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Earlier this morning, General Motors (NYSE: GM) confirmed a five-year sponsorship deal between Chevrolet and an English soccer club, Manchester United. This announcement comes in the heels of GM's decision to pull its ads from Facebook (NASDAQ: FB), as it did not get the desired results on the social network's advertising platform. As a result, GM has been looking for a more effective way to reach its audience.

Manchester United is one of the most successful soccer teams in England and, according to the latest studies, the most popular club in the world with the fan base of 659 million. Considering the enormous global audience and several English Premier League championships that the club has won in the past 20 years, this sounds like an excellent deal for Chevrolet. However, some of the previous sponsors saw drastic declines in their stock prices after signing their deals with Manchester United.

Benzinga took a look at the share prices of the clubs three main sponsors in the 2000s:

1. Vodafone Group (NASDAQ: VOD)

The English mobile communications company was the Manchester United shirt sponsor between 2000 and 2006. The deal was signed near the peak of technology bubble and Vodafone's stock fell approximately 40% during the sponsorship. Manchester United, on the other hand, won two league titles and one FA Cup title in those six years.

2. American International Group (NYSE: AIG)

New York-based insurance giant signed a shirt sponsorship deal with Manchester United right before the global financial crisis in 2006. By the end of the sponsorship deal in 2010, AIG's share price had fallen whopping 96%. Yet again Manchester United won three league titles and one UEFA Champions League trophy.

3. Aon (NYSE: AON)

Aon became Manchester United's shirt sponsor in 2010 under a four year contract. After the first two seasons, the insurance company's share price has appreciated by approximately 20%. Manchester United has won one league championship during this time period, so it seems to possible to be mutually successful. However, the company has still two years left in its sponsorship contract and the economical crisis in Europe might easily bring Aon's shares significantly lower.

Naturally, the falling share prices were not caused by the Manchester United sponsorship, but it shows that no matter how popular the advertising platform is, it will not save the company from any underlying problems. Therefore, General Motors might not be any better off by switching from Facebook to Manchester United.

Nevertheless, Manchester United's popularity in Asia could provide an opportunity for Chevrolet to boost its brand image in the region. Manchester United has made a conscious efforts to increase its popularity especially in China, which is a key market for Chevrolet. Hence, a soccer club might prove to be a better way to advertise in China than social network that is officially blocked in the country.

You can follow me on Twitter @TuomoKallio.

Posted-In: Aon. AIG Chevrolet English Premier LeagueLong Ideas News Short Ideas Contracts Trading Ideas Best of Benzinga

 

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