Manchester United Football Club
a) By opting for the AIG sponsorship deal worth £56.5m, MUFC is prior the larger deal of £70m, i.e. the opportunity cost is the extra £13.5m had they choose for the Mansion deal.
b) Vodafone and AIG might desire to sponsor a club such as MUFC due to numerous reasons, such as:
- The enormous amount of publicity that sponsors would enjoy. Each time MUFC plays competitively, their sponsor's logo is being marketed.
- A large sports club, such as MUFC, would help to the sponsors to get international publicity.
- They might be associated with an image of fitness and health.
- Through sponsorship deals, Vodafone and AIG may gain brand alertness and even brand loyalty.
- Sponsorship of well-known organisations or clubs can be a very cost-effective marketing tool.
c) Even though the sponsorship deal with Mansion was monetarily more attractive, management at MUFC clearly felt that non-financial factors essential to be considered before agreeing on a new sponsorship deal. Had they choose for the Mansion deal, there would have been an extra £13.5m worth of money. However, it is likely that the management of MUFC did not want to be linked with a sponsor implicated in gambling. This is particularly important because a significant segment of its fan base is young children. MUFC, therefore, may be acting in line with its guidelines on corporate social responsibility. The bottom line is the management did not consider the extra £13.5m was worth the risk in upsetting the Club's reputation amongst its key stakeholders. In addition, since MUFC has widely held shareholders in the USA and continually wishes to grow in the US market, it might like better to be associated with American International Group.