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Manchester United’s On-Pitch Slump Can’t Stop Sponsorship Jump

Manchester United is experiencing a testing period at present, with results slipping on the pitch and recent financial figures showing a worrying drop in profits. Somehow – and surprisingly – this has not deterred brands from buying into United’s global appeal with income from sponsorship is up 49% in the latest fiscal year.

The club’s playing issues are numerous, including a disappointing seventh place finish last season, the sacking of David Moyes and the frustration of missing out on Champions League football for the first time in two decades. These have been compounded by the introduction of a new manager and £150m worth of premium international talent that has had little effect on the team’s results. It was hoped the new recruits would return the Red Devils back to the pinnacle of English football, yet Premiership newbie, Leicester, were the most recent team to take all three points from Louis Van Gaal and his ‘Gaalacticos’.

Elsewhere off-pitch the story does not make for happy reading, with the club’s revenue expected to fall from £430m to £385m by June 2015 in the absence of Champions League football. Additionally net profit is down a staggering 83% to £24m, although, to a degree, this can be attributed to comparisons with the previous financial year where United received a substantial tax credit.

It is therefore testament to the power of the Manchester United brand that, despite the negativity surrounding the club, it continues to attract a multitude of sponsors, generating significant commercial income through sport sponsorship activation. In total, 20 new partnerships were signed in the 12 months to June, including the astoundingly lucrative £50m-a-season shirt deal with Chevrolet and record breaking £75m-a-year kit deal with Adidas which kicks off in 2015, an impressive sport public relations coup.

Partnerships with Saudi telecom, STC, PepsiCo in the Middle East and deals with Aon and Nike in the US, have been joined by United’s recently-announced, five-year extension with financial institution, Maybank. Operating within Malaysia, Singapore and the Philippines, Maybank increases the Old Trafford club’s presence in markets where it commands a fanatic level of popularity, estimated as 22 million fans.

Overall, United’s sponsorship income has jumped £45m to £136m this year. As a percentage of total revenue, sponsorship also grew from 21% to 31%. Years of success for the red half of Manchester have created a brand powerful enough to maintain its reputation even when results on the pitch start to slide. From a sports public relations perspective these new sponsorship figures show that United remains one of the most famous, trusted and attractive brands across global sport. Other teams may continue to take points from Louis Van Gaal’s men but they will have to do a lot more to dent Manchester United’s appeal.

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2 Comments

2 Comments

  1. Thane

    26 September, 2014 at 20:32

    The Manchester United “brand” is gathering pace despite the above mentioned slips. The problem that the Red Devils have is that if results do not improve on the pitch they will be hard pressed to spend another £150 million under financial fair play to have another “new beginning” next season. Although premature granted, if United fail again this season to qualify for the Champion’s League, there will be consequences….. It may take more than two bad seasons but the appeal of the club to sponsors will decline. More likely, sponsors are backing Man Utd now in the hope that the club’s fortunes will reverse and results on the pitch will come good again. Much like backing a sound company on the stock exchange at a low price in the hope that it rises over time. Time will tell for LVG and MUFC……..

  2. JohnHayes

    27 September, 2014 at 08:56

    What amazes me is that Manchester United and their fans seem to think they have a God-Given right to qualify for the Champions League every season.

    Let’s put things into perspective, United’s current predicament is the result of one poor season under David Moyes stewardship and a less than glorious start under the direction of Louis Van Gaal. It does not represent a terminal decline. In all likelihood it is a temporary hiccup.

    There is time for the season to be turned around, and it is just a question of the undoubted talent that LVG has brought to the club bedding in before a consistent run of results ensues and United’s league position more accurately reflects the squad’s ability.

    There is no doubt that LVG got his priorities wrong in the transfer window. The prospect of facing Tyler Blackett, Chris Smalling and Phil Jones week in, week out must have Premier League strikers rubbing their hands in glee. A centre half in the January transfer window is a must. Problem is, where do you find the next Nemanja Vidic or Jaap Stam? My team, Liverpool, has exactly the same problem. The only difference is we invested in our defence, but made the team worse in the process.

    United and their fans seem to glory in their commercial pulling power. Well, this is a results game, and what should really matter to the board is securing three points on the pitch. So far results have been underwhelming, perhaps a case of LVG underestimating the quality of the opposition in the Premier League and also believing his own media profile as a miracle worker or coach extraordinaire. Jesus might have been able to turn water into wine, but Van Gaal is never going to turn Rafael, Ashley Young and Tyler Blackett into Premier League footballers.

    On a personal note, I would love to see LVG’s grand plans for United fail, and for this to impact on United’s commercial success in the marketplace, but in all honesty believe reports of their long-term downfall are premature.

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