Was GM Marketing Exec Forced Out Over ... - Business Insider

General Motors' chief global marketing officer Joel Ewanick resigned from the company Sunday after striking a questionable "European soccer-sponsorship deal," according to the Wall Street Journal.

That deal is almost certainly Chevrolet's sponsorship of Manchester United, which Business Insider opined back in June was "a waste of money."

UPDATE: By amazing coincidence, Manchester United announced today that Chevrolet will replace Aon as its shirtfront sponsor in the 2014/15 season. The GM exec quoted in the official statement is Alan Batey, North America vp/U.S. sales, NOT Ewanick, even though Ewanick was working on the deal in June.

EARLIER: It was the second controversial deal under Ewanick. The other one involved a belatedly disclosed payment to a marketing agency at which the CFO's wife worked.

Ewanick's departure comes after a tumultuous reign at the company. He won praise for trying to rationalize GM's $5 billion global ad spend by consolidating creative and media buying duties on its ad account at fewer agencies; a move he predicted would shave $2 billion in expenditures.

More controversially, he pulled $10 million in ad spending from Facebook right before its IPO and removed his brands from next year's Super Bowl. Those acts generated a lot of heat in the media, although in private ad execs frequently confess that advertising in either venue is often a waste of money.

Ewanick's exit comes with a bunch of tantalizing mysteries. Neither Ewanick nor GM explained the move in detail. The WSJ reported:

GM told Mr. Ewanick that he was being removed for failing to properly vet the financial details of a European soccer-sponsorship deal that he struck recently, according to people familiar with the matter.

The Detroit Free Press suggested he was forced out:

"I can tell you that he failed to meet the expectations the company has for its employees," said GM spokesman Greg Martin.

Ewanick tweeted (!) a non-statement:

?It has been a privilege & honor to work with the GM Team and to be a small part of Detroit?s turnaround,? Ewanick said in a post on Twitter. ?I wish everyone at GM all the best.?

It is the Man U deal, however, around which swirls the most questions.*

It is not known how much the Man U deal is worth.* The previous deal with Aon was worth ?20 million ($31.4 million) a year, so GM's is likely more than that. At the time, Ewanick appeared to have made the pact in haste. He said:

When Manchester United played against Manchester City, "that audience around the world scaled to 600 million people," Mr. Edwards said. "Compare that to the Super Bowl here in the States, which is roughly 110, 115 million, and you're talking five times that audience watching one regular-season game. It's significant."

Um, really? Six hundred million people watching the Manchester derby? It's was a great, great game this year, no doubt?it decided the English Premier League title in City's favor?but it's doubtful that many people watched the game.

A "650 million" number was reported in the New York Times at the time, without any sourcing behind it. Elsewhere in the media, reports describe an audience of 600 million, but almost all of those reports did not name a source for that audience rating.

Notably, the Times didn't say 650 million watched the game, just that it would be broadcast to 650 million homes. The Times did not specifically say how many actually tuned in?and nor did anyone else. (The Champions League final only generates 100 million or so viewers, for instance.)

Manchester United says it has 659 million followers around the globe, which is not the same as the number of viewers who watch a match.

In other words, could it be the case that Ewanick agreed to the deal thinking it would generate a much larger audience than it actually does, thus triggering his downfall?

The second possibility was the Mother New York fiasco. The agency made a series of videos for GM that few people watched, and was paid $600,000. Mother partner/COO Pernilla Ammann is the wife of CFO Dan Ammann. GM eventually disclosed to the SEC that "not all the required procedures were followed" when the $600,000 was paid.

Neither move looked good.

*Correction: This item, originally written before the new shirtfront deal was known about, previously suggested the deal might not have been for the shirtfront. The story has been updated to reflect the new announcement.

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Source: http://www.businessinsider.com/was-gm-marketing-exec-forced-out-over-manchester-united-deal-2012-7

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