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English champions Man United look to U.S. market

Manchester United CEO David Gill gives an interview following Manchester United Ltd initial public offering on the floor of the New York Sto
Manchester United CEO David Gill gives an interview following Manchester United Ltd initial public offering on the floor of the New York Sto

By Keith Weir

LONDON (Reuters) - Manchester United are expanding their marketing activities in the United States to cash in on interest generated by a new deal for NBC to screen English Premier League soccer, the U.S.-listed club's chief executive said on Tuesday.

United, owned by the American Glazer family, have proved adept at selling sponsorship deals both globally and nationally to help fund a team that won a record 20th English league title on Monday night.

The club is looking at adding a sales office on the east coast of the United States later this year to complement existing operations in London and Hong Kong.

"NBC has the Premier League rights for next season. We should be able to feed off the back of that enhanced and wider coverage," David Gill told Reuters in a telephone interview.

NBC has paid a reported $250 million to wrest the rights to Premier League games from Fox and ESPN for the next three years.

Interest in soccer is growing in the United States where it has traditionally struggled for media exposure in the face of competition from baseball, basketball and American football.

United, who claim to have more than 650 million followers worldwide, have already attracted sponsorship from General Motors.

The team will have GM's Chevrolet brand on their red shirts from 2014 in a seven-year deal worth $559 million - the most lucrative such sponsorship in soccer.

United, listed on the New York Stock Exchange last August, are also negotiating a new agreement with their kit supplier, Nike.

The current long-term deal is worth more than 30 million pounds ($46 million) per year to United. Gill, who is stepping down at the end of June, would not comment on how negotiations have progressed.

United's commercial deals have helped the club to regain the Premier League title from newly rich neighbors Manchester City, funded by cash from Abu Dhabi.

United, listed on the New York Stock Exchange last August, are forecasting revenues of 350 million to 360 million pounds for the year to the end of June, up from 320 million pounds last season and comfortably the highest in the Premier League.

United's shares were floated at $14 and closed on Monday at $17.71, valuing the club at almost $3 billion.

Investors have warmed to the club thanks to new sponsorship deals, a lucrative set of new TV rights agreements for the Premier League and new measures designed to curb costs in a notoriously spendthrift industry.

Gill said the new spending curbs, known as Financial Fair Play, sat well with the United business model. Different versions are being introduced for Premier League clubs and clubs playing in major European competitions.

"We've always operated like this," he said.

"The key cost at any football club is the players and we've had a target of spending no more than 50 percent of revenues on wages," he said.

Premier League clubs on average spend almost 70 percent of their turnover on wages, leaving little over for profit.

($1=0.6560 British pounds)

(Editing by Greg Mahlich)

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