Manchester United are back at the top of the Deloitte money list for the first time since 2004.
They have achieved it despite not winning the Premier League since Sir Alex Ferguson retired in 2013.
In the interim, United have twice failed to qualify for the Champions League and have sacked managers David Moyes and Louis van Gaal.
Deloitte says the Red Devils’ financial status is due to “phenomenal commercial growth”. But how have they done it?
Screen test
Manchester United advertised the forthcoming film Logan on their perimeter advertising during the 1-1 draw with Liverpool at Old Trafford, in addition to during manager Jose Mourinho’s post-match interview
United midfielder Paul Pogba’s new emoji attracted much attention during last week’s Premier League game against Liverpool.
But had fans kept watching the LED advertising displays around Old Trafford, they would have seen something else.
Among the global sponsors being rotated – including Nissin, United’s official global noodle partner – was one for Logan, a feature film due to be released in February in Europe and March in the United States.
It meant the film was advertised to a global audience which, for a game as big as Sunday’s, could have been about 800 million – in the USA alone it was watched by a peak of 1.82 million. It helps explain the attraction of United to 20th Century Fox – one of the club’s 26 ‘global partners’.
Such exposure is why Mlily, a company based in Shanghai, agreed a five-year deal to be United’s official mattress and pillow partner in October 2016. Three years earlier, Japanese company Kansai become the club’s official paint partner.
Hidden extras worth £24.9m
United’s deal with Columbia Sportswear falls outside the main Adidas contract
In the summer of 2015, United began a 10-year, £750m partnership with sportswear giant Adidas to supply their playing and training kits, and also distribute other dual-branded merchandise.
Adidas replaced Nike, who had paid United £305m over 13 years.
But the deals were not the same. Crucially, United have taken back responsibility for the Old Trafford megastore and given themselves the freedom to negotiate other clothing deals for items bearing the club badge alone.
Because of that, they have been able to do deals with New Era for caps, Heroes for shoes and Columbia for outdoor wear.
In 2015, United generated £31.6m in retail income, £25.4m of which was a guaranteed sum from Nike, the remainder a profit-share deal with the American sportswear giant.
In the club’s 2016 accounts, which covered the first 11 months of the Adidas contract, the retail figure rose to £97.3m, £72.4m of which came direct from Adidas.
United do not make public the amount paid by smaller global partners, and it is possible there could be additional profit-share payments from Adidas included, but of the remaining £24.9m, a substantial percentage has been achieved through the additional commercial opportunities the new deal has presented.
The Woodward factor
Were United’s commercial department a football club, it would be ninth in the Deloitte list, having generated £272.1m in 2016, more than Juventus, Borussia Dortmund and Atletico Madrid.
Commercially, their closest challengers are Bayern Munich, who made £256.2m, while Paris St-Germain (£228.3m) and Barcelona (£221.4m) were the only other clubs to generate in excess of £200m. Manchester City (£178.7m) are the next best English team, with Premier League leaders Chelsea bringing in £122m.
Much of the credit for these figures goes to United’s executive vice-chairman Ed Woodward, who was largely responsible for pushing through the controversial Glazer family takeover in 2005.
Over the past 10 days, he has also sold midfielder Morgan Schneiderlin to Everton and winger Memphis Depay to Lyon for deals that could net United £45m in transfer fees.
Sixty-three partners
United divide their sponsors into global and regional partners. They also have media and financial partners, prepared to pay for the club crest to be associated with their products.
As of 20 January, United had 25 global partners listed on their website.
Of the 11 regional partners, they have drinks sponsors in China, Taiwan, Nigeria and Indonesia, in addition to a pharmaceutical partner for Korea and Vietnam.
United have 14 financial services partners across 21 countries as diverse as Mexico, Uganda and Serbia.
Thirteen media partners cover 15 countries, plus the whole of the Caribbean.
‘Other clubs can use United as the precedent’
United have risen to the top of the rich list because of “their ability to do commercial contracts way in excess of their peers”.
That is the verdict of Deloitte’s Tim Bridge, who told the BBC: “We are talking about shirt sponsorship, kit supplier, LED advertising around the stadium. In the case of Manchester United we are talking about partners for paint and taxi companies and other, rather obscure, commercial partners that other clubs don’t have the ability to sign contracts with.
“Ultimately, though it will result in a more competitive commercial market in future because other clubs can use United as the precedent.”
[BBC]
