Sunday 20 October 2019

Manchester United target 94 different sectors for commercial deals

Simon Stone

MANCHESTER United are targetting an incredible 94 different sectors in which to do commercial deals.

Whilst the Glazer family have attracted massive criticism over their ownership of the Old Trafford outfit, and the debt they loaded onto the club, they have overseen a quite phenomenal rise in their income.

 

At the time of their takeover in 2005, United's income from commercial revenue alone has risen from 48.7million to its present figure for the first three-quarters of the present financial year, 114.5million.

 

United have achieved that by targetting both regional and global sponsorships, mixing up the recent £120million eight-year partnership with AON for, amongst other things, naming rights to the Carrington training ground, with smaller deals with companies such as gloops, who last week became the Red Devils' first social gaming partner.

 

Yet, far from reaching the end of their commercial drive, it appears United are only just beginning.

 

With one office already open in Hong Kong and another set for the United States to tap into the number of companies who want to make in-roads into the Far East market, where United retain such popularity, the scope for expansion is enormous.

 

"The number of categories we can go after to do deals can go up to a comfortable 94," said United executive vice-chairman Ed Woodward, who will replace David Gill as chief executive in the summer.

 

"I don't believe we will ever get to that level, partly because of the number of deals that are pursued on a regional basis.

 

"We started in mobile, then financial services, soft drinks, tyres. There are other ones coming through as well.

 

"We are still going after a huge number of global categories. The opportunity remains huge because we only have 13 or 14 in place.

 

"At some point the global growth will slow down and be replaced by even more accelerated growth in regional. But that is a long way out."

 

It is a fascinating approach to the business of maximising income, even if it seems to have little to do with the original ideal of football being a community-based enterprise.

 

With a mind-boggling £357million shirt sponsorship deal in place with Chevrolet from 2014-15 and negotiations with Nike presently taking place over the manufacturing side of the United empire, it is almost as if actual results on the pitch are coincidental.

 

On May 13, fans will get the chance to see their team parade the Premier League trophy on a bus tour, celebrating a record 20th championship success.

 

Yet, as Woodward points out, defeat in the last 16 of this season's Champions League caused barely a flicker of change in interest compared to 2011, when United were beaten in the final by Barcelona.

 

"There is a benefit to winning the Champions League," said Woodward.

 

"It creates a lot of excitement and focus. When we played Barcelona two years ago 300million watched, which is more than double the Superbowl.

 

"But we don't pick up a tangible impact from the business if we get knocked out early.

 

"We didn't even get to the knockout phase last year but our business continued to perform strongly. We still had huge demand for our merchandise, sponsorship and media products.

 

"Perhaps getting to the final might bring a little increase from a special shirt or something but there is no meaningful difference between being knocked out from the semi-final against the last 16."

 

Speaking on a conference call to outline today's third quarter results, Woodward confirmed there was no update on the Nike discussions.

 

However, it is clear the club expect a massive revenue hike from the £23.5million they currently receive from the US sportswear giant.

 

It has been claimed another US company, Warrior, are interested, having not quite got out of their contract with Liverpool what they were looking for.

 

Whether it is an extension of the present contract, or a new one, United look certain to benefit.

 

"There are a number of outcomes here," said Woodward.

 

"We won't update until we get to the point where there is some news.

 

"At the moment we are focused on accelerating the pace of our commercial expansion and are putting more resources in place to pursue the myriad of opportunities that exist globally."

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