The business consultants Deloitte have just produced their annual football money league table, which reveals that Manchester United generated $635 million in 2015/16, the highest in the world. Real Madrid, who topped this table in 2014/15, dropped to third place with $572 million, but they did win the UEFA Champions League.
Whilst the monetary success will no doubt delight the Glazer family who own the club, and the shareholders who have bought United on New York’s NASDAQ market, Uniteds fans are likely to be less impressed.
The last time Manchester United won the Premier League was in 2012-13, when Sir Alex Ferguson was manager. Since then they have finished 7th, 4th and 5th, and have had ignominious exits from domestic cup competitions at the likes of MK Dons, as well as failing to qualify from a Champions League group in 2015-16.
One of the reasons why United have generated so much extra money (up an incredible 63% since they last won the Premier League) is the contribution made by United’s commercial deals.
Football clubs make their money from three sources, Matchday (ticket sales), Broadcasting (TV and media deals), and Commercial (Kit manufacturing, shirt and other sponsorship).
United are limited in terms of matchday income as Old Trafford has sold out every ticket of the 76,000 available for many years, and the club has not raised ticket prices significantly during that period.
So the only way to increase matchday revenue is to have more games at home through good cup and European campaigns. This was true to a degree in 2015/16 as Champions League qualification and winning the FA Cup helped boost matchday income by 18%.
Broadcasting income is determined by the collective deals signed by the Premier League rather than clubs themselves in England. Whilst this has produced some bumper contracts, these are usually for three year periods.
Where United have the most flexibility is therefore in terms of commercial deals. The club’s business strategy is to exploit the huge fanbase (estimated at 659 million by United), and negotiate some global deals. This includes the $925 million ten-year kit sponsorship with adidas, and a $559 million seven-year short sponsorship deal with Chevrolet.
In addition to this United’s commercial whizzkids have signed a number of local partnership deals with companies in individual countries. It therefore has seven separate mobile phone partners (Azerbaijan, Belgium, Caribbean, Hong Kong, Korea, West Africa and China), four alcohol partners, and so on. Last week it signed a deal with Uber, to offer a variety of fan benefits, including a dedicated pick up point at Old Trafford.
Trophies or partners?
All of this has resulted in United’s commercial income increasing by 116% since the reign of Sir Alex Ferguson ended, but has this impacted upon the club’s performance on the pitch?
With an increasing number of commercial partners (now over 70), come an increasing number of demands. Players and management are required for TV and new media commercials, photo shoots, and exhibition matches all over the world.
This means that the opportunity to train, bond and develop, both individually and as a team, especially prior to the start of a season, is compromised. At a time when the sole focus should be on starting the season in peak physical and mental condition, United have been lacking in this regard in recent seasons.
Sir Alex used to run United as a personal fiefdom from top to bottom, and always put the interests of the team ahead of the money men wherever possible.
His successors at Old Trafford, David Moyes, Louis Van Gaal and Jose Mourinho, have not had the same iron control over the activities of the club. Having their stars jet off to appear in photographs and adverts is great for United’s bank balance, but does appear to have affected the club’s early season form.
The distractions caused by the demands of the commercial department pre-season have given United a disadvantage compared to their peers in the Premier League. This has meant that they have been playing catch up during the rest of the season.
So despite United spending big in the transfer market, breaking the English transfer record with the likes of Angel di Maria and Paul Pogba, United have struggled at the start of each season since Ferguson left.
The average points of Premier League champions since it commenced in 1992/93 is 86, or 2.26 points per game. In the last four seasons United have earned a total of 31 points in the first five games of the season, or 1.55 per game.
In the current season, despite a long unbeaten run, United lie in sixth position, twelve points behind leaders Chelsea and four off a Champions League spot.
Real Madrid fans wouldn’t swap a Champions League trophy for being top of the money league. It appears that fans at United may have to settle for a less impressive title, that of the highest money earners, unless the club’s top brass give Mourinho’s men fewer distractions from winning games.