Manchester UnitedShirt front sponsor TeamViewer is under pressure to back out of its deal with the club.
TeamViewer signed a five-year deal worth £235m ($283m today) – £47m ($57m) a year – with United in 2021 to be their sponsor jersey front (Bruno Fernandes wears their sponsored shirt, above)
But there are now fears he could try to walk out of the deal after being accused of ‘bleeding millions’ and ‘appalling judgement’ by investors.
In a week that has seen global superstar Cristiano RonaldoWith United’s contract terminated by mutual consent and the Glazer family, United’s American owners, putting the club up for sale, it would be easy to ignore what has emerged regarding one of United’s key global partnerships.
When the deal was announced in March last year, Richard Arnold, the club’s current managing director and then chief executive, said United were “tremendously proud to be establishing this partnership with one of the software companies world’s most exciting and dynamic”.
No “exit” clause was included in the contract, so where are we?
Athleticism answers key questions…
Why is TeamViewer looking to review its deal with Manchester United?
TeamViewer has come under intense pressure from Petrus Advisers, a London-based investment firm, to find a way out of its sponsorship deals with Manchester United and Formula 1 motor racing team Mercedes.
The German company announced earlier this year that it would not be extending its partnership with United when it expires in 2026. The two parties were reportedly in talks at the time this news broke and dialogue is unlikely to take place. be arrested.
There is an awareness, however, that not all contracts are easy to obtain and it is up to TeamViewer to honor existing sponsorships and prove themselves to be a reliable partner.
When TeamViewer closed the deal 20 months ago, it had emerged from the COVID-19 pandemic with significant revenue due to rapid growth in the technology sector. Since then, however, the bubble burst somewhat after the pandemic and that growth has stalled.
It became apparent that any financial forecasts the company had made were perhaps too optimistic and, looking back, you wonder if the United deal would have been done if TeamViewer knew then what it knows now.
It is common practice for companies to revise their marketing strategy and plans if their growth was not as significant as initially expected.
That said, you can’t escape the fact that a contract remains in place until 2026 and there is no early exit clause to fall back on.
What did TeamViewer say?
TeamViewer, an enterprise software company which replaced automaker Chevrolet as United’s front shirt sponsor, has issued a statement following criticism from Petrus Advisers.
“TeamViewer values constructive interaction and dialogue with investors and is entirely dedicated to the common goal of creating long-term value,” it reads.
“To that end, TeamViewer is continually evaluating its need to invest in its brand and the visibility of its SMB (Server Message Block, a protocol that allows users to communicate remotely with computers and servers) and Enterprise solutions versus corporate strategy and macro-economic outlook.
“As a result, TeamViewer had announced – as part of its second quarter communications – not to extend the partnership with Manchester United beyond its initial term (2026). ‘explore the possibilities of modifying the existing contract.
Who are Petrus Advisors?
Petrus Advisers is an investment firm based in London and owns just under 3% of TeamViewer’s capital.
He also has active investments in Temenos (a software company), Unipetrol, real estate company KWG and Ophir Energy, among others.
What did Petrus’ advisors say?
The investment firm has sent TeamViewer a scathing letter, asking it to stop “bleeding millions” and “quickly disengage from this mess” over partnerships with United and Mercedes Formula 1.
“For months we have privately pleaded with you to leave sponsorship deals that are simply a sign of pride and appalling judgment,” the letter read.
“We therefore demand that you enter into professional exit discussions with a clear objective of a quick fix and do so immediately.”
The letter also noted how TeamViewer’s share price has fallen 26% over the past year, saying this has certified their “free fall from a perceived start to European capital markets to a history of equity almost impossible to invest”.
What impact would that have on United?
There’s no denying that if TeamViewer tried to end their contract with United early, the club would need to find a new shirt front sponsor.
The deal was a significant boost for United and it became their second biggest partnership – kit supplier Adidas has a 10-year £750m deal ($905m today) in place .
And given the gloomy financial outlook around the world, attracting a similar financial windfall will be a severe test of the club’s commercial attractiveness.
However, TeamViewer noted that his profile had increased since the United and Mercedes F1 sponsorship, and you would expect the premier league club to use this to their advantage if they were to enter the global market.
What happens next?
Tuesday’s announcement of United being put up for sale by the Glazer family will no doubt be the focus of concern over the coming months.
When it comes to their deal with TeamViewer, it’s essentially up to the German firm to voice their concerns as it’s them and not the club that’s under pressure from a major investor. A contract is in place and it’s business as usual for United.
That said, various groups of United fans keen on the Glazers leaving have begun targeting sponsors as a means of punching the club’s American owners in the pocket and trying to force them into a sale.
Manchester United declined to comment.
(Photo: Marc Atkins/Getty Images)
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