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.