AIG will not renew Man United sponsorship

By Rhys Jones

LONDON (Reuters) - Insurance giant American International Group (AIG.N) will not renew its shirt sponsorship of world club soccer champions Manchester United and has already started cutting back costs in relation to the existing deal.

The American company also said in an email sent to Reuters that it was "in active discussions" with the club regarding the current four-year $100 million deal, which runs until next May.

The English club, former home to David Beckham and current team of FIFA World Player of the Year Cristiano Ronaldo, has a huge global fan base, making it one of the top prizes in sports sponsorship.

"In October, AIG told Manchester United that it is not renewing its sponsorship," the company said in response to questions from Reuters.

"Further, AIG has been in active discussions with the club regarding the current contract, which expires in May 2010."

Once the world's biggest insurer by market value, AIG averted bankruptcy in September last year with an $85 billion federal bailout, which later swelled to about $152 billion.

The company has started selling assets and cutting costs to repay part of the government rescue package and joins a string of other companies that have had to rein in spending on sport as the global economic downturn deepens.

AIG said it had been reviewing all sponsorships following the Fed bailout and was already in the process of eliminating marketing, advertising and hospitality costs related to the existing Manchester United deal.