Manchester United Football Club unveiled their new kit for the new season last month. From this year, the advertising space on the chest of Manchester United’s shirts will be replaced by a red and white Snapdragon logo, accompanied by a large Snapdragon logo. 

Typically, a team’s sponsorships are divided into tiers based on advertising placement and partnership amount. The most valuable advertising position is the chest position, reserved for the top main sponsor. The sponsorship amount for this position is also a direct indicator of the club’s commercial value.

Qualcomm has spent a lot of money to become the main sponsor of Manchester United. They signed a sponsorship deal worth 225 million USD (about 5,673 billion VND) for 3 years with Manchester United, equivalent to 75 million USD per year. Qualcomm also has the option to extend for 2 more years.

For tech giant Qualcomm, the sponsorship is not a huge deal. In its previous fiscal year ending March 31, 2024, Qualcomm had $35.8 billion in revenue and $8.386 billion in net income. According to MediaRadar estimates, Qualcomm spent less than $100 million on advertising last year across more than 250 different media platforms.

While Qualcomm has a large advertising and marketing budget, sponsoring a top team like Manchester United is still a big move. Qualcomm’s annual marketing budget may need to double in the future. Why is Qualcomm spending $75 million a year to sponsor Manchester United?

10 years in the dark

Manchester United is one of the most famous legendary football clubs in England and the world. Under the leadership of legendary coach Sir Alex Ferguson, Manchester United has been the undisputed number one team in England for the past 30 years, winning 13 Premier League titles and two Champions League trophies, the number of titles far exceeding any other team in the same period.

However, since Ferguson retired in 2013, Manchester United have been in a long slump. In the past 12 years, the former Premier League champions have failed to win a single Premier League title, finishing runners-up just twice. Even qualifying for the Champions League has become a luxury.

Poor performance comes with bad management. Although Manchester United’s board of directors does not hesitate to spend money to buy players at high prices, they have invested a lot of money to bring in expensive players such as Pogba, Lukaku, Antony, Sancho, but these high-paid players when coming to Manchester United fell into difficult situations with the team.

As the team’s performance has not improved, Manchester United has been constantly changing coaches. In the past 10 years, they have changed 5 coaches and 3 interim coaches. Dutch coach Erik ten Hag was also almost fired this summer.

While Manchester United sank into recession, cross-town rivals Manchester City, under the guidance of legendary new coach Pep Guardiola, have become a Premier League giant, winning six titles in the past seven years. At the same time, Liverpool, Chelsea and Manchester City have won the Champions League, becoming the new flagship of the Premier League in Europe.

What makes Manchester United fans even more upset is that, in the past 10 years, Manchester United has not only had poor results but also become the laughing stock of the football world. Almost every season, Manchester United has rumors of internal discord, chaotic personal lives off the field, conflicts between coaches and players; even the legendary Cristiano Ronaldo, upon his return, publicly criticized the coach and the board of directors.

In fact, Manchester United is no longer the dominant team of the Premier League as before, nor is it strong enough to compete for the Premier League title. Even in the “Big 6” group (the 6 strongest teams), Manchester United is not confident of being in the top 4 to win a ticket to the Champions League.

Rescue funding

It is no exaggeration to say that Qualcomm has saved Manchester United in their most difficult time. Manchester United’s previous sponsor was German software company TeamViewer, the two sides started cooperating since 2021, with an annual sponsorship amount of only 47 million euros (equivalent to 50.8 million USD), much lower than Qualcomm’s 75 million USD.

Furthermore, after just one season, TeamViewer withdrew. In December 2022, TeamViewer and Manchester United announced that they had reached an agreement that would allow Manchester United to buy back the shirt sponsorship deal. In other words, Manchester United would find a new sponsor themselves, and once the new sponsor was identified, TeamViewer would withdraw.

Manchester United’s partnership with Qualcomm comes within this context. In the summer of 2023, Manchester United’s head of commercial partnerships, Victoria Timpson, traveled to San Diego to meet with Qualcomm’s marketing director, Don McGuire, to discuss a sponsorship deal.

Qualcomm has long been a technical partner of Manchester United, and the two sides have had a good working relationship. After several months of negotiations, the two sides finally reached a sponsorship deal worth $225 million over three years in October last year.

Notably, Qualcomm has removed the performance element from the sponsorship deal. Whether Manchester United qualify for the Champions League or not, the $75 million annual sponsorship remains the same. This clause is of great significance to Manchester United, a team that has often suffered revenue losses due to failure to qualify for the Champions League.

Manchester United recently played a pre-season friendly against Spanish side Real Betis at the Snapdragon Stadium in San Diego (sponsored by Qualcomm). The match was essentially a tribute match by Manchester United to their sponsor Qualcomm. Manchester United won the match 3-2.

For Manchester United, partnering with a tech giant like Qualcomm also helps expand into the US market. Qualcomm also mentioned in the statement that it hopes to encourage the Premier League to host Manchester United friendlies in the US, similar to the NBA hosting pre-season friendlies in Asia. Qualcomm will also invite the Manchester United women’s team to San Diego to play a friendly against the San Diego Wave of the US women’s league.

The most valuable club in the world

So the question is, why is Qualcomm sponsoring a rebuilding Manchester United, instead of sponsoring more successful clubs? Is it just because Manchester United’s jersey and Snapdragon’s logo are both bright red? After all, among Europe’s top clubs, Liverpool, Arsenal and Bayern Munich also have red jerseys, which are also very suitable for Snapdragon’s logo.

During his speech at Qualcomm’s Snapdragon Summit last October, Qualcomm CEO Cristiano Amon was asked about this issue. Due to time constraints, Amon did not elaborate, only mentioning the huge influence of Manchester United globally.

In fact, if you only look at the achievements of the past 10 years, Manchester United is not the top team in the Premier League. But from a commercial development perspective, Manchester United still benefits from the brilliant success under Ferguson, continues to have global influence and remains the most valuable football club in the world.

The Premier League is the most commercially valuable football league in the world. Last year, the Premier League’s television revenue was €3.5 billion, higher than the combined revenues of La Liga and Bundesliga (€2.05 billion and €1.46 billion respectively). In the 2023 financial year, Manchester United’s total revenue is expected to reach $785 million.

Despite their poor form, Manchester United still has the largest fan base in the Premier League. In the 2023-24 season, Manchester United’s average attendance at Old Trafford reached 73,500 per match, the only Premier League team to have an attendance exceeding 70,000, ranking third in Europe.

In terms of social media followers, Manchester United’s global fan base is second only to Real Madrid and Barcelona. According to Manchester United’s official statistics, the club has a total of 1.1 billion fans and followers across social media platforms. Third-party data Kantar estimates Manchester United’s global fan base at around 650 million.

Manchester United is also the most valuable sports club in the world. Late last year, Britain’s richest billionaire Jim Ratcliffe bought 25% of Manchester United’s shares, valuing the club at a total of $6.3 billion, setting a record for the highest valuation of a sports club in the world (Real Madrid and Barcelona are affiliate clubs and cannot be listed for sale).

Consumer Electronics Industry Sponsors Top Club

Perhaps this is why Qualcomm does not hesitate to spend money to sponsor Manchester United to promote the Snapdragon brand. Although Manchester United has not had a good record, they are still the top club in the world with the largest fan base and the most excellent commercial development ability. Advertising on Manchester United shirts brings maximum effectiveness to the brand.

Sponsorship of top football clubs by consumer electronics giants is nothing new. Samsung, Siemens, BenQ, Sony have sponsored top clubs such as Real Madrid, Juventus and received good commercial benefits.

Earlier this year, PC giant HP signed a $70 million-a-year sponsorship deal with Real Madrid, putting its brand on the sleeves of Real Madrid’s shirts. Real Madrid’s shirt advertising is being carried by Emirates, which pays an annual sponsorship of €75.7 million. Combined with the $130 million from shirt sponsor Adidas, top club Real Madrid earns €270 million a year from shirt advertising alone.

Compared to consumer-to-consumer (B2C) consumer electronics giants like Samsung and HP, Qualcomm is a business-to-business (B2B) company. It doesn’t sell products directly to consumers, but rather sells chips to phone, computer, and car companies.

In theory, Qualcomm doesn’t need to invest heavily in advertising like Samsung and HP. The Manchester United sponsorship is Qualcomm’s first for a top sports club. Previously, it had only sponsored the Mercedes-AMG racing team in F1.

Why is Qualcomm suddenly sponsoring a football team? Notably, Qualcomm CEO Cristiano Amon is Brazilian, a country that loves football. In an exclusive interview with Sina Technology last year, Amon said that like most Brazilians, he was fascinated by football since he was a child. His favorite player was Ronaldo — and it wasn’t Cristiano Ronaldo, but Brazilian Ronaldo.

Perhaps Qualcomm’s sponsorship of Manchester United is partly due to Amon’s personal preference. Qualcomm holds its annual Snapdragon summit in Hawaii and even names its projects after Hawaiian locations, largely because Amon loves vacationing there.

Snapdragon promotion spares no expense

When asked why they sponsored Manchester United, Qualcomm’s CMO Don McGuire explained that Qualcomm chose to sponsor the team and not the league because of passion. Fans love the team and the players, not the league platform. The main reason Qualcomm sponsored Manchester United was because the team has 1.1 billion fans worldwide.

McGuire also said that sponsoring Manchester United is more profitable than advertising in the Super Bowl in the US. He explained that the cost of advertising in the Super Bowl each year is $6.5 million for every 30 seconds, just to be viewed by more than 100 million viewers in the US. Meanwhile, Manchester United plays at least 40 games each year, and billions of viewers around the world can see the Qualcomm logo on Manchester United’s jerseys.

In the coming era of artificial AI, Qualcomm’s Snapdragon brand is in a period of rapid growth: with significantly enhanced computing capabilities, Snapdragon processors not only push smartphones into the age of artificial AI, but also with the X Elite processor challenge the dominance of Intel X86 chips in the PC sector.

ARM CEO Rene Hass publicly stated at Computex Taipei that Arm-based chips will account for more than half of the Windows PC market in the next five years. Amon made a similar prediction, and some OEMs even believe that Arm chips will account for 40-60% of their total sales in the next three years.

In addition, Snapdragon’s smart cabin platform has become the top choice for many smart connected cars. Amon said that automotive has become Qualcomm’s fastest growing new business area.

Two big tech trends, artificial AI and smart connected cars, have created unprecedented growth opportunities for Qualcomm’s Snapdragon. Amid the massive growth, Qualcomm’s stock price has increased 47% this year, giving it a market value of nearly $230 billion.

Qualcomm clearly believes that as the company enters its best growth phase, it makes sense to increase its advertising and marketing investment to promote the Snapdragon brand. The $75 million annual sponsorship of Manchester United is well worth it. Regardless of Manchester United’s performance, they provide maximum brand awareness for Qualcomm.