Manchester United’s Business Model
You can find out more about the club’s business model here, but basically it boils down to relentless growth of commercial revenue (sponsorship, retail, merchandising, licensing, new media etc.). That encompasses official Noodle partner deals, the mammoth Adidas kit deal, and loads of other things across many global markets.
Manchester United’s Business Strategy
United’s business strategy, according to the club website, has 5 key elements:
– Expand portfolio of global and regional sponsors
– Enhance reach and distribution of broadcasting rights
– Develop retail, merchandising, apparel and product licensing business
– Diversify revenue and improve margins
– Exploit new media and mobile opportunities
Clearly, the club’s business team sees social media and online footprint as a key part of this, and it’s like the club will seek to further monetise its global digital presence in future.
And they’re also pretty happy about how the record-breaking Adidas deal looks.
United, the Glazers and the State of the English Game
So, despite their universally-maligned leveraged takeover, have the Glazers really been so bad for United? They have increased the value of the club from £790m to £2bn, but some city types remain sceptical about the value of Man Utd’s shares. Owen Gibson suggests that “by mixing a savvy global commercial strategy with the genius of Ferguson in eking out continued success on a budget and a large dollop of luck in booming TV-rights income, they made it through their riskiest period unscathed,” and now Van Gaal is seemingly free to target any player in the world.
FFP has played into our hands, and whilst the club still has £380m in debt, Manchester United look to be in an extremely strong financial position which is only set to grow in value notwithstanding an unforseen implosion of some sort in the short term. Even if we did have another awful season or two – if and when Giggs takes over as manager, for example – the enduring mythology of Manchester United and the scale and passion of our global support would surely ensure our ability to remain somewhere around the very top of English football.
What the business story says about the wider English game is another question. Have we veered far too deep into the capitalist abyss? Are we losing, or have we already lost, the unpredicable and opportunity-driven essence of our national game? Talk of Britain’s elite employers creating a class ceiling with ‘poshness tests’ has been all over the news this week, but is something analagous happening in football? Has elite top-flight English football become a playground for the super-rich and the established ‘brands’ (which, ultimately, is what United are), whilst locking out smaller clubs with big ambitions?
In a society where social mobility is seemingly under increasing threat, is a parallel process happening across our football leagues? FC United have been doing amazing things, but could they ever really continue their mimetic Football Manager journey to its fantasy conclusion? It seems increasingly unlikely, and when you reflect on Man Utd’s humble roots; their epic triumphs against the odds, it’s sad to think no other club might one day write a similar, albeit hopefully less tragic, story. That’s the context for these figures, and it’s topic that needs continued debate.