Manchester United has signed a five-year shirt sponsorship deal with German technology company TeamViewer, scoring one of the biggest endorsement contracts in world football as a pandemic-induced financial crisis rocks the sport.
The English Premier League club declined to provide financial details on the agreement which starts from next season, but a person familiar with its terms said the deal is worth about €55m a year.
While that falls short of its current $559m seven-year deal with US carmaker Chevrolet, the contract remains close to the value of corporate shirt sponsorships at other leading teams, such as Spain’s FC Barcelona and Real Madrid.
Sponsorship deals have become a crucial source of income for top clubs. Teams are suffering from steep income shortfalls because of lost gate receipts, with fans locked out of stadiums. Last season, revenues at Manchester United fell to £509m, down from £627m in the previous year.
The new deal will help the club retain its position as one of the sport’s highest earning clubs by revenue, which has allowed it to acquire and pay the wages of top footballers.
“Fans are hugely appreciative of the sponsors of their clubs, but to take a step forward in this way, at this time, will be recognised by fans for what it is,” said Richard Arnold, managing director at Manchester United. “Not just a vote of confidence, but a hugely important partnership for us.”
Corporate groups have also been forced to re-evaluate their marketing spending with sporting groups during the pandemic, with executives at other clubs saying the value of their sponsorship deals had fallen in recent months. Manchester United allowed its sponsors to defer £80m worth of payments last season.
The Premier League side began the search for a new shirt sponsor two years ago after General Motors, Chevrolet’s parent company, indicated it would not renew the club’s record contract. At least 10 potential companies took part in the final stages of the talks, Arnold said.
TeamViewer, which makes remote working software, said the endorsement deal will result in a “significant increase in marketing expenditure” for the group and guided that its profitability will be hit as a result.
Founded in 2005, the German company reported annual pre-tax profit of €170m on revenue of €455m in 2020. Permira, the private equity firm, is its biggest shareholder with a 20 per cent stake.
Shares in TeamViewer fell more than 14 per cent to €36.68 following news of the deal. Shares in Manchester United were up 0.2 per cent at $17.78.