True of false: The higher they're priced the harder they fall

On Friday 10^th August, 2012, Manchester United made its debut on the New York Stock Exchange, a step which valued the club at £1.5bn making it the most valuable club in the world, followed by Real Madrid who are estimated to be worth £1.2bn.

16.7 million shares are to be sold (10% stake), which will raise money which was originally said to be used to pay off the club’s debts. It has now come to light that half of the money raised to date may have gone to the Glazer family with a smaller proportion spent in reducing the club’s debts. This has led to United fans worldwide to boycott the club’s sponsors’ products to prove the brand is worthless without the purchasing power of the loyal fans.

The club’s IPO (initial public offering) was priced at $14 which was below the $16 to $20 per share the club was initially offering investors. The IPO was cut the night before their debut on the stock exchange as a result of comments from Wall Street analysts and Facebook’s disastrous unveiling on the stock market in May. Facebook’s shares initially sold for $38 are now worth only $20, so it’s no wonder Man United was cautious with their IPO. One week after their debut on the stock exchange, United’s shares fell 5% below their IPO price before somewhat bouncing to just 1.99% below the IPO.

Both Facebook and Man United have fans all over the world, but these fans don’t seem to count for much on Wall Street. Facebook share owners are now able to sell their stakes in the company, which may lead to a further downward spiral in share price. Are Man United facing the same destiny? Some analysts believe Man United’s share price was wildly over-valued; some saying it is truly worth $4.97 per share.

Will it be a case of the higher they’re priced, the harder they fall? Only time will tell! Who knows, maybe the new signing, Robin Van Persie, has the answer!?

-      John Heavey, Marketing Advisor

Olympics 2012 & Branding

The 2012 London Olympics have been the main talking point of the world for the last number of months. With an audience of over 20 million tuning in for the 100m final, people have had plenty to say about the events, the athletes, the countries involved and also the branding and marketing of the products associated with the event. The Olympics brand is currently the second biggest global brand after Apple, and is worth over $47.6 billion. Many of the top tier companies would pay up to $100 million in order to become official sponsors of the event (CNN). 

Consequently, there has been a lot of speculation in the media recently about unofficial sponsors using ‘ambush’ marketing techniques in order to to try to increase sales of their products. The International Olympic Committee (IOC) stated that athletes are not permitted to promote any brand, product or service within a blog, tweet or any other form of social media, which is not an official sponsor of the Olympics. However, one brand which has been focused on in the media is “Beats” headphones by Dr Dre.  It has been reported that the company sent these headphones with a special Union Jack pattern, to athletes at the British Olympic camp. The athletes accepted the headphones and went on to publicly thank the company using Twitter. This particular  brand is not new to these types of marketing tactics as they previously provided the two teams participating in the 2012 NFL Superbowl with their products also.

 

As a result of this, many Olympic athletes have criticised the IOC's code of conduct for not allowing them to mention their personal sponsors on social media during the games. After all, these brands play a huge role in providing the athletes with what they need to become Olympians.

There continues to be huge controversy over the use of branding in the Olympics. The big brands such as Adidas, McDonalds and Visa, have paid huge amounts of money to be associated with the Olympics brand. However many other companies such as Nike, Paddy power and Google have used the Olympics strategically, in order to market their products or have their services used.  There are a lot of different views as to what is right and what is wrong with regards to branding and the Olympic games. It will be interesting to see what will come out of these branding issues once the Olympics are over. Will the IOC consider changing these strict rules? 

Ross Hartnett MDP Advisor