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Man Utd & AIG

Patrick Barclay writes:

So what are a club such as this doing with the disgraced name of AIG on their shirts? It is causing consternation in the United States, where United fans cannot wear their replica strips, at least in public, and some members of the House of Representatives have demanded that bailout money from the US taxpayer should not be used “to support an English soccer club” — and it is beginning to dawn here that this symbol of the financial system’s vindictive disintegration has no place in the people’s game.

The honourable course facing United is clear: they should forgo the £18 million or so still due on a contract expiring at the end of next season and put something admirable on their shirts free of charge, following the examples of Barcelona, who advertise Unicef, and Aston Villa (also American-owned), whose friendship is with Acorns, a children’s hospice.

For United, unfortunately, making such a decision would be like Uturning a liner, in that it would involve the scrapping of global mountains of Nike kit and other merchandise already prepared for the summer tour to China, and next season.

I had not given the demand side of this problem any thought before reading this column. But it strikes me that if AIG is the corporate poster-child of the financial crisis, and American fans are keeping their shirts in the closet, all of the shirts that have been produced to date should be re-directed to the "secondary market." Barclay is considering the problem as one of sunk cost in shirts for sale versus the dignity of the club. What would intrigue me is an analysis which quantifies a) the effect on shirts sales of AIG's demise, and b) the decline in value of the stock of Man Utd shirts owned by consumers. "Forgoing" the £18 million from AIG would indeed generate significant value on its own, and a chunk of that would be captured by the club.