09.12.2016

How much longer can Man United’s poor on field performance continue before it starts to impact its commercial performance?

Credit @Coral

On Monday, 28th November Manchester United set a new record; their worst ever start in the Premier League. Held at home 1-1 to an out of form West Ham team, Mourinho’s men had collected just 20 points from their opening 13 games, far from title winning form. 

The Club are used to breaking records, this summer marked the breaking of the world transfer fee record, when they signed French superstar Paul Pogba for an eye watering €105 million. The signing created another record, CIES Football Observatory research showed that Manchester United now have the most expensive squad in Europe’s Top 5 leagues. But how long can Manchester United’s financial record breaking continue without the same application on the football pitch?

Having not added to their 20 Premier League titles since 2013, following Sir Alex Ferguson’s retirement, United have been less than impressive, churning through three managers in as many years. However, their commercial performance has been title winning form, signing 25 new sponsorships in the last two years, (a staggering 14 in the 2016 fiscal year), including 11 global deals and 5 financial service deals. There seems to be a confused connection between team performance and commercial performance.  

Is the clock ticking on Manchester United’s ability to continue to expand their portfolio of sponsors and exploit new media and content opportunities without delivering on the field? With Club debt rising by 18% following Great Britain’s Brexit vote, partly due to the sterling weakening against the dollar, coupled with the possibility of a 30% hit on their £750 million kit deal with adidas, due to a failure to qualify for the Champions League for two years in a row, the signs are starting to show that their temporary dip in form needs to relinquish.  According to accountancy firm Saffrey Champness, Manchester United have “80 commercial partners”, it makes you think how many of their 80 partner deals are tracked against on pitch performance?

However, following the release of the Club’s Q4 financial results, Ed Woodward, Executive Vice Chairman was in a bullish mood, commenting, “Our record Fiscal 2016 financial performance reflects the continued underlying strength of the business and the Club is on target to achieve record revenues in 2017, even without a contribution from the Champions League.” 

With record breaking profits and revenue predicted for 2017, who needs Premier League titles and Champions League football? The Dallas Cowboys would have to agree. Despite not having won the Super Bowl since 1996, the Cowboys are the most valuable sports team in the world, overtaking Real Madrid, now valued at $4.2 billion.

According to the great Sir Matt Busby, Manchester United “strive for perfection and if we fail, then we might just settle for excellence”. Hopefully for the Club, they can find either perfection or excellence on the pitch before commercial partners find new properties to collaborate with. However, with Manchester United set to be crowned champions of the Deloitte Money League in 2017, perhaps it’s only the fans that care what the score is at the weekend. 

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