Yankees Forge Soccer Alliance

By GREG JOHNSON and GRAHAME L. JONES

Feb. 8, 2001 12 AM PT

TIMES STAFF WRITERS

Don’t expect to see David Beckham playing center field for the New York Yankees any time soon.

Conversely, there is little chance that Derek Jeter will be playing midfield for Manchester United.

All the same, America’s most celebrated baseball team and England’s most famous soccer club formed what was termed “a strategic alliance” Wednesday that will allow each to take advantage of the other’s vast marketing reach.

It is not so much a sporting agreement as a business one: the baseball rich joining hands with the soccer rich in order to sell even more merchandise to fans who want to be decked out in Yankee pinstripes or Man U red.

Beyond that, it also gives both organizations added clout when it comes to future radio, television or Internet contracts.

Formation of the alliance was announced in New York by Harvey Schiller, chief executive of YankeeNets, the parent company of the Yankees, and Peter Kenyon, Manchester United’s chief executive.

According to a statement, the agreement is “aimed at further increasing their brand awareness and marketing programs worldwide.”

As a practical matter, that doesn’t mean much right away, but the long-term potential is enormous.

“The two together will be stronger than they are individually,” said Jeffrey S. Phillips, a senior vice president with Houlihan Lokey Howard & Zukin, a Chicago-based firm that determines the market value of sports franchises.

“But it comes down to how they’re able to build on that leverage. To the extent that each can penetrate the other’s market is what will create more overall value.”

To Manchester United, whose reach is global and whose Web site receives 8 million hits a month, North America is relatively untapped territory, but the Yankees know it well.

“They have a particularly well developed multimedia business and their executive staff know the North American markets better than anyone,” Kenyon said.

“Soccer has developed dramatically in the U.S. over the last 10 years, and we believe there is a market for Manchester United content among football [soccer] fans of all ages.

“With the help of the YankeeNets, we intend to pursue these and other commercial opportunities in the coming years.”

A Manchester United-owned team playing in Major League Soccer is not beyond the realm of possibility.

The Red Devils, as they are known, are planning a North American tour in 2003. A New York stop is a given, but by then a new Galaxy stadium will be built, so Los Angeles also might be on the itinerary.

Financial terms of the deal were not revealed, but it initially will involve merchandise, with each partner marketing the other’s products.

Longer term, the deal will address the increased demand for programming among media companies, and the constant push by franchises to wring more lucrative contracts from broadcasters.

“It comes down to content, content, content,” said Leigh Steinberg, whose Newport Beach-based sports-marketing firm represents such athletes as Drew Bledsoe and Troy Aikman.

“We’re in an age where content is king, and there are increasingly multiple platforms for the display of that content--television, Internet, radio. And the question is, ‘What fills it?’ ”

Baseball’s dominant team clearly hopes to use its Manchester United connection to build awareness in Europe and, more important, in Asia, where United has a particularly strong following.

“There’s nothing in worldwide sports that’s more valuable right now than the game of soccer,” Steinberg said. “And Manchester United is the world’s best soccer team.”

The latter point might be hotly debated, but there is little doubt that Manchester United is the world’s richest soccer team. Its most recent stock market value in Britain was $1.6 billion.

FutureBrand, a New York-based consulting firm that helps corporations devise branding strategies, in January estimated the value of Manchester United’s brand identity at $258.9 million, second only to the NFL’s Dallas Cowboys, with a value of $274.3 million. The Yankees finished in fourth place with an estimated value of $180.2 million.

The valuations are based on fan base, sales of branded merchandise and media contracts. Although FutureBrand has not yet factored Wednesday’s deal into its calculations, Manchester United might overtake the Cowboys.

“I’d expect that to eventually be the net effect,” said Joanna Seddon, director of FutureBrand’s brand valuation study. “This is a good example of how sports teams have ceased being teams and are becoming brands that touch every aspect of our lives.”

The deal is the third major move by Manchester United in the past year.

* In February, it signed a four-year sponsorship deal worth $48.05 million with Vodafone, the world’s biggest telecommunications firm.

* In November, Manchester United signed a long-term sponsorship and merchandising deal with sportswear giant Nike worth $439 million.

Now comes the most surprising deal of all--with the Yankees.

“We are not in the process of selling our souls to another sport, this is to make friends and grow the sport,” said former Manchester United idol Sir Bobby Charlton, who rates on a par with former Yankee Joe DiMaggio in terms of fan affection.

All the same, there was a certain irony to Wednesday’s announcement.

Little more than a year ago, Rupert Murdoch’s broadcaster BSkyB offered to buy Manchester United for slightly more than $1 billion, but the sale was blocked by the British government.

Murdoch, of course, also counts the Dodgers among his holdings, and now the Yankees have beaten them again.

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Cream of the Crop

Top sports franchise brand values (in millions of dollars):

1. Dallas Cowboys $274.3

2. Manchester United $258.9*

3. Washington Redskins $210.6

4. New York Yankees $180.2*

5. New York Knicks $171.1

6. Real Madrid $155.1

7. Bayern Munich $150.3

8. San Francisco 49ers $147.4