevy/Daewoos are and that Vauxhall and Opel are the European brands that have credibility, but then later say look at what VW says selling one car. But, this is EXACTLY what GM is trying to do with Chevy, hence the Cruze. Most of Chevys line up will be the same world wide soon. Chevy is going to be the world brand like VW is.

        Regardless of what you think, sponsorship is a selling activity. Global brand (Chevy) on a global stage (Manchester United), it makes sense. Now the price, which isn’t disclosed but only speculated, might be too high. But long term sponsorships like this aren’t cheap either. Especially not for high profile athletic teams.

      • 0 avatar

        VW doesn’t sell one single identifiable car for all markets though. They sell the same car as the Audi A3 Mk2, Audi TT Mk2, Volkswagen Touran, Volkswagen Caddy, SEAT Altea, Volkswagen Golf Mk5 / GTI / R32 / Rabbit Mk5, Škoda Octavia Mk2, Volkswagen Golf Plus, SEAT Toledo Mk3, Volkswagen Jetta Mk5, SEAT León Mk2, Volkswagen Eos, Volkswagen Tiguan, Volkswagen Scirocco, Volkswagen Golf Mk6, Škoda Yeti, Audi Q3, Volkswagen Jetta Mk6, Volkswagen Beetle, Volkswagen Passat, Volkswagen Passat CC, Volkswagen Sharan & SEAT Alhambra, and Škoda Superb to a blissfully ignorant public. They sell their car as Audis, Seats, Skodas, and Volkswagens depending on market or market segment. They make lots of money doing it to, since they don’t have to spend money engineering multiple cars. They’re spending money on things people who are too busy to know about cars care about, and making lots of money in the process.

      • 0 avatar

        Mike, putting your logo on ManU’s shirt is a whole different scale than putting your banners up at some tournaments that no one pays attention. It may be a huge payoff for GM, but I hole if flops. Mainly because I HATE ManU.

      • 0 avatar

        Coca-Cola spends billions of dollars a year trying to move 99 cent cans of sugar water. I don’t see how they could ever expect a payoff on that one.

        I find calling all derivatives of one platform family “the same car” with no engineering differences between any of them to be mildly insane too, but at least that’s less relevant to the tour de farce you’ve got going here.

      • 0 avatar

        CJ – I didn`t say the contract was worth the reported $600 million (other reports are $300 million) and I have no idea why they would sponsor two English teams unless someone has a soccer fetish.
        However you stated that this sponsorship had nothing to do with making or selling cars. When patently it does. I linked to some quickly found examples of Toyota doing football sponsorship. For two reasons a) they are a well run and well regarded company and b) you are a big fan of theirs so if they did it, it must be OK.

      • 0 avatar
        doctor olds

        CJinSD- It isn’t your money. You just own a very, very, very tiny fraction of the company.

        Sponsorship of a sport followed by 1.6 Billion people is all about selling cars!

        Chevrolet is the 4th best selling brand in the world and has all time record sales last year.

      • 0 avatar

        @Doctor Olds – 1.6B fans following soccer is good even though many are in 3rd world places, don’t qualify for car loans nor of legal driving age.

        So if GM normally ‘scores’ $897.01 per vehicle (8.1B profit on 9.03M vehicles), wouldn’t the break-even point on a questionable $600M tax write-off, be 668,889 vehicles sold exclusively to these soccer fans per season of soccer?

      • 0 avatar

        Chevy has a 1.43 share in Europe with their primary sellers being the bottom feeding Aveo and Spark. Spending hundreds of millions so GM can hype cheap Chevy sales growth measured in thousands while medium priced Opel sales decline by hundreds of thousands is an expensive canard that will only fool people that really want to be fooled. One must wonder why they want to be fooled so badly.

      • 0 avatar

        GM does the same thing with platform engineering. Some models are market specific (large trunks/SUVs in the US and Canada) but most everything else wears a different badge in different markets with different brands. People know about this. The people who don’t are the same people in the US who don’t realize the similarities in the lambdas in the US.

        The 600M number is a guess by some. But my understanding, is that it is a number for all of the years combined. Several reports are for 300M total (with the expecting of raising another 300M with IPO, hence the debt being erased of the family).

        So, at 600M, your math is correct for 688k cars, but over 7 years. Not per year. Also, it wouldn’t be strictly Europe since half of ManU fans are in Asia.

    • 0 avatar

      “What I’m really waiting for is an intelligent argument as to why sponsoring the world’s most well-known sports team is a bad move for a company trying to grow international marketshare. ”

      It isn’t a bad idea.

      However, instead, they’re sponsoring Manchester United. (ducks)

      • 0 avatar

        Malcolm Glazer has so thoroughly screwed ManU. He is possibly the worst possible owner for any team ever, Man City, Chelsea and many others have owners that AD value (well, sh*t load of money) to the teams while mister Glazer ads nothing and siphons funds, making sure that ManU won’t be competitive in the future. The team is huge in Asia, and thereby making the sponsorship deal worthwhile for GM, but if it ain’t winning it won’t be worth much in the future.

        “When the seagulls follow the trawler, it’s because they think sardines will be thrown into the sea”

      • 0 avatar

        I assure you that no matter what questionable financial dealings Mr. Glazer might be involved in, he is in no way a worse team owner than Mike Brown.

  • avatar

    “Does it hurt to see hundreds of millions of sponsor money desert the All-American sport of football and go to an obscure sport and a country which had burned the nation’s capital down?”

    Huh! are you serious? ‘obscure sport’? Maybe on Planet Krypton! Putting Chevrolet’s name on Man. Utd. FC jerseys will give it a thousand times more exposure than on any NFL team jersey. Politics aside, it’s a rare good move by GM. On the global sport scale of things, NFL is obscure and I’m glad GM realise this.

  • avatar

    Fascinating, although I do wonder about the efficiency of arranging a $600 million, 7 year deal so that around $25K is given to Democrats and $15K to Republicans back in the 1996-2006 timeframe. GM may have some inept management but this seems unlikely.

    The question I would like answered is why sponsor Liverpool as well as Man Utd. Man Utd makes sense on some levels, but two in the same league and country. Why not do as others mentioned and sponsor Barcelona or Bayern Munich. Gives them much more exposure.

  • avatar

    Reading the graph right to left as my Occidental eyes want to do, makes it look like the Tampa Bay Buccaneers are either the cause of, or solution to, all of these problems.

  • avatar

    Reading the graph left to right as my Occidental eyes want to do, makes it look like the Tampa Bay Buccaneers are either the cause of, or solution to, all of these problems.

  • avatar

    What’s the big deal here? Malcolm Glazer is an astute businessman. When he bought the Buccaneers in the early 90s, he soon threatened to move them to Orlando unless the city built him a new stadium. The city folded for some $400 million in taxpayer financing.

    Loading up an acquisition with debt to pay off the new owners is a fine American tradition. Look at Wall Street’s private equity firms and hedge funds.

  • avatar
    DC Bruce

    For all of the hoopla, this looks like a standard “heads, I win; tails, you lose” financial deal.

    It doesn’t really answer the question of why GM would want to promote the Chevrolet brand in the UK or Europe, when they have the Opel brand, which makes most of the product they sell, even the re-badged Volts which don’t sell.

    Much as I would personally like to tie this boat anchor around the Democrats’ necks, the age of Malclm’s big money dump on the Democratic Party (1996) pretty much kills any possible inference of a quid pro quo with respec to bailed-out AIG or GM.

    • 0 avatar

      ” the age of Malclm’s big money dump on the Democratic Party (1996) pretty much kills any possible inference of a quid pro quo with respec to bailed-out AIG or GM.”

      Agreed, there doesn’t appears to be a quid pro quo corruption case, but this another example of money retarding the decision making process and preventing politicians from doing what is in the best interests of their non-check writing constituents (aka voters).

    • 0 avatar

      The sponsorship deal probably has more to do with the asian market than the European, ManU is miiiighty popular in asia. Or, conspiracy time, they are killing opel and that other brand – that’s actually opels with wonky steering – and trying to eliminate opel from the minds of people.
      Sponsoring the team using Opel shirts wouldn’t have made much sense.

  • avatar
    Domestic Hearse

    If you don’t think the big fish at the very top of the food chain weren’t getting preferential treatment via options come IPO time, you’ve not spent much time with your ear pressed to the boardroom door.

    GM leadership was well aware of Ewanick’s ManU deal. However, the timing of it was terrible. It was too much and in the wrong place. Politically, Ewanick was making a mess: Pulling his ad spend — publicly, mind you — out of American company Google (right before their IPO) and the holy-of-holies, The Superbowl.

    Ewanick is the fall guy. He’s taking the blame for GM’s inept timing — right before the election. Now the company is backpedaling on the deal, claiming Ewanick went off the reservation. Don’t believe it. Not for a second. For those who dismiss this story as “black helicopters” or “conspiracy theory”, don’t. There’s a lot more going on here than merely automotive marketing and all of us, as taxpayers, should be demanding a whole lot better explanation than the one GM is currently offering.

    • 0 avatar

      Facebook not Google. But, I don’t know what GMs presence on Facebook and IPO mean. They used it, not owned stock in it. As far as the Superbowl, you’d think someone up the food chain could have stopped it if they wanted to.

      See my post about the Zapata Corp. in the screenshot that is posted further down. Zapata + CIA + Poppy Bush were one big happy family for a few years. Shouldn’t be a big surprise that a few years later Bush was CIA chief.

  • avatar

    Eh, while I don’t care for such high priced sponsorship deals, Samsung’s deal w/ ManU seems to have paid off.

    As a taxpayer, I have more of an issue w/ govt. backed student loans going to dubious for-profit “universities” like the University of Phoenix where student loans not only made its founder a billionaire, but had enough “left over” ($154.5 million) to pay for the naming rights to the stadium where the Arizona Cardinals play.

    Almost HALF of the delinquent student loans are from students who attend these for-profit schools.

    • 0 avatar

      And I Quote:
      “Almost HALF of the delinquent student loans are from students who attend these for-profit schools.”

      If I take your statement as gospel, that means MORE THAN HALF of the delinquent student loans were taken out by students who attended public universities. The only thing your statement proves to me is that the government has no business backing student loans.
      They had no business backing GM either. If that were the case, we would have no reason to bitch about the general’s advertising expenditures, but as it is…..

      Disclaimer: I went to a public college, drove a beater, worked two jobs and paid cash.

  • avatar

    Not that it means anything, but I thought I recognized the Zapata Corporation.

    George H. W. Bush was one of the founders of Zapata Oil. An offshoot was called Zapata Off-Shore. Supposedly Zapata Off-Shore at one time did work for the CIA. There’s a whole bunch of records missing on who did what when.

    I haven’t heard that name in 20-30 years.

    I detest scoccer. But, you go where the eyeballs are, and for the rest of the world it isn’t the NFL.

  • avatar

    You know, SMALL campaign donations to a few people starting in 1992 to 2006 and trying to say that there is a link between this, the bailout, and now a sponsorship is pretty darn lame.

    Also, coming up with the 600M number isn’t very solid either, since it doesn’t take into account the IPO that ManU is trying to do, which they are hoping to raise 300M from. Which might be why several new sources are saying the deal is worth 300M over 7 years.

    But, I also disagree with the ManU financial handling is a reasons for sponsors to stay away. This has led to poor performance on the field, which is what most fans care about. Now, poor performance on the field doesn’t stop the Dallas Cowboys and Washington Redskins from being too of the most valuable and sought after franchises in the NFL. They get plenty of sponsors (a huge amount actually).

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