jose - soccer

AIG, the American insurance firm, has confirmed it will not renew its sponsorship deal with Manchester United, however the club remain confident of securing an improved deal elsewhere when their current contract ends in May 2010.

The company, which has suffered massive losses during the global economic downturn, says it remained in discussions over its current deal with the world and European champions, which is due to expire in May 2010.

Despite the news United say they have already opened discussions with a number of global companies, who they feel, could offer United an improvement on their current deal. Sahara, the Indian financial services corporation, has already confirmed United have made contact to gauge its interest in sponsoring the club, while Saudi Telecom have also been sounded out about replacing the AIG deal.

The Old Trafford club also have strong links in both Malaysia and South Korea, so even at a time of financial prudence around the world, United are still optimistic of bettering their current contract, worth £19million including various financial packages

"In line with industry practice, Manchester United is exploring the possibility of a shirt sponsor for the new 2010/11 season," a United spokesman said. "The club is in dialogue with a select number of top companies worldwide and has so far received sufficient interest to be confident it can improve on its current £19m annual partnership with AIG."

AIG came close to collapsing in the final few months of last year as it fell victim to the worst housing market since the Great Depression. The situation became so bad that the US government was forced to extend it a $150billion (£109.3 billion) loan, which it is unlikely to get back, which almost certainly saved AIG from oblivion.

AIG reached its perilous state after having to pay out tens of billions of dollars on insurance policies written on mortgages that homeowners cannot possibly repay. It will also make tens of billions of additional losses on complex investments tied to properties that are plummeting in value

(source: timesonline.co.uk)

The soccer team will find it hard to get an equally lucrative sponsorship deal from 2010.It looks like the American government is not interested in bankrolling top soccer brand Manchester United anymore. After taking control of struggling insurance company American International Group last year--as the financial crisis threatened to engulf some of the world's biggest companies--Uncle Sam does not want to renew the insurer's $78.0 million sponsorship deal with the British team.

This will be a problem for Manchester United, which relies on sponsorship for around one-third of its revenues. If it can't get a new sponsor to pay out a similar or higher amount in 2010, when the contract with AIG (nyse: AIG - news - people ) runs out, club owner Malcolm Glazer will find it even harder to repay the debts he saddled the team with when he bought it in 2005.

"They have to find a deal of equal standing, that is the critical issue," said Sean Hamil, an academic at the University of London's Birkbeck Sports Business Center. He told Forbes that this was unlikely to happen, given the troubles facing the corporate world, and that this would have an effect on Manchester United's ability to keep paying for star players.

As for who could replace AIG, speculation is rife it could be insurer Prudential (nyse: PUK - news - people ) or Indian conglomerate Sahara India. Either way, there are already signs that Glazer is tightening his belt, according to Duncan Drasdo, of the Manchester United Supporters' Trust. He told Forbes that Glazer was rumored to be putting his American football team, the Tampa Bay Buccaneers, team up for sale. He also said that Manchester United was taking ticket money from members' bank accounts earlier than planned.

AIG is not the only example of how the economic crisis is seeping into the sports world. German automaker Bayerische Motoren Werke (other-otc: BAMXF - news - people ) lost Swiss bank Credit Suisse (nyse: CS - news - people ) as its Formula One sponsor on Tuesday, while Japan's Honda quit the auto sport in December.

Even in soccer, two high-profile Premier League sponsors are banks: Barclays (nyse: BCS - news - people ) and Northern Rock. A spokesman for Barclays told Forbes the bank had not yet begun talks on renewing its Premier League sponsorship contract, and that it would not comment on the financial details. A Northern Rock representative was unavailable for comment.

Manchester United was ranked the most valuable soccer team in the world by Forbes last year, with a team value of $1.8 billion.

(source: forbes.com)

American insurance giant AIG said on Wednesday it would not renew its shirt sponsorship deal with European and world club football champions Manchester United.

The American company also said in a statement e-mailed to Reuters that it was "in active discussions" with the club regarding the current four-year $100 million deal, which runs until next May.

Once the world's biggest insurer by market value, AIG averted bankruptcy in September last year with an $85 billion federal bailout, which later swelled to about $152 billion.

The company has started selling assets to raise funds to repay a part of the government bailout.

"Following the loan from the Fed, AIG has been reviewing all its sponsorships to identify those essential to maximising the value of AIG businesses," AIG said in a statement e-mailed to Reuters.

"In October, AIG told Manchester United that it is not renewing its sponsorship. Further, AIG has been in active discussions with the club regarding the current contract, which expires in May 2010," it added.

Manchester United was not immediately available for comment.

The news comes a day after it emerged that the English Premier League champions had approached Indian company Sahara as a potential replacement for AIG.

"We can confirm that we have received a proposal for team sponsorship, it is an elaborate one," Abhijit Sarkar, spokesman for the diversified Sahara Group, told Reuters on Tuesday.

Sahara, which sponsors the Indian cricket team, is an unlisted group with interests from financial services to real estate.

(source: ibnlive.in.com)