Sports and Recession

Manchester United makes the Citi Field debacle look tame.

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David Wright ain't got nothing on me.

When the government awarded Citigroup $45 billion in bailout money, a sponsorship name that had been settled upon years ago became—all of the sudden—embroiled in controversy. The New York Mets granted Citigroup the naming rights to its new stadium back in 2006. But since Citi's economic meltdown, and the subsequent government handout, the $20 million naming rates have essentially been transfered to tax payers. The move has some in Congress calling for a name change.

But the global economic recession has hit athletic sponsors in Europe, where soccer jersey sponsorships form a significant portion of club revenue, even harder. Depending on the team, companies can display their names on the front of a jersey for anywhere from about $600,000 a year for lower-tier teams, to Manchester United's $26.6 million a year deal with AIG. Because banking and insurance institutions have traditionally been the most common team sponsors, the infection of European financial institutions has derailed many sponsorship deals. For the first time in a decade, Europe's six biggest soccer leagues all reported decreases in jersey sponsorship revenue.

Just as Citi's collapse led to naming rights issues for the Mets, AIG's demise has spelled trouble for Man U. The insurance giant received a $150 billion bailout in November, and shortly after announced that it would not renew its jersey deal with Manchester when it expired in 2010. Manchester is still soccer's most valuable team, with a net worth of $1.8 billion, so the odds it finds another sponsor are pretty good. Still, Man U is just one of many facing a potentially logoless future.

Spain's Deportivo La Coruña almost went bankrupt after its main sponsor, developer Martinsa-Fadesa folded. And electronics giant Philips is pulling its deal with Dutch squad PSV Eindhoven after 26 years together. Eindhoven had maintained the same jersey since 1982, but the company decided to change its sponsorship policy last year.

Belgian club Anderlecht is also losing its long-time sponsor, the Dutch-Belgian banking group Fortis. Anderlecht Chairman Roger Vanden Stock decided to let the sponsorship expire after 28 years because he didn't want the bank's failure to reflect on the team. The team will now be sponsored by French bank BNP Paribas. (The Dutch team Feyenoord, also sponsored by Fortis, will change its sponsorship to Fortis ASR, the insurance branch of the banking company.)

In the English Premier League, West Ham United was left sponsor-less when its main backer, travel group XL Leisure Group, went kaput, but it was able to secure SBOBET, an online betting site, as a replacement. And West Bromwich Albion is still sponsorless after T-Mobile declined to renew its deal with the team last year. Surprisingly, the team's blank jerseys have become a hit among fans.

Then there's Italy's SS Lazio, who took a novel approach to their sponsor situation. The squad, which has played with blank jerseys all season, signed a one-game sponsorship deal with the makers of Pro Evolution Soccer 2009, a popular video game. It's the first time that a video game has been tapped as a jersey sponsor. And it just shows that club owners are looking far and wide for a logo they can slap on the front of their shirts.

Meanwhile, stateside, things don't seem so bad. Just last week, Amway made headlines with its multi-million shirt sponsorship deal of MLS' San Jose Earthquakes. It's seen as a major coup for the Quakes considering the financial climate. Only four (of 15) MLS teams lack shirt sponsorships heading into the 2009 season. As for the Mets, they can take solace in knowing that they at least have a name to grace their stadium.

But Germany's Werder Bremen and Romania's Steaua Bucharest (both Citi sponsors) should take note.

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