Why Teamviewer is becoming Manchester United’s main sponsor

Teamviewer pays a little more than 46 million euros a year to adorn the chest of the “Red Devils”. The Swabians are convinced that they have made a good deal. Experts and the stock market are not yet convinced.

The Teamviewer logo will soon be emblazoned on this chest by Bruno Fernandes (right).

Dhe experts are amazed: “I’ve never seen a deal like this before,” says Kieran Maguire, who teaches Football Finance at the University of Liverpool, and speaks of a “very strange marketing strategy”. “I can’t think of anything comparable that someone puts 10 percent of their turnover into individual sponsorship,” says Reutlingen sports management professor Gerd Nufer, who heads the German Institute for Sports Marketing.

It’s a deal between two dissimilar companies. On the one hand, the football club Manchester United, which was looking for a main sponsor: one of the largest football clubs in the world, according to its own statements, with more than a billion fans around the world. The owner is the Glazer family from America. On the other hand, the new main sponsor: the Swabian software provider Teamviewer, whose experience in sports sponsoring is limited to the national handball league team Frischauf Göppingen.

The club is bigger than the sponsor

Many rub their eyes: Teamviewer can cost a little more than 40 million pounds (46 million euros) a year to be placed on the chest of the “Red Devils”, as the FAZ has learned from industry circles. “We do not disclose the exact value,” said a spokeswoman on the phone. “But we are of the opinion: We have made a good deal for ourselves.”

For the club, £ 40 million means a decrease compared to the previous main sponsor, the car brand Chevrolet, which is said to have paid £ 52 million. For Teamviewer, the deal accounts for one tenth of 2020 sales, which were around 460 million euros and is expected to reach one billion in 2023. This creates the curious situation that the sponsor makes less sales than the sponsored: Manchester United came to 580 million euros in the 2019/2020 season. A year earlier, before the pandemic, it was a fifth more.

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To the detailed view

Meanwhile, Corona gave the new main sponsor a powerful boost: Sales rose by 40 percent in 2020. The margin remained stable, but is melting significantly due to the new marketing expenses, and not just in the short term: Teamviewer is only about about 56 percent operating margin (measured by Ebitda, i.e. earnings before interest, taxes, depreciation and amortization) in the medium term instead of the previous 56 percent 49 to 51 percent off.

These figures were not mentioned in Friday’s press release, but in the ad hoc announcement intended for the capital market and only in the last paragraph there. From Teamviewer’s point of view, this is the right order: “For us, sponsoring is the more important message. That will take us to another level, ”says a spokeswoman.

“A club that works globally”

The reactions are critical among marketing experts and in the capital market. “We’re used to weird sponsorship deals in the UK,” says scientist Maguire. “But they are mostly with gambling companies and small clubs, where it comes to six million euros a year.” Even the sporting goods giant Nike, known for its advertising, only spends around 10 percent of its sales on advertising. “It’s very targeted. But a software company? One wonders: What is the target group? Is that the same as that of football? “

The spokeswoman counters: “It was important to us to find a club that works globally.” The club has many fans in the growth markets of America and Asia. She speaks of a “global platform for increasing brand awareness”. Maguire also admits: “Everyone in the world of football has now heard of them.” In addition, experts emphasized that Teamviewer could help the club to network digitally with the fans.

Color theory in Manchester

However, the stock exchange is extremely skeptical. On Friday, the price fell by 16 percent at times. This apparently moved Teamviewer to explain the business to analysts in more detail in a conference call. Still, the price continued to decline by almost 5 percent on Monday morning before the stock recovered slightly. Analysts lowered their price targets, such as those of JP Morgan, Warburg, Commerzbank or Deutsche Bank. The spokeswoman speculates that the market will need a few days to digest the news. “The sponsorship will have a very, very positive effect in the long term, hopefully also on the share price.”

The Teamviewer logo at the company's headquarters in Göppingen
The Teamviewer logo at the company’s headquarters in Göppingen: Image: dpa

A presentation with further information is now being prepared for the investors. In general, the hard numbers have been pretty short so far. Not only was the sponsorship volume concealed. There are also other projects that were nebulously referred to on Friday as “further strategic marketing partnerships”. After the conference call with analysts, Gianmarco Conti from Deutsche Bank wrote that Teamviewer was in the process of preparing a further “larger” marketing contract that was aimed strictly at the market of potential corporate customers.

It is still unclear what the new jersey should look like at all. Frischauf Göppingen has adapted to the Teamviewer logo and is now shown in blue instead of green. The “Red Devils” will not allow themselves to do that: Blue is the color of arch-rivals Manchester City.