AIG's shirt sponsorship deal with Manchester United has upset the plans of two big Gulf companies
When the world's most famous football team Manchester United signed a $98.98 million shirt sponsorship deal with US insurance company American International Group (AIG) earlier this month it shattered the dreams of two of the Gulf's biggest companies.
Abu Dhabi's Etihad Airways and Doha's Qatar Airways had both held advanced talks with the high-profile English club before the deal with the world's largest insurer was finalised. However, the interest shown by both carriers in sponsoring a top team indicates that perennial sports sponsors Emirates airline could face regional rivalry on Europe's football pitches as well as in the skies. With Britain's Premier League beamed into some 450 million homes in 195 countries worldwide it's easy to see why the region's airline are so keen.
Etihad last month confirmed it was in talks with Manchester United and other European football clubs about sponsoring their shirts and overall operations. Ian Ferguson-Brown, the airline's head of marketing, recently told the British press that the company was "talking to just about every European football club about sponsorship, including Manchester United."
Last November, mobile phone giant Vodafone, which has sponsored Manchester United since 2000, revealed it would be ending its four-year shirt deal with the club to focus on European Champions League sponsorship. The latest deal, worth $15.5 million a year, began only last season and will now end in May 2006.
Etihad was set up in July 2003 and is owned by the government of Abu Dhabi, which is currently reaping an oil revenue windfall as a result of soaring crude prices. The emirate pumps more than two million barrels of oil daily, worth an estimated $125 million. And although it missed out on the Manchester United deal, the little known company could catapult itself onto the world stage overnight if it gets the sponsorship deal it is clearly looking for.
"Sponsoring major teams is the perfect medium to develop your brand globally today football is a global game and is the most popular sport in the world," says Harry Philp, managing director of Hermes Sports Partners, which advises on football sponsorship and investment. "Middle Eastern airlines such as Etihad can afford the entry costs into this market and therefore it is the perfect medium for them."
Last year Premier League matches were watched by a cumulative audience of some 1.3 billion people in countries as far afield as Burundi and Jamaica. As such, a tie-up with a club playing in the world's most watched football league would undoubtedly raise Etihad's international profile exponentially.
"The Premier League is a truly global sporting and televisual phenomenon," says Richard Scudamore, the Premier League's CEO. "Our games are shown in more countries, watched by more people and make up more hours of TV coverage than either Spanish or Italian football."
Etihad tabled a $22.5 million a year offer to sponsor United's shirts for four years back in March. The deal would have surpassed the $19 million reigning Premier League champions Chelsea annually receives from Samsung currently the biggest shirt sponsorship deal in British football.
Nevertheless, United's AIG deal still falls short of the $24.5 million a year Real Madrid will collect from Siemens' partner Taiwanese mobile phone and laptop computer maker BenQ from next summer. The biggest European shirt sponsorship at present is between energy giant Tamoil and Italian club Juventus, which is worth a staggering $26 million a season.
Largest sponsor
AIG's involvement in football now makes the financial services industry the game's largest sponsor behind telecommunications, according to sport advertising consultancy Sport+Markt.
Other firms involved include Northern Rock, who sponsor Newcastle United, Fortis, which has a deal with Anderlecht and Victoria Versicherung AG, through its association with German team Schalke 04.
Qatar Airways, which already sponsors the perimeter of some Premier League grounds, also held talks with Manchester United but, unlike Etihad, did not make a formal bid. However, the Doha-based carrier has been keeping a close eye on developments elsewhere and has been strongly tipped to make a move towards sponsoring the current European champions, Liverpool, when the club's current deal with Carlsberg expires next year.
If the two airlines continue to pursue sponsorship deals with the cream of European football they are likely to face a great deal of competition. A number of global high-tech giants, including Google, IBM, Yahoo and online gambling giant Mansion were sniffing around Manchester United, while recognised consumer brands such as Coca-Cola and Levi Strauss have indicated they will be looking towards the Premier League in the near future. With many clubs increasingly favouring tie-ups with well-known names, lower profile companies from the Gulf will have a real challenge on their hands to land the big deals.
Both Qatar Airways and Etihad now operate services to Manchester, a move which increases their competition with Dubai's Emirates airline a company all to familiar with sport sponsorship.
Emirates first became involved in sponsorship in 1987 just two years after the airline began operating and is today a household name, largely as a result of its sporting activities.
The airline's involvement with football however, is relatively recent but there has certainly been nothing low-key about the carrier's association with the game.
Big exposure
The Dubai-based carrier's four-year sponsorship of English Premier League outfit Chelsea culminated with the team winning the league championship for the first time in 50 years in May 2005. The deal gave Emirates vast worldwide television exposure, through its shirt branding and perimeter advertising. When Chelsea decided to go in search of a more consumer-orientated sponsor, Emirates entered discussions with Arsenal about what has since become the biggest sponsorship deal in British football history.
The result, announced in October 2004, was a $180 million tie-up, which will see Arsenal call its new stadium at Ashburton Grove due to open in three months time the Emirates Stadium in exchange for a windfall of around $11 million a year from the Dubai-based company. This means the airline will pay $180 million over 15 years to have its logo emblazoned all over the Emirates Stadium, and it will also appear on Arsenal's shirts for the next eight years.
Emirates is also one of 15 'official partners' for the upcoming Fifa World Cup in Germany. As such, the carrier will have a presence in all 64 matches, it will be heavily featured in Fifa publications and websites and will be all over our television screens during commercial breaks. The 2002 tournament in Japan and Korea reached a cumulative in-home audience of 28.8 billion viewers, with the average worldwide viewing figure for each match standing at a staggering 314.1 million.
The airline clearly believes that sporting campaigns integrate the carrier with its passengers better than any other advertising medium. As such, the Germany 2006 tie-up will allow Emirates to do this on a worldwide scale, helping establish the brand globally alongside such household names as McDonalds, Philips, MasterCard and Fuji.
James Gregory, chief executive of the Stamford-based marketing consultancy CoreBrand, believes the tie-up is a big step for the company. "Sponsoring the 2006 World Cup announces to the world that Emirates is now playing on the world stage it also allows Emirates to target potential customers with their message but to let their current customers see them reaching out to the entire world," he says.
"This is entirely appropriate as an emerging brand strategy for Emirates and its involvement in Germany means it is doing a good job of getting the maximum return for its investment."
Despite its vast presence in the world of sport sponsorship Emirates may well be casting a nervous glance or two over its shoulders as Etihad and Qatar Airways look to challenge the Dubai-based carrier both on and off England's football pitches.
AT A GLANCE
Emirates' sports sponsorships
- Rhys Jones is a Paris-based journalist who writes exclusively for Gulf News.
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