SportsMarketing
Manchester United is
looking to build on its ranking as the world’s most valuable football club with
even more focus on generating revenues through sponsorship and retail sales.
Speaking at KPMG’s
Football Benchmark Forum conference yesterday (31 May), Manchester United’s CFO
Cliff Baty said the club has ambitions to expand its current 28 global club
sponsors.
United’s £2.6bn valuation,
which KPMG bases on broadcasting rights, profitability, popularity, sporting
potential and stadium ownership, puts it ahead of big European clubs such as
Real Madrid, Barcelona and Bayern Munich. KPMG says its success has been driven
by the club’s strong sponsorship business, based in London.
United achieved a record
profit of £191.9m last year, despite the lack of Champions League football, and
is predicting record revenues of up to £570m this year. And Baty said missing
out on UEFA Champions League football hasn’t been the financial burden
outsiders expected it to be.
“Our pre-tax profits could
hit up to £195m this year so clearly being out of the Champions League has made
more of an emotional difference than a financial one,” he said.
“Moving forward, we see a
lot of opportunities to expand on the retail and sponsorship side. Before we
moved to Adidas as our main sponsor, Nike controlled our retail and online
distribution. So this means we can now open Man United superstores across the
world and generate more revenues.”
He added: “There’s also
lots of categories we’ve not even entered into yet and an opportunity to
attract new sponsors and partners. Partnerships are a great way to make money
as our brand has so much history to be leveraged.”
Being out of the Champions
League has made more of an emotional difference than a financial one.
However, Baty insisted
United’s sponsorship business still maintains quality control: “We don’t sell
our brand on the cheap and we turn down more deals than we accept. It has to be
the right fit. We know it is not acceptable to do all these big commercial
deals and then end up not spending to chase success on the pitch. Success in
business and success in football have to be linked.”
According to Baty, the
devaluation of sterling is making it tougher for English clubs to entice
superstar signings. He described last summer – when United signed Paul Pogba for
a world record £89.3m – as particularly difficult.
He concluded: “It was a
bit difficult last year when you’re trying to make signings in the summer and
you have players questioning the value of being paid in sterling.
“A lot of European players
want to be paid or want to have their value to be underpinned in euros. That’s
understandable to a degree, but we are not a euro company. We obviously earn
most of our income in sterling. It makes the finances a bit more complicated.”
Credit: www.marketingweek.co.uk
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