Nike threatens to pull sponsorship deal with Manchester United
Nike is threatening to abandon its record-breaking $694-million sponsorship deal with Manchester United unless the team proves next season that it can consistently challenge for top honours. The deal began in August, 2002, and was meant to last 13 years. But it includes a break clause that allows Nike to decide in July, 2006, whether to continue beyond the 2007-2008 season. Losing the contract would be a blow to U.S. businessman Malcolm Glazer, the team's new owner. Man U received $47.7-million under the deal in 2004, or 12% of its revenue. Ian Todd, vice-president of sports marketing for Nike, said the company will be watching the team's progress closely after Man U failed to win a trophy last year. "Chelsea won the league this year, Arsenal won the FA Cup and Liverpool won the Champions League. So you could argue that Manchester United is only the fourth-best club in England at the moment."
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