Yes, General Motors really is giving $600 million to an English soccer club. Actually, as the team involved, Manchester United, is the most valuable team in sports, an investment in the club wouldn’t be a bad idea, considering how everything else is going at General Motors. No, the $600 million GM is giving to Man United over the next 7 years is a sponsorship deal. In return, Man United will wear “Chevrolet” on their jerseys and GM will be able to call itself Man United’s “global automobile partner.” It will immediately have the edge with all those consumers who look to their favorite soccer club for car buying advice.
There is a very good reason government shouldn’t bailout failing companies with buckets of taxpayer money. The money simply allows them to keep on making the disastrous decisions that got them to be a failing company in the first place. At least straight-up bankruptcy would have probably rooted out the kind of people who would think spending $60-70 million a year to have your logo on a soccer jersey was a swell idea.
The other problem with people whose pockets have been lined with lots of taxpayer cash is that they will overspend on their crazy ideas. Man United’s current sponsor, AON, an insurance company was spending around $30 million a year to have their logo on the players’ jerseys. So, they are throwing around twice the cash to advertise a brand that has almost no sales in Britain.
Note: Before AON, Man United’s sponsor was AIG. See how that worked out.
Can we please stop bailing out failing companies? General Motors has moved from a tragedy to a farce.
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