Dispatch June 2009

The Selling of Soccer

How Manchester United, the best team in the world, teamed up with a Chicago reinsurance firm
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When two executives of Chicago’s Aon Corp. went through their mail one day last fall, they each found a large package with a leather-encased box, containing, of all things, a soccer shirt with the company’s own logo emblazoned across the chest.  The shirts appeared to be bonafide red home jerseys of Manchester United, arguably the most famous sports team in the world—or at least in the world outside the soccer-suspicious United States.

They had the red and yellow team logo and the Nike swoosh, and were obviously high quality, but they were just mockups. Aon, which is Gaelic for “Oneness,” had no relationship with the team. It doesn’t even have anything to do with its own hometown teams, the Cubs, White Sox, Blackhawks, Bulls, or Bears.

That overture led, eight months later, to a sponsorship and marketing deal in which AON paid a reported $130 million in exchange for having its logo on the jersey. The story of how this deal came about, and the benefits each party derives from it, offers an instructive look at the world of international commerce, where in the quest for global success, companies sometimes find themselves venturing into unexpected but auspicious pairings.

Manchester United is a giant on the world sports scene, transcending its un-sexy, industrial hometown in the same way Vince Lombardi’s Packers’ transcended little Green Bay. It’s fitting that the favorite book of its own legendary coach, Scotsman Alex Ferguson, is When Pride Still Mattered, David Maraniss’s biography of Lombardi.

Based on worldwide polling of respondents' favorite and second-favorite teams, Manchester United has an estimated fan base of 333 million. Its record of championships is equivalent to the Yankees, with an impressive consistency and a Who’s Who roster of past and present players that includes superstars like David Beckham and Cristiano Ronaldo

The reach that Manchester United-related events, broadcasts, and products have around the world is staggering. Manchester United games are broadcast in more than 1.1 billion homes in more than 220 countries, attracting an estimated weekly audience of 88 million during the team’s 41-week season.  In addition, it has its own dedicated television channel, MUTV (a joint venture with Rupert Murdoch’s Sky TV), which is broadcast in 197 million homes via cable or internet in more than 100 countries.  Its website generates more than 60 million page impressions monthly, with 70 percent coming from outside the United Kingdom. Millions are signed up to receive the team’s email newsletters, and just last year, the team sold 2.2 million licensed jerseys – which doesn’t count the estimated 4.4 million bootleg sales. Affiliation with this team through sponsorship is an unparalleled opportunity for exposure.

Starting in 2006, Man U was sponsored by AIG. It was a four-year, $93 million deal that seemed to give a boost to the financial services company. Prior to the deal, New York-based AIG did not make it into the so-called Interbrand survey, an influential annual list of the top 100 global brands. A year after the deal, AIG was the highest new entry onto the list, at number 47. The reason cited was: “The insurer is pushing harder to make a name. Its sponsorship of Manchester United puts AIG in front of millions of fans throughout Asia and Europe.” At about the same time, AIG rose from 84 to 30 in the Barrons list of World’s Most Respected Companies.

As the economy imploded in 2008, AIG decided not to renew the arrangement when the contract expired in 2010. Even before AIG decided to end its sponsorship, Man U had been strategizing about attracting a more lucrative shirt sponsor, and finding a partner with a similar interest in growing in China, India, and other emerging markets. It considered AIG a fine partner, but it also suspected that the firm may have underpaid for the value it was getting. Man U’s London office began researching potential new partners.

Manchester United was systematic in its approach, going through stacks of data on companies worldwide and, according to team officials, targeting a “substantial number,” sending each of them the mock jersey, along with individually tailored pitch brochures, explaining how the team could provide solutions to each company’s competitive needs.

Aon was an ideal target for such a pitch. The company has no real brand presence, even in its home base of Chicago, despite the fact that its name is affixed to the third-tallest building in town (fourth in the United States)—a white granite-clad, 83-story skyscraper once famously known as the Standard Oil Building. Ask even well-to-do professional Chicagoans what Aon does, and most aren’t sure. (What the firm in fact does is offer risk management, insurance and reinsurance, and human capital consulting services.)

The company isn’t well known worldwide, either. To be sure, it’s huge, successful, respected, and very international (it does the King of Spain’s insurance work, for example). But most of its  subsidiaries go by other names, not Aon.

Moreover the company didn’t have much branding coordination. In some places, it sponsored horseraces, in others dragon boat racing, in still others art exhibits.  For Phil Clement, Aon’s marketing boss (and one of the company’s two recipients of the mock jersies), the proposal offered the opportunity to tie all these branding efforts together. He could oversee one mega-endeavor, instead of dozens of smaller ones. And rather than starting an international campaign from scratch, Aon could piggyback on the far-flung Man U enterprise. “Instead of running 20 marketing programs,” he later commented, “we could potentially run one, lean, agile, program that would have more impact than any 20 combined. And the fact that I could hit Europe, China and India at the same time was phenomenal.”

It wasn’t all that hard an internal sell since, of a key 32-person board of its biggest operating unit, only six  of them hold U.S. passports. (Perhaps unsurprisingly, Aon executives who work overseas were more vocal about the deal’s benefits than many at Chicago headquarters). That group knows soccer. And of the eight people on its executive team, three are Manchester United diehards.

As the talks continued, Aon didn’t know who its competition was, but company execs knew they stood to benefit from the downturn in the economy. There wasn’t as much crazy marketing money being spent, so they weren’t much concerned about being outbid by a dot-com or some other firm flush with cash or soaring stock prices. And a lot of well-established firms, with large marketing budgets already committed elsewhere, were unlikely to shift hefty sums into a Man U deal. Finally, they knew that some potential competitors were probably skittish about following scandal-tainted AIG.

Manchester United was well aware of its global reach and appeal, but team executives were intent on not seeming arrogant or overconfident. Richard Arnold, the team’s commercial director, said the partnership with Aon was as much a function of the “cultural fit” they discerned as it was the dollars on the table. (He intimated that there were other strong bidders, with AON not necessarily the highest).

The deal was finalized on May 27 in Rome, shortly before the big European club game of the year—the so-called Champions League final—at the Olympic Stadium. (Barcelona ended up beating Manchester United, 2-0.). The shirt-sponsorship  portion of the deal is to begin in the 2010-2011 season, to be followed in 2011 by a product promotion agreement, according to which Aon insurance products will bear the Man U brand.

Talking about the deal later, at a bar back in Chicago, Clement could not have been more pleased. By one marketing formula, he figures that to replicate via traditional advertising methods the amount of exposure he’ll get would cost in the vicinity of $330 million.

And so, this Wednesday, while Chicago sports fans were convulsed by the start of the “Crosstown Classic” between the Cubs and White Sox at Wrigley Field, Clement was in London, immersed in international marketing plans, Arnold was in China, preparing for an upcoming Asian tour, and Chicago’s Mayor Daley was in Switzerland, attempting to woo the International Olympic Committee. And while Daley hopes to bring the world to Chicago, Man U is looking to help bring Chicago-based Aon to the world.

James Warren is a former managing editor and Washington Bureau Chief for the Chicago Tribune who writes for The Huffington Post, The Daily Beast, and is a political analyst for MSNBC. He has previously written for the Atlantic on Kissinger and Nixon.
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James Warren is the Chicago editor of the Daily Beast/Newsweek and an MSNBC analyst. He's former managing editor of the Chicago Tribune. More

James Warren is a former manager, editor and Washington bureau chief of The Chicago Tribune. An ink-stained wretch, he's labored at The Newark Star-Ledger, The Chicago Sun-Times, and the Tribune in a variety of positions, including financial reporter, legal affairs reporter-columnist, labor writer, media writer-columnist and features editor. The Washingtonian once tagged him one of the town's 50 most influential journalists (he thinks he was 46, the number worn by Andy Pettitte, a pitcher for his beloved New York Yankees). He's a political analyst for MSNBC. He was recently publisher and president of the Chicago Reader, and is now policy columnist for Business Week and twice-a-week Chicago columnist for The New York Times (you can find his handiwork on the paper's website and on new Chicago pages produced for Friday's and Sunday's Midwest print editions by the nonprofit Chicago News Cooperative, which he held to start). A native New Yorker, he's a happy resident of the wonderful, if ethically challenged, City of Chicago, where he lives just north of decaying Wrigley Field with his Pulitzer Prize-winning wife, Cornelia, and their sons, Blair and Eliot. Blair's t-ball team is, yes, the Yankees.

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