Manchester United’s worst season since at least 1992 was underscored this week by the departure of the English Premier League champions’ manager David Moyes.
As a business, the club still has few peers in “the beautiful game”.
The team has lost 11 of its 34 league games under Moyes and is in seventh place with four games to go, a year after winning a record 20th English title.
Off the field, United boosted sponsorship sales by 39 per cent in the quarter ended December 31, the most recent for which results are available.
It has bigger ticket and other match-day sales than any club in the world, according to Deloitte. Moyes was less than a season into a six-year contract.
“It’s an unsettling time for the team but sales aren’t going to drop off a cliff,” says Dave Chattaway, who helps compile an annual football club brand ranking for the London-based Brand Finance. “Most other teams are still playing catch-up.”
United is using what the executive vice chairman Ed Woodward calls a “scalpel, not a spade” approach to snagging sponsors from Chile to Vietnam.
Since the Glazer family — Americans who also own the National Football League’s Tampa Bay Buccaneers — took over in 2005, United has set up commercial offices in London and Hong Kong. FC Barcelona followed United last year by agreeing to rent a Hong Kong office.
The English club’s profit for the three months ended December 31 was £19.8 million (Dh122.2m), compared with £19m in the year-earlier period. That is about the same profit Spain’s Real Madrid and Barcelona, football’s biggest teams by sales, make in an entire year.
United had gross debt of £356m at the end of last year, down 2.7 per cent from a year earlier, according to its most recent earnings report. The team was debt-free before the Glazers’ purchase, and it has paid about £600m in interest and other financing costs since then.
The debt sparked fan protests and attempts to buy the team, with thousands of supporters wearing green and gold to represent the club’s origins as Newton Heath.
Some of the newest sponsors in United’s 35-company portfolio — the South Korean food company Ottogi and the Thai confectionery maker European Food — were announced this month.
“It’s a very robust business,” says Dominic Curran, the managing director of London-based sponsorship consultancy Synergy.
“They’ve always been slightly ahead of the crowd. One poor season won’t affect that.”
Randal Konik, a Jefferies Group analyst, says he will keep his “buy” rating, with a US$21 price target.
Manchester United’s share price rose 6 per cent to $18.78 in New York Stock Exchange trading on Tuesday. The Glazers held an initial public offering in August 2012, raising $233m by selling 10 per cent of the club at $14 per share.
Some of the IPO shares were purchased by fans, which also helps support the stock price, says Andrew Wilkinson, the chief market analyst at the US-based Interactive Brokers.
At the same time, investors’ view of United’s earnings outlook could be too optimistic, he adds.
There could be “deeper disappointment at stake should the trophy cabinet remain bare for a second season”.
United will miss out next season by not qualifying for the Champions League for the first time in 19 years. The elite European competition earned the club €35.6 million euros (Dh181m) in prize money last season as well as extra ticket and corporate hospitality sales.
It had match-day sales of €127.3m last season, 35 per cent more than London-based Premier League competitor Chelsea, according to Deloitte.
United’s slump under Moyes will limit future sponsorship deals and affect shirt sales, says Edward Freedman, who headed United’s merchandising unit in the 1990s. A 13-year deal with Nike, worth £303m, expires next year and Mr Woodward will try to increase that income.
United is “living on former glories at the moment”, Mr Freedman says.
The club has no option but to spend on talent if it is to retain its status and value, according to Jim O’Neill, the former Goldman Sachs executive who led a consortium that wanted to buy the team following fan dissatisfaction with the Glazers in 2010.
“They’ve handled the past year so badly I don’t see any other path for them,” says Mr O’Neill, a former member of the club’s board.
“Let’s say we fast-forward to October and United were outside the top four, one would imagine the market would completely derate the share price and then they’ve got problems.”
Making the slide especially painful for United fans is this season’s success for Liverpool, the record English champions before the arrival of United’s previous manager Sir Alex Ferguson.
Liverpool, the 18-time champions, leads the Premier League by five points with three games to play, while Chelsea and Manchester City, whose 2011-12 title was its first since 1968, are still in the chase.
Most United fans will stay loyal while the 136-year-old club seeks to recover its form, and commercial partners will also remain in place, Mr Chattaway says.
General Motors is paying $559m to put its Chevrolet brand on United’s shirts through 2021.
“They have plenty of markets locked up,” Mr Chattaway says.
business@thenational.ae
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The biog
Name: James Mullan
Nationality: Irish
Family: Wife, Pom; and daughters Kate, 18, and Ciara, 13, who attend Jumeirah English Speaking School (JESS)
Favourite book or author: “That’s a really difficult question. I’m a big fan of Donna Tartt, The Secret History. I’d recommend that, go and have a read of that.”
Dream: “It would be to continue to have fun and to work with really interesting people, which I have been very fortunate to do for a lot of my life. I just enjoy working with very smart, fun people.”
RESULTS
Manchester United 2
Anthony Martial 30'
Scott McTominay 90 6'
Manchester City 0
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Results
Ashraf Ghani 50.64 per cent
Abdullah Abdullah 39.52 per cent
Gulbuddin Hekmatyar 3.85 per cent
Rahmatullah Nabil 1.8 per cent
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
More Expo 2020 Dubai pavilions:
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
