Manchester United is a special football club and what they have achieved in world sport is truly remarkable – but what I’m referring to here isn’t so much to do with the record of Sir Alex Ferguson – but rather the global reach and commercial income they receive.
A report published by Forbes in 2010 found Manchester United to be the second most valuable sports brand in the world, behind only the New York Yankees; valuing the brand at $285m and the club is currently ranked third in Deloitte’s Football Money League behind only Spanish giants Barcelona and Real Madrid.
Manchester United started to put their commercial strategy into place by following Tottenham‘s lead and floating the club on the London Stock Exchange in 1991; raising significant capital. Another key part of the enhancing the global brand was through David Beckham. At times Beckham was considered to be the most marketable player in world football. Beckham quickly developed his own global brand and is especially adored in Asia. Beckham has been crucial for Manchester United in opening up commercial income in that part of the world.
Of course success on the pitch plays an important part on a global brand – after all fans enjoy following a successful team. Successful teams tend to gain following from all corners of the globe and people like to follow sports teams simply because they are successful – these people are often known as “glory supporters.”
However, in addition to the financial benefits of having more supporters there are also financial benefits through TV revenue. This is due to the fact that teams that finish the highest in the league gained the most TV money and then of course there is the money received from being involved in the Champions League; the numbers from 2010, showed once again that Manchester United earned the most money in England from TV deals at £104m. (David Conn, Guardian)
Manchester United commercial income in 2010 was a whopping £81m. (David Conn, Guardian)
Relationships with other global brands play a key part in Manchester United’s success; one of the most prominent is a deal with Nike. Nike manages Manchester United’s merchandising operation as part of a £303m 13 year partnership established in 2002. There are a number of other key ventures worth a mention these are Manchester United Finance and the club’s membership scheme called One United; which allows supporters to purchase various branded goods and services. Also Manchester United branded media service – which most notably comprises of MUTV; which allows the club to reach people who don’t live locally.
Sponsorship also plays an important part and many leading companies have had deals with Manchester United for kit supplier and shirt sponsor. In the past Umbro, Admiral, Adidas have all been previous kit suppliers and Sharp, Vodafone and AIG have been previous shirt sponsors. Nike are the clubs current kit supplier and Aon are shirt sponsor, but there also sponsorship arrangements with Audi and Budweiser.
Manchester United are no doubt global giant in the sports world but it’s important that remember their reputation in England as well and a big part of that is Old Trafford. The stadium currently holds 75,957 people. It is currently the biggest club stadium in English football has been the home of Manchester United since 1910 and now hosts prominent sporting fixtures as well as being the home to Manchester United. At the end of last season it was the venue for the League One and League Two play-off final.
There are plans to increase the capacity of the stadium further; these plans could see the capacity increased to 95,000 – making it the biggest football stadium in England eclipsing the 90,000 capacity Wembley Stadium. However, such a development is likely to cost £100m due to the close proximity of the railway line and the need to purchase 50 houses close to the line.
The financial future of the Manchester United brand looks extremely strong and despite the debt that the Glazer’s takeover has put into the club – the strength of the brand, world-wide reputation and significant commercial income makes Manchester United a very stable ship. It also helps that Manchester United continue to be very successful on the pitch and have recently confirmed themselves as England’s most successful club by winning their 19th league title. The money within the Premier League seems to be rising every year and significant interest from outside the UK has seen a newly negotiated significant overseas Premier League TV package. Manchester United’s global appeal is also helped by their continued involvement in the Champions League.
Manchester United supporters also receive a relatively fair deal from watching Premier League football; with an adult season ticket available for as little as £532. (Manutd.com)
The financial fair play rules may have some impact on spending – but the amount of money they make – should ensure they can continue to buy big when they need to. The new rules may in fact benefit them – because of the significant amount more money they generate than their rivals; which may give them more money to play with.
So the future for Manchester United looks good especially with Sir Alex Ferguson at the helm and the Manchester United brand is really incredible and something for other football clubs to aspire to if they can.
Written By James Kent