By Tony Attwood
Man U has got Chevrolet as a sponsor. Big news. Lot’s of shouting. Lots of puffed out chests.
But what you don’t read in the football press or the blogs is that behind the scenes all hell is breaking loose. And the story is getting rather, well, fishy.
Chevrolet is owned by General Motors Co. General Motors marketing chief is Joel Ewanick and he has just been fired. Just two years after he joined the company to lead an overhaul of its marketing strategy, and just having completed the Man U deal.
Reuters, no less, have said that a source with inside knowledge of the matter has told them that Ewanick failed to properly report financial details about the deal.
Now of course that could be a slip of the mind. “Oh yes, sorry, I just did the biggest sponsorship deal in the history of football and, blow me down, I forgot to tell you how much money we are paying the club.”
Hmmmm.
When asked about the source’s observations on the sponsorship deal, Ewanick said in an email that he could not comment.
GM then came out and said that Ewanick’s departure was “effective immediately”. No hanging around, no golden handshake, no gardening leave, he’s out, sacked, gone, vanquished, removed. He will be replaced on an interim basis by Alan Batey, the head of U.S. sales and service.
The GM announcement says,
“Ewanick failed to meet the expectations that the company has for its employees.” That was Greg Martin, their spokesperson. He declined to elaborate.
Ewanick was created vice president and head of GM’s U.S. marketing in May 2010. He said, “It has been a privilege & honour to work with the GM Team and to be a small part of Detroit’s turnaround. I wish everyone at GM all the best.”
So what happened?
The FT continues, “As recently as 2006, Vodafone was paying only about £8m a year to sponsor the club’s kit. It was followed by AIG, which paid £14.1m a year between June 2007 and June 2010.”
Now as the FT says, sponsorship revenues are on the rise, which is why the end of the Arsenal sponsorship deals over the next two years is very exciting news. There’s a lot of new money coming in to the club.
But what is going on with Man U?
We know that Manchester United have aborted listings in Hong Kong and Singapore, and then bailed out of New York on a technicality after running old financial reports.
We know that a number of Manchester United employees will be getting mega bonuses out of the listing on the NY stock exchange when it finally happens.
We know that these shares will never pay any dividend or have any power or influence over the club (the family retains that) – it is the model that Mr Usmanov has suggested for Arsenal, as I understand it. Indeed the FT said, in a completely different article “The question is, why on earth anyone would be prepared to buy [Man U], given the disregard in which the Glazers seem to hold their potential investors.”
And we know that (according to the FT) “Manchester United said annual revenue from the Chevrolet shirt sponsorship agreement would be $70m in the first season, rising 2.1 per cent a year until it ends in the 2020-21 season. In addition, it will receive about $18.6m in fees from GM in each of the 2012-13 season and 2013-14 season under the terms of our new shirt sponsorship agreement.”
But…
Having been talking about Vapour Transfers, could we also be seeing Vapour Sponsorship? Of course I have no inside information and I don’t know anything concrete about this, so I make no allegation – just turn in my usual round of guesswork. So…
Over seven years since the Glazers moved in, they have revalued the club from £790m to £3bn. That is not real money, just the valuation based on the shares they create.
The company is listed in the Cayman Islands which means there are no requirement for independent directors to oversee the owners. There are no plans to pay a dividend. And there is no real knowledge as to what is happening within the company.
My thought in wandering down this by-way is this: the Glazers do say funny things, which are not quite as they seem which leads one to disbelieve all they say. So for example in the NY listing prospectus they say, when claiming that one in seven people in the world “follow” Man U:
“We and Kantar Media included in the definition of ‘follower’ a respondent who either watched live Manchester United matches, followed highlights coverage or read or talked about Manchester United regularly.”
So according to a survey the club paid Kantar Media for, United has 659 million followers. But lots of us watch follow highlights of Man U, and we are Arsenal fans. Some Liverpool fans do this twice a season – when Man U play Liverpool. And that makes them a follower.
Now if you are going to put out stuff like this, then who is to say what else you are going to do behind all those locked doors in the Cayman Islands?
I don’t know why GM sacked their man as he concluded the Man U deal, and I have no evidence, so all I can do is speculate. The reason could be…
a) Because they took one look at the Man U prospectus and thought – “you’re having a laugh” and knew that they didn’t want to deal with that bunch of owners – but then found they were locked in.
b) Because they knew that the price hike for sponsorship was insane and that they would never get their money back in extra sales – but found out too late.
c) Because Man U is quickly becoming the sort of business which through its share and other dealings is exactly the sort of company you don’t want a decent firm to be associated with
d) Because the deal as expressed doesn’t exist – it is vapour. Yes the Chevrolet will appear on Man U shirts, but the amount changing hands won’t be remotely like the amount quoted. Those figures are quoted just to help the share issue along. It will be hard to find out the truth because the deal doesn’t start for a while, and one end of it is in the Cayman Islands where it is hard to find anything.
e) Manchester United’s operating profit has fallen for the last three years and is now at half of what it was three years ago. And this was why the FT ran the headline “Investors in Man U risk losing their shirts”. Chevvy weren’t pleased with that one.
It might, of course all be coincidence, but we could combine all this flim-flam with our recent report on Manchester United and referees.
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Who invented away support?
Follow Untold and the Arsenal History Society on Twitter @UntoldArsenal
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- Ref bias: Looking for an independent second sources to confirm our findings
- Cazorla and Sahin, Vapour Transfers and the trapping of RVP
- How Arsenal survived in the Premier League last season
- Ref bias in the Premier League: Manchester United
- So who is benefiting from all the strange referee decisions
- The Vapour Transfer: how the mechanisms of football have been corrupted
- The transfer market is on the edge of collapse – and the changes are working in Arsenal’s favour
Iniez,
My thoughts are quite similar, what’s not being said is:
Arsenal have spent more than twice what United have on players in this window, Arsenal are running a quiet ‘fuck you’ campaign (if you check the official Arsenal twitter feed you will see that RvP is either prominent or at least present in every single photo from the Germany camp and he looks happy enough) on the internet, Manchester City have withdrawn from the so-called ‘race for RvP’, Juventus aren’t doing anything much either.
Essentially the clubs are at cold war. Arsenal just put IRBMs into Turkey and are daring the red devils to ship some missiles to Cuba. All United have to do is scrape together £25 million in fees and 200k/week in wages and they can have him. If they fail to sign him it sends a massive signal to the United fan base (and possibly players) – United can’t even match Arsenal in the transfer market, let alone City or Chelsea.
SAF is trying to shift the blame for United’s transfer weakness away from the Glazers and onto Arsenal but we’ve been here before with Sneijder and Inter Milan.
It’s like witnessing a crumbling empire. The press used to hang on to Sir Red Nose’s every word and now it’s a bit *meh*. He’s carries out his transfer negotiations in such a public way and so is getting publicly snubbed by players like Moura and young players like Pogba are defying him, reducing his aura of menace. Arsenal do not owe Man U anything and I find Fergie’s new comments to the press about Arsenal funny. If Man U really cannot find the money I suggest the following options. We sell to Man U in January for £15m or RVP takes a large pay cut to help the move.It’s trophies he wants not money apparently anyway.
From a Man U point of view, I think the Glazers have to step in and back Fergie by releasing the money to fund the RVP purchase to save face. Fergie has backed them and now they have to back him, even if it hurts. I would be smiling all the way to the bank if we took £25m off Man U, especially if they win nothing. RVP’s stock has dramtically fallen within the club and he has no doubt had to do the akward walk of shame back to Arsenal. He made it known that he didn’t think most of the players at the club were good enough to play along side him and despite Dein Sr’s plea for a quick sale, RVP has been forced to face them. I am sure he is also been made aware that a number of fans are not happy about the disrespect and disloyalty shown by him, so he must dreading our first home match also. I can’t vouch for others, but as long as he still is an Arsenal player and works hard on the pitch, I will give him a pass until the day after he isn’t. At the same time the RVP circus has moved from the main event to a sideshow. In all of this though Arsenal have not come off weak and insipid.
And it continues
http://www.mirror.co.uk/sport/football/transfer-news/robin-van-persie-transfer-manchester-1241627
Honestly, out of city, juve, and united, the potential move to united has just been everywhere since the beginning. They really have never let it die or go unnoticed. Even when ferguson made his first paltry bid the media would not relent. Instead it became a game of he just needs to up the cash a bit, or just let vp make his dream move regardless of the cost, “just let him go”. Now things seem to really be ramping up which leads me to believe that either ferguson is getting desperate, or (and I PRAY this isn’t the case) he’s getting close. Either way, that picture is bloody infuriating
iniez,
I’m really glad you’ve stayed on the case. If we don’t have this discussion/debate now, in real time, when this decision is on the cusp of being made, then we will only tsk-tsk or rant when it’s already too late to matter.
To me fans should say a unified and unqualified NO to any sale of RVP to Manure. No sale whatsoever. To sell our captain up in the table to either Manchester side – to our worse and worser enemies – is so callous and contemptuous of what Arsenal has been about as a side as to be traitorous. Indeed, our identity as fans should not be to take on the position of being loyal accountants that spend emotions and brainpower to maximize the short-term profit of any faction, either on or outside the Board.
Whatever (affordable!) short term loss (if any) later-on will be surely be compensated for by RVP’s contribution to our advancing within the CL, and securing, at minimum, our automatic place in the CL (if not trophies in at least one or two competitions). He’s a pro who will HAVE to be a positive contributor – if only in his own self-interest – as he will have to maintain form to maintain market-value for next summer (- IF he chooses to leave), as a man then going into his 31st year. That is, he will contribute to our earning another 35M at least in next year’s CL and thereby (whether he signs or not) will have earned his keep.
Selling him now – and to our arch rivals – will be extreme short-termism, only to enhance one or more Board members bottom line. We should also set a clear precedent by finally stopping the Lesser Dein in his tracks; and thereby serve a clear warning to Alex Song, should his fantasy life be (further)stoked by the Judas-agent that whispers a snake’s predations in his willing (?) ears. For Alex to force a departure with TWO years remaining on his contract will also brand him untrustworthy to any side that brings him on. Keeping him on side is our right and our duty and we will benefit from his upside and continued growth, which are substantial. If he were to intentionally sabotage our side or play beneath his capabilities, this too can send out warnings that can seriously depress his next “greener pasture” payday, no matter what Dein tells him.
What these pampered athletes do to one side they will clearly do to any other side – becoming completely narcissistic, insecure-grandiose and agent-prone/driven. And they also screw the non-elite athletes who must perforce earn far less so that these gods can earn more per week than many people can earn in years of real work. Anyway, I hope readers will comment and advocate one way or the other and not play it so safe by waiting for the club to act and then just fall in line.
It appears, from Reuters account, that Manure’s IPO is only going to be fetching them the low end of what they’d hope for. It will still bring in a lot of money, but considerably less than they (Glazers) wanted. Presumably this will put a further crimp in Rednose’s reach and perhaps be another factor in restraining their bid for RVP. For reasons I mention above, I would like RVP to stay (even as I have lost personal respect for him); so I hope this is all true and it hinders their ability to shag him.
In any case, please read the very understandable analysis for yourselves and do consider weighing in:
http://www.guardian.co.uk/football/feedarticle/10383623
bob,
Excellent points. I completely agree that we should, firstly, not be in any rush to sell robin and, secondly, should under no circumstances sell to united. To seem him don the colours of the Don would cause so much damage to all the good that’s come from this transfer window. What was suddenly a dream summer will turn into a disaster. We have absolutely nothing to lose by keeping him. As you say, it’s robin that has everything to lose if he stays and under performs. PLUS who’s to say anyone will even want him come next season. Even if he has another stellar season (which would be great for us) who says he’ll get big money, or even a move to a big club. I agree that the board is our only threat (short of robin forcing a way to manure and arsene conceding), and if arsene would have it his way he would keep him. 20 million? Frankly, fuck 20 million. Keeping our captain, our best player, standing firm on our principles, and faxing a big fuck you to united is well worth the 20 million lost if he leaves for free. If robin is forced to say (considering he doesn’t decide himself to stay) he MUST play well. Having fit van persie giving his best to impress potential suitors will be immense for our team and we will potentially see one of our best seasons in quite some time, and we could hopefully see some silverware. If arsene gets his way, I will be ecstatic
bob,
I remember reading that the glazers were hoping to pocket 50% of profits from their flotation and while this is an old article, and things may be different now, I feel it is significant
http://www.ibtimes.co.uk/articles/368555/20120731/manchester-united-ipo-glazers-debts-finances-revenue.htm
Either the glazers are being greedy or maybe they aren’t relying on it quite as heavily considering how much they got with the chevy deal? I’m not very finance savvy to be honest but to float a chunk of the club on the stock market and pocket 50% is a bold move. Maybe they see it as a commission for their years of good service
iniez,
Maybe this is one reason that Don Fergus is snorting about his inability to land RVP this week: getting RVP would mean having the top two scorers from last seasons EPL to spearhead your attack. This, in turn, would have given a needed boost and a bounce to their stock flotation today (Friday)! Says the NY Times: “The bigger test will come on Friday when the shares start trading. Investors will then decide whether they want to own a company whose fortunes are largely dependent on the performance of players like forward Wayne Rooney and goalkeeper David de Gea. Last season, the team failed to win a title, potentially costing the company millions of dollars in broadcasting revenue.”
I agree, I really do not want to business with Man U and to quote Fergie himself, ‘the only thing I would like to sell Man U is a virus’. I have’nt really changed my position on this at all. Despite some assertions that we have to sell immeadiately, we are not in a desperate position here. To sell RVP this season and make it worth our while, we need at least £25m, though £30-£35m would be more like it as we would have to mitigate the cost finding a replacement at his level, experience, wages and associated fees as well as strenghtening our rival.
I would prefer to keep RVP for one more year and playing him alongside the two new strikers. If RVP starts acting the fool and goes on strike, well in the very least we haven’t strenghthened our rival and he can rust away in the reserves. In a years time we will have a more acclimatised Giroud & Podolski as well as Wellington (remember him?), Campbell & Afobe to help strengthen the attack.
As an aside, say for example someone was selling a second hand car, they might just paint over the rust and keep the engine ticking over to make it seem like the car was in top condition. Using that line of thinking, AFC might want to lay off showing pics of a greyed out RVP with visible leg supports, as they sort of perpetuate the notion that RVP is a old injury prone player – maybe airbrushing and no lower leg shots for the time being might be in order….
Also, from the reported $22 per share to $14 for Man U is still quite a big drop if you ask me. Yes they are still the most valuable football team in the world at £1.5bn, but Arsenal are not too far behind as it turns out at £1.1bn. Despite the determined attempts of some ‘supporters’ to denigrate the club, whist lauding Man U, we are not doing too badly at all.
bob, Goona Gal
I think you may be right bob. United’s chief exec David Gill is going to be watching over the move himself:
http://www.telegraph.co.uk/sport/football/teams/manchester-united/9465437/Manchester-United-chief-executive-David-Gill-steps-in-to-oversee-move-for-Arsenal-captain-Robin-van-Persie.html
Further, after doing some digging around, a certain @marcwebber reported on twitter that Gill said to CNCB “we didn’t start rumours on Van Persie just to puff up our share price on launch”, take this as you will but it’s interesting that it came up. I’d suggest visiting his twitter page for yourself as there’s some decent info on it regarding uniteds share prices
Goona Gal,
I totally applaud your clear-eyed analysis of RVP/AFC at this moment. Refreshing and spot on.
iniez, goona gal,
We’ve done well to focus on the linkage of the essential background story of the moment, which will have a huge impact (not necessarily decisive, but huge) on our prospects in the league. The connection of Manure/RVP and the Glazer Flotation has been a key to understanding an essential part of this important moment.
I think another essential part is to notice the two-front war that Darren Damien Dein (aka 3D, aka The Lesser) has opened up on us – Barca’s tapping of Song (Busquets, Iniesta and today Pique) and Rooney’s tapping of RVP. This is happening simultaneously with the above ManUre flotation/RVP conjuncture. Goona Gal and I may not agree on this one, but I think that we should issue a warning to both Song and Dein by standing pat on denying RVP’s moves. We are strong and should show it. Anyway, would love to hear your further thoughts on Song.
It’s possible, necessary, even fun to think multidimensionally about what “non-football” factors actually do seriously impact what goes on on the pitch. When Arsene used the word “destroy” in June to underscore the fact that interests are out there that are our enemies, it has helped to clarify our situation, for any with the eyes and ears to connect two dots and watch the moving parts that impact our immediate and long-term future.
@ Iniez – I wondered if the RVP thing was genuine also. Along with the claims that Man U have 650m+ fans and the timed press release that the club had signed a lucrative shirt sponsorship deal, signing the footballer of the year along with a young Brazilian hotshot to hype up confidence and galvanise the fans/investor. The path is clear for Man U to make us an offer we can’t refuse.
@ Bob – ta.
@ bob, my thoughts on Song are that he is first and foremost a good player, but not irreplaceble. Song has grown at Arsenal and has been a consistant performer, but I also think that whilst he can play the AM role well, his frequent forays going forward have unbalanced the midfield and he has held on to the ball too long instead of playing the ball early to utilise our fast players on the wings. He has been stripped of the ball in dangerous positions leading to counter’s which have forced last ditched defending by our CB’s.
Arteta being able to read the danger and cover was so important and that’s why suffered a bit when he didn’t play. That said, I don’t think Arteta was as creative as Song going forward and so I would never knock Song from playing as advanced as he did last season. My issue is that when Song saw Vermaelen venturing forward, he should of stayed back. It’s as if now ‘Songhino’ has been unleashed on the world, he can’t curb these instincts anymore. The defence has had it’s problems and the imbalance in midfield has not helped. Maybe we need to return to having a player that primarily plays DM like Frimpong or someone like Dembele, or even have Arteta sit deeper? I don’t know, but Song isn’t invaluable and in a position to command audacious money. I would rather sell than let him walk away free. All I want is for us to focus on getting the balance right in midfield.
Aside from footballing reasons for Song’s departure, I think the club need to extract the leech, Darren Dein from the club. Now I will go on record as saying that I have nothing personal against the agent, who is doing the best to elicit as much money for his client and ergo himself in a business deal. But as an AFC fan, I side with the club and think that AFC need to be as ruthless with Dein Jr as he has been with the club. They need to send a message to players that taking on Dein Jr as an agent or advisor, will affect their position within the club.
Dein has gained his super agent status based on his dealings with Arsenal, but this RVP one has gotten messy and the failure to get RVP the big money move he wants this season so far will be a chink in the armour. FFP kicking in reduces his ability to operate and who knows maybe the dire financial situation in real life may even too. Dein’s club contacts have put him in good position, but I don’t think Man C, the Spuds can be happy with Dein Jr regarding Adebayor. Man C, clearly don’t want the player around anymore, the Spuds had banked on the player’s desire to play for them and the player himself, probably didn’t think he had hired an agent who would be negotiating a pay cut for him!
If AFC make the Song negotiations difficult, Dein Jr as an agent or advsior stops looking so desireable.
I can’t believe it! Normally I skip Goal.com entirely, but the article title peaked my interest. It sort of says, what I said above. I can’t believe I agree with Goal.com. I may need to re evaluate my position on Song….http://www.goal.com/en-gb/news/2896/premier-league/2012/08/10/3297696/in-barcelonas-sights-but-is-arsenal-star-song-worth-all-the?source=breakingnews
Goona Gal,
Yes, that article/analysis is actually interesting and in some depth. Are you focused on the idea that the move toward attack bolstered by collective defense on the part of some of the other major clubs is becoming the strategy of choice (so to speak) and that Song fits in? That got my attention, so I just wanted to know if that’s what’s got you thinking of keeping Song.
As for the other side of the coin (so to speak), the Guardian reports this about the glorious first day of trading of Manure on the NYSE:
“United’s bankers had been looking to sell shares for between $16 and $20, but cut the launch price late on Thursday to $14 – shaving as much as $100m off the windfall expected for the team and its owners, the Glazer family. Shares crept up by 5¢ in early trading.
While the club failed to raise the money it had been seeking, United has still officially become the most valuable sports club in the world, valued at about $2.3bn.
Manchester United’s co-chairmen Avram and Joel Glazer, and chief executive David Gill, applauded the start of trading from the Wall Street exchange’s balcony, which was adorned with the club’s emblem. New York traders wore the United’s new home jersey on the trading floor – but their support did little to boost the stock price.
Wall Street analysts had been dismissive of the sale before the initial public offering (IPO). One analyst called the club’s share sale “merchandise” and predicted further trouble ahead.”
Since we don’t have a thread discussing the IPO, I thought I’d add that the underwriters are currently buying back shares at $14 to keep the value up! As soon as that offer ends, traders expect the share value to implode.
There has been some suggestion that if the share value goes low enough, the banks can step in and take the club away from the Glazers, as happened with Liverpool. This is because the monies owed by the club would exceed the valuation if the shares drop below $5 or some such low ball figure. I’m dubious to the legality of that suggestion BUT there is a risk that they could be plunged into negative equity by these joke shares, which would be hilarious.