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Joining forces Yankees, Man Utd announce joint marketing deal
Updated: Wednesday February 07, 2001 3:11 PM
LONDON, England (CNN) -- Two of the biggest sports teams on the planet on Wednesday announced a joint marketing deal potentially worth billions of dollars to the two clubs. Manchester United and the New York Yankees' parent company unveiled their plans for a strategic alliance at a hotel in Manhattan. United issued a statement about the deal to the London Stock Exchange shortly after it opened and its shares leapt by nine percent within an hour. The arrangement unites the world's top baseball and soccer teams. The teams will share market information, develop sponsorship and joint promotional programs and sell each other's licensed goods. "I believe we have a lot to offer each other in terms of synergy and cross-promotion," YankeeNets chairman Harvey Schiller said at a news conference. "This is a unique alliance in sports and shows that YankeeNets and Manchester United are real pioneers." YankeeNets will help develop Manchester United's North American preseason tour in 2003, which could coincide with the FIFA Club World Championship, which the U.S. Soccer Federation is trying to bring to the United States that summer. "It's yet another example of Manchester United, whether it be on the field or off the field, breaking ground," Manchester United chief executive Peter Kenyon said. Manchester United's stock price increased 13 percent to $1.65 during midday trading on the London Stock Exchange before closing at $1.54, an increase of 5.4 percent. Manchester United, whose market capitalization is $900 million, has been increasingly involved with U.S. companies, recently agreeing to a $440 million, 15-year licensing deal with Nike that starts in August 2002. The Yankees are in the fourth season of a $95 million, 10-year agreement with Adidas. Charlie Stillitano, former general manager of the New York/New Jersey MetroStars in Major League Soccer, brokered the deal between Schiller and Kenyon. "The YankeeNets are an icon sports organization," Kenyon said. "Their executive staff know that North American markets better than anyone. Soccer has developed dramatically in the U.S. over the last 10 years and we believe there is a market for Manchester United content among football fans of all ages." Kenyon, who became his team's chief executive in August, traveled to New York for the announcement along with Sir Bobby Charlton, a member of the team's board of directors and a former England World Cup star. Under the joint marketing deal, a "superclub" will be formed with the UK soccer giant and the mammoth U.S. baseball team selling themselves to potential sponsors and TV networks for millions. There will also be an exchange of merchandising -- with the clubs selling each other's souvenirs and kits. Manchester United, worth about US$800 million (£550 million), is already the richest soccer club in the world with revenue that dwarfs the rest of the English Premiership and major continental European rivals like Barcelona, Real Madrid and Juventus. At the start, the deal involves little more than sponsorships and licensing. Manchester United will sell Yankees merchandise in its stories and the Yankees will sell the soccer team's goods. YankeeNets and Manchester United also will approach companies attempting to put together deals that cover all or some of their five teams.
Later, it could involve television. YankeeNets is attempting to form its own TV network but is bogged down in a lawsuit with Madison Square Garden Network, a division of Cablevision Systems Corp., which owns the baseball rights through this season. Under the new Premier League TV deal that starts in August, Manchester United will have the right to televise its game on a delayed basis and will regain rights to its archive The soccer team already has its own pay cable network, MUTV, which broadcasts for six hours a day, and it could strike a deal to televise Yankees games -- but it would have to negotiate with baseball's commissioner's office, which owns all international rights of the U.S. teams. Trans World International, a division of the International Management Group, bought U.S. rights to the Premier League and sold them to Fox Sports World, a division of News Corp. The FA Cup is not shown on U.S. television and the European Champions League is televised by ESPN, a division of The Walt Disney Co. Kenyon spoke recently of United's desire to "break into the U.S. markets" and this deal makes that possible. United have already made major inroads into the Far East market and are now going for the biggest market in the world. When United and the Yankees join forces they will be able to negotiate television deals from a position of massive strength. United will be joining a group that includes not only the Yankees, but also Stanley Cup ice hockey champion, the New Jersey Devils, and basketball's New Jersey Nets. United's wealth is far in excess of the Yankees, who are the are the wealthiest U.S. baseball team believed to be capitalized at around US$584 million (£400 million). The Yankees' wage bill last season was about US$87 million (£60 million), with Derek Jeter set to become their highest earner on US$17 million (£12 million) a year when he signs a new contract currently under agreement. That dwarfs the pay packet of United skipper Roy Keane, who collects US$75,000 (£52,000) a week. There are comparisons between Jeter and United glamour boy David Beckham. Both move in show business circles and both have high-profile partners. Beckham's wife Victoria is a member of the Spice Girls and one of the country's leading fashion icons, while Jeter's girlfriend is the current Miss Universe. The two clubs also have a firm grip on the major trophies in their respective sports. United, the 1999 European champion, is chasing its seventh English Premiership title in nine years. The Yankees have won three of the last four World Series, and in all a record 26. In December, YankeeNets announced a cooperative marketing agreement with the NFL's New York Giants, who lost to Baltimore in last month's Super Bowl. That deal calls for YankeeNets and the Giants to sell sponsorships together and to examine selling each other's licensed goods. The agreement with Manchester United, which has won 13 English titles overall, is similar to the one with the Giants, said a lawyer familiar with the deal who spoke to The Associated Press on the condition he not be identified.
The Associated Press contributed to this report.
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