Sir Alex retires from Manchester United – what’s next for the Reds?

He’s achieved more than any other manager in the history of English football, turned an underachieving provincial club into a footballing powerhouse and gave household names their first break in the game. After winning no fewer than 38 trophies with United, Sir Alex Ferguson has decided that now is the time for him to retire from the game at the age of 71.

During his time in Manchester, Sir Alex has pretty much done it all, and bows out of the game having taken back the Premier League title from nouveau riche neighbours Manchester City. Fergie’s appointment back in 1986 raised a few eyebrows, but after a mixed start, he began to settle into his role, playing an integral role in seeing United grow into one of the world’s biggest sports clubs.

Financial clout

As the trophies won by Sir Alex grew, so did the financial wealth. More fans wanted to come to the club, which saw Old Trafford expanded to over 75,000 seats. At the same time, their global profile grew with their success, which made them more attractive to blue-chip sponsors.

Back in January, United were valued at more than $3bn according to Forbes, making them the world’s most valuable sports team. This came just a few months after United stocks were partially floated on the New York Stock Exchange, where owners the Glazer family hope the club will become more flush with cash than before.

Uncertain future

With David Moyes taking over, it’s likely that he will have a substantial transfer budget to work with this summer. The latest set of financial results for Manchester United are pretty encouraging for the number crunchers – total income for the third quarter stood at a whopping £91.7m, a record figure for the club.

New sponsorship deals, coupled with an improved TV deal have helped to swell the coffers at Old Trafford, while the debt incurred during the Glazers’ takeover has shrunk to less than £400m. And it appears the announcement of the new manager has appeased the New York Stock Exchange, where United were recently listed, following a slight dip when news of Fergie’s retirement broke.

Short-term gains

The current financial picture for United looks pretty good, but there may be challenges ahead. Joshua Raymond from City Index said:

“Manchester United’s commercial dominance has been further entrenched within their quarterly numbers. Revenues rose broadly in line with market expectations of close to 30% to £91.7m, whilst the recent success of winning the Premier League will also enable the club to secure more lucrative sponsorship deals and increases the value of the Man Utd brand.

“There remains an open question however on the sheer volume of sponsorship deals being secured, which may slow but could also impact the long term value of the brand. For now though, these numbers will likely please shareholders.”

Mr Raymond spoke in detail about the impact Sir Alex’s departure could have on the club’s finances. Given that filling his boots would take a massive effort, failure by Moyes to win anything in their first season or two could prove problematic in terms of profit margins.