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News and information about online business, marketing and sales. Published by Chuck Vosburgh at Pro Techniques.

Some Philosophical questions

Chuck Vosburgh - Friday, April 16, 2010
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AIGs troubles and what it means for Manchester United
When Manchester United signed on with AIG in the biggest shirt sponsorship contract in footballing history, the move was seen as vindication of Manchester Uniteds position as the most marketable football brand in the world.Today we read about the difficulties the insurance company faces and there is genuine concern that AIG will go belly-up. For Manchester United fans the details of AIGs plight are irrelevant but it would be, at the very least, a major inconvenience for the club if they were forced to find a new sponsor in the middle of the global credit crunch at the same rates as AIG were willing to pay.So how does AIGs future look like?The bad news is that the level of investment required to bail AIG out is colossal AIG have already raised $20 billion this year and are looking to raise another $40 billion. Theyve turned down financing offers that would give other parties control over the company. Theyve registered $13 billion in losses for the first 6 months of this year. Their stock has fallen nearly 80% this year.The good news (in all this mess) is that AIG is a much bigger and much more valuable company than, say, West Hams ex-sponsors XL. They have assets that they can auction off to raise the needed capital, and they have the political and financial clout to secure funding to help them ride out the storm. Its tough, but its by no means unmanageable.Long story short, expect AIG to see out this downturn in fortunes. Their deal with Manchester United a paltry $30m/year should not be under any threat (if they paid Manchester United 30m/day, it would take almost 2 years for them to run out of their $20 billion capital raised so far this year) at all.And in the case AIG do fold up, Im pretty sure Gill and co. will have sponsors lined up to take their place. And if theyre not paying as much as AIG, maybe we can get a better-looking logo the next time around?



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