Manchester United’s front-of-shirt sponsor, TeamViewer, is under pressure to walk away from its deal with the club.
TeamViewer signed a five-year contract worth £235million ($283m today) — £47m ($57m) per year — with United in 2021 to be their front-of-shirt sponsor (Bruno Fernandes wears their sponsored shirt, above)
But there are now fears it could attempt to leave the contract after being accused of “bleeding millions” and showing “appalling judgment” by investors.
In a week that has seen global superstar Cristiano Ronaldo’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 overlook what has emerged regarding one of United’s key global partnerships.
When the deal was announced in March of last year, Richard Arnold, the club’s current chief executive and then managing director, said United were “tremendously proud to be establishing this partnership with one of the most exciting and dynamic global software companies”.
No ‘get-out’ clause was included in the contract, so what is the state of play?
The Athletic answers the key questions…
Why is TeamViewer seeking to revisit 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 the Mercedes Formula 1 motor-racing team.
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 would have been in talks at the time this news was revealed and it is unlikely that dialogue would have stopped.
There is an awareness, however, that not all contracts are easy to get out of and it is on TeamViewer to honour existing sponsorships and show itself to be a reliable partner.
When TeamViewer completed the deal 20 months ago, it had emerged from the COVID-19 pandemic with significant revenue due to the rapid growth in the technology sector. Since then, however, the bubble has somewhat burst post-pandemic and that growth has stagnated.
It became evident that any financial forecasts the firm had made were perhaps overly optimistic and, in hindsight, you wonder whether the deal with United would have been completed if TeamViewer knew then what they know now.
It is standard practice for businesses to review their marketing strategy and plans if their growth was not as significant as initially expected.
That said, you cannot escape the fact that a contract remains in place until 2026 and there is no early exit clause to fall back on.
What has TeamViewer said?
TeamViewer, a business software company that replaced car-maker Chevrolet as United’s front-of-shirt sponsor, released a statement following criticism from Petrus Advisers.
“TeamViewer values constructive interaction and dialogue with investors and is fully dedicated to the common goal of long-term value creation,” it read.
“To that end, TeamViewer continuously assesses 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 against the company’s strategy as well as the macro-economic outlook.
“As a result, TeamViewer had announced – as part of its Q2 communications – not to prolong the Manchester United partnership beyond its initial term (2026). In addition, the company has already communicated its desire to explore opportunities to amend the existing contract.”
Who are Petrus Advisers?
Petrus Advisers is a London-based investment firm and owns just under a three per cent stake in TeamViewer.
It also has active investments in Temenos (a software company), Unipetrol, property firm KWG and Ophir Energy, among many others.
What did Petrus Advisers say?
The investment firm sent TeamViewer a scathing letter, demanding that it stop “bleeding millions” and “rapidly disengage from this mess” concerning the partnerships with United and Mercedes Formula 1.
“For months, we have advocated in private with you that you must exit the sponsorship deals that simply are a sign of hubris and appalling judgement,” the letter read.
“We therefore demand that you enter professional exit discussions with a clear goal of a quick solution and that you do it immediately.”
The letter also noted how TeamViewer’s share price has declined by 26 per cent over the past year, saying this has certified their “free-fall from a perceived start of the European capital markets to an almost un-investable backyard equity story”.
How would it impact United?
There is no escaping the fact that if TeamViewer were to attempt to end its contract with United early, it would leave the club needing to find a new front-of-shirt sponsor.
The deal was a significant boost for United and it became their second-biggest partnership — kit supplier Adidas has a 10-year £750million ($905m today) contract in place.
And given the financially bleak outlook worldwide, attracting a similar financial windfall will be a stern test of the club’s commercial attractiveness.
However, TeamViewer noted its profile had risen since sponsoring United and Mercedes F1, and you would expect the Premier League club to use that to their advantage should they have to enter the global market.
What happens next?
Tuesday’s announcement that United have been put up for sale by the Glazer family will undoubtedly be the main focus over the coming months.
As far as their deal with TeamViewer is concerned, it is essentially on the German firm to raise its concerns as it’s them and not the club coming under pressure from a significant investor. A contract is in place and it is business as usual for United.
That said, various United fan groups keen for the Glazers to go have started targeting sponsors as a way of hitting 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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