GM Signs Second Deal with Manchester United

General Motors Co. has reached a seven-year agreement with British soccer giant Manchester United to put the Chevrolet name on the players' jerseys, beginning in 2014.

The company will pay $60 million-$70 million per year at least twice what outgoing sponsor Aon Corp. pays plus a $100 million fee, according to Reuters, which cites an unidentified source.

GM signed a separate, broader five-year sponsorship agreement with Manchester United in late May on undisclosed terms. The deal, which was negotiated by then-global marketing chief Joel Ewanick, did not include the valuable right to brand player jerseys.

The automaker ousted Ewanick over the weekend, saying he failed to meet company expectations. Ewanick's downfall was not fully informing GM's top executives of details of the original contract, according to Bloomberg News. The news service, which cites unidentified sources, says the company intends to honor the deal, which will cost it about $300 million.

The Wall Street Journal reports that GM dismissed Ewanick for neglecting to properly scrutinize the financial details of the sponsorship agreement. The newspaper, which cites anonymous sources, says the company decided to go ahead with the shirt sponsorship after changing some of the terms Ewanick had previously negotiated.

It is unclear whether GM's reported dissatisfaction about the financial terms of the sponsorship includes concerns about the soccer club's financial health. On Monday Manchester United said it would make an initial public offering on the New York Stock Exchange to raise as much as $333 million.

The company intends to use the IPO proceeds to help repay the 437 million ($680 million) in debt remaining from its leveraged buyout in 2005. Manchester United's registration statement for the IPO cautions that the debt could damage it financially and reduce the cash flow needed to hire and retain players and coaches.