AIG: Footing the Bill for the World's Richest Team

It should have been an unbeatable pairing: behemoth U.S. insurer American International Group ( AIG) teamed with England's most profitable football club, Manchester United.

The entity created the richest shirt-sponsorship deal in English football, at about $100 million for the four-year contract. But come next year, when AIG's name is stripped from the chests of ManU's players, it will go down as just another in the litany of unfortunate sports-branding deals -- and another embarrassing chapter in the sorry saga of AIG.

Indeed, U.S. taxpayers might be less than thrilled to know that tens of millions of their tax dollars are going to fund what is frequently cited as the world's richest sports franchise. And a British one at that.

When Sports Sponsorships Go Bad

It all began in April, 2006, when AIG penned the deal as a means of globally unifying its brand, says Nicholas Ashooh, AIG's senior vice president of communications.

Valued at $1.8 billion by Forbes Magazine this year, Manchester United holds the claim as the most valuable team in sports -- and has long been the most dominant English soccer club, winning 18 league titles in its history. "Manchester United has a huge fan base and is very lucrative in Asia, a key market for AIG," Ashooh says.

Aside from AIG getting its name plastered on United's iconic red jerseys, the sponsorship also included AIG's Goals for Kids. Under the terms of the program, AIG would contribute about $16,000 in the 2006-2007 season to seven children's charities in the United Kingdom, Ireland and around the world, and would donate an additional $1,600 for each goal team scored during the season.

Co-branded credit cards and special events were also part of the AIG/United pact.

And then came the fall of 2008. And the collapse of the company. And the $180 billion governmental bailout. On the notion that it's hard to justify supporting a massively profitable English team on U.S. taxpayer dollars, AIG attempted to pull out of the remainder of the United contract.

"It turned out that it would cost us more to get out of the contract," Ashooh says. "By finishing out the terms we can continue to make use of some of the perks, like special events and game tickets."

Thus, AIG's name stays on the club's shirts for the remainder of the 2009-2010 season. And while the insurer has yet to make the final payment to United, Ashooh said the company will live up to its commitment.

In 2010, Aon ( AOC) will replace AIG with a deal reportedly valued at about $130 million.

Meanwhile, of course, AIG continues to auction itself off in pieces. So far, the company has shed more than 17 subsidiaries, resulting in some $6 billion in revenue. It's not exactly $180 billion, but it's a start.

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