Wolfsburg: Man Utd’s Champions League opponents ‘facing cuts’
Manchester United’s Champions League opponents Wolfsburg are facing an uncertain economic future because of the scandal engulfing Volkswagen, in accordance with a sports economics expert. German car manufacturer Volkswagen own the Bundesliga club, and might be fined as much as £11.8bn after cheating United States emissions tests. Wolfsburg face United on Wednesday. “When you suffer a big financial hit, you have to look for savings,” Simon Chadwick told BBC World Service Sport. “Sponsorship is one of the things that gets hit during times of austerity. It has to have an impact on the club,” added Chadwick, professor of sport business strategy and marketing at Coventry University. Wolfsburg was created away from a multi-sports club for VW workers in 1945, and the company’s considerable financial expenditure assisted all of them win the Bundesliga label in 2009 and German Cup last season. They are presently fourth in the league table.
Chadwick said: “Depending on the size of the financial dent it remains to be seen whether they can sustain the level of expenditure, and therefore the team’s performance, that we’ve seen over recent seasons.”
Will the Volkswagen scandal affect other clubs?
According to Chadwick, financial trouble at Volkswagen could lead to problems at several other clubs – as well as in other sports. “VW alone sponsors around 18 of the 36 clubs that make up Germany’s top two divisions. But we’re not just talking about Volkswagen here, we’re talking about the Volkswagen Group,” he said.
“That includes Audi, who have substantial sporting interests. For example they sponsor Barcelona. And Audi and VW are both involved in motorsport. “You really can’t underestimate the impact this may have on sport.”
Scandal could affect Volkswagen’s football sponsorship – experts
The pollutions scandal engulfing German carmaker Volkswagen might have effects for the Bundesliga, professionals warned on Thursday, since the company invests hundreds of millions of euros in German football annually. The world’s biggest automaker by sales has confessed to U.S. regulators that it programmed its vehicles to detect when they appeared to be tested and modify the running of their diesel engines to conceal their true emissions. Consequently, VW chief executive Martin Winterkorn resigned on Wednesday. Sports marketing experts say that Volkswagen, fearing compensation claims that might run into the billions, could now begin reviewing sponsoring activities. The company owns German Cup winners VfL Wolfsburg, pumping approximately 100 million euros annually into the Champions League club. VW also owns stakes in Bundesliga champions Bayern Munich and marketed Ingolstadt via its subsidiary Audi, and is also an authorized partner of the German Cup competition. Even more, Volkswagen has different sponsorship deals with more than a dozen other Bundesliga and also 2nd Bundesliga clubs, including Hamburg SV, Schalke 04 as well as Eintracht Braunschweig, while Winterkorn him self sits on the board at Bayern.
What do Wolfsburg say?
Sporting director Klaus Allofs has shifted to comfort concerned fans.
“I can’t say anything concrete about the operations at Volkswagen, but in general the signals are clear. As things stand now, nothing will change,” he said.
“The economic scale of the expenditure, with regards to the entire Volkswagen Group, is certainly not small. On the other hand, their emotional involvement is huge, which is why I am not worried.
“That’s not a calming tactic, but what I firmly believe.”
“There is already public pressure to scale it down,” Pieper said. “I imagine that Volkswagen will become a bit more careful in that respect.”
Pieper estimates Volkswagen’s overall sport and sports marketing activities to be worth several hundred million euros. Yet leaving Wolfsburg, a factory club, is something the experts see as a difficult decision given that the club is an asset for Volkswagen in troubled times.
“One of the things football is good at doing is to engage fans and to create a bond with people who will ultimately buy your cars,” Chadwick said.