Fired Ewanick's Soccer Deal Backfires: Manchester United Fans Boycott Chevy
Devotees of the Manchester United soccer club call for a boycott of the products made by the club’s sponsors. This famously includes Chevrolet. Last Monday, GM signed a seven year contract with Manchester United. A day before, GM’s Chief Marketing Executive Joel Ewanick, the architect of the deal, was fired. Manchester United supporters are opposed to their club going public on Wall Street. To put pressure on the Glazer family to ditch the plan, they ask the public to stay clear of the products of the club’s sponsors.
According to Reuters, “the call risks embarrassing the club just days after it signed a record-breaking shirt sponsorship deal with U.S. auto company General Motors.” According to TTAC, this can’t be good for Chevrolet and the people responsible for the deal.
The Manchester United Supporters Trust (MUST) accused the Glazers of hurting the team’s performance by saddling it with debt in a $1.23 billion takeover in 2005. MUST has around 180,000 members.
It's all about the TV coverage and marketing mileage from having logo visibility and GM will get plenty of that.
This boycott call is unlikely to have much impact in my opinion - so I dare say that Chevvy can sleep easy. However, some of the comments here are more than a little over-the-top. So lets give some background: Manchester United did not garner the largest group of supporters for any sport club in the world by confining themselves to any particular socio-economic group / geographic area. While the specific group proposing the boycott call is small - their concern about the current set-up has broader support. I understood the specific concern re the share issue was the owners plan to take 50% of the proceeds out of the company. This will still leave substantial debts on the club's books (which arose from the way the owners financed their original take-over). The interest on these debts (which their competitors do not bear as their owners have financed the club by inserting equity rather than debt) is perceived to curtail the ability of the club to compete in the acquisition of world-class players.
"Last Monday, GM signed a seven year contract with Manchester United." A seven year deal? Too optimistic on Chevy's part to think will be around for that long. That's 5 more years than how long I expect them to be around.
So, its a bunch of people campaigning to get a "voice" in a business they don't own, and evidently have no intention of ever owning. Why doesn't MUST just pool their cash and buy into the IPO? Seems that would do more good than boycotting a car brand that their country doesn't even really buy anyway. $5,000 a piece would get them over 27% of the team, which would probably be enough to force a board seat.