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How Manchester United Hit £500 Million Turnover

The Premier League club is one of the most marketable entities in the world

13Sep

The English Premier League is widely accepted to be the world’s most enthralling soccer competition. Always played out at a ferocious pace, the league is best known for its blend of dazzling skill, astute tactics, and no-nonsense tradition. In no other league in the world can you see a defender as traditionally stalwart as John Terry heavily tackle a player as cultured as Mesut Ozil with all the aggression and authority of yesteryear. Ferocity meets excellence in a league considered the ultimate test of both player and manager, and the world watches on eagerly.

This keen interest is reflected in its quite incredible commercial success. Leicester City’s shock league victory in the 2015-16 campaign came at a perfect time for the tournament’s dealmakers, with sponsors looking to buy into the unpredictable soap opera for incredible sums. Barclays, who has sponsored the league for the past 16 years, has loosened its grip on the rights, leaving an open space for three other brands - Tag Heuer, EA, and Nike - to join it in sharing sponsorship privileges.

When this increase in sponsorship revenue is coupled with the groundbreaking £5.136 billion deal paid by Sky and BT - at a 71% increase on the previous deal - for just three years of broadcasting rights, the money flowing into the Premier League is huge. The Premier League has long been the most commercially appealing league in European football thanks to its rich history and the sheer number of great clubs. And, within that league, there is no more commercially viable brand than Manchester United.

Despite the criticism leveled at the club’s owners, the Glazer family, they have been successful in turning the club into a financial powerhouse by exploiting the emerging US and Asian markets. Alex Ferguson’s successes as manager cemented the club’s place on the world stage as a marker of footballing excellence, and marketable stars like Cristiano Ronaldo and Wayne Rooney have proven effective. Having said that, United’s commercial weight comes from more than just the last 20 years. The more intangible, unquantifiable value is in the 114-year heritage of the club and its entrenched place in both Mancunian and footballing culture. Old Trafford stands as an icon, and the largely unchanged club crest is one of the most immediately recognizable in world sport.

Anyone shocked that Manchester United deemed an £89 million outlay for midfielder Paul Pogba worthwhile should have a glance at the club’s earnings report. The news broke this week that the Manchester side is the first British football club to break £500 million in yearly earnings, clocking in at £515.3 million for the 2016 financial year, according to the BBC. The Red Devils were only edged globally by La Liga giants Barcelona (£570 million), who benefitted from a strong Euro against the pound following the UK’s Brexit decision. Such is United’s commercial revenue that it alone - some £268.3 million - would place the club 11th in the latest Deloitte Rich List, ahead of Tottenham, AC and Inter Milan, and Roma.

In fact, such has been the swell in United’s earnings that Paul Pogba’s transfer actually constitutes a lower percentage of the club’s annual turnover than the signings of Rio Ferdinand and Juan Veron (£29.1 million and £28.1 million respectively) did back in the early 2000s. Manchester United certainly isn’t the only British club to have seen revenues skyrocket - the effect of the new lucrative TV rights deal for Premier League clubs is yet to be properly felt, but could see even the league’s least affluent clubs splashing out incredible fees for players.

Now, with Jose Mourinho at the helm and £148 million spent in the summer 2016 transfer window alone, United are well and truly box office once more. One also has to bear in mind the fact that this incredible turnover is without involvement in the Champions League, thanks to the club’s fifth place finish last term. If English football’s biggest club can find trophy winning form under their new manager, there is nothing to suggest this swelling of profits will slow down anytime soon. 

Sources

Image courtesy of NURULAINI/Shutterstock.com

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