Red Devils Invade China

The Reds Invade China

            Manchester United has been increasing efforts to connect with their some 70 million supporters in China.  The last weekend of October, ManU’s “Champions Experience” opened in Beijing after previously being in Shanghai; on Friday alone the experience had over 2,000 visitors.  The experience, which was located in front of the “Bird’s Nest” Stadium from the 2008 Olympics, took fans through the history of each of the Club’s 19 League Titles and showcased other memorabilia.  Some of the pieces include the first ever league medal won by Man United, shirts worn by Denis Law, Teddy Sheringham, and Ruud van Nistelrooy, as well as cleats worn by Wayne Rooney and David Beckham. However, one of the coolest things in the experience is the final piece, an Epson 3D projection showcase of United’s star players.  Also in Beijing was the Barclay’s Premier League Trophy tour, which gave the fans more interactive displays and ways to connect with the teams.  As if all of this wasn’t enough for the fans, there were giveaways all weekend and chances to win a signed United shirt. 

Even more recently, the Reds have launched a Mandarin version of their official online store, “United Direct”, in order to meet the demands of the growing Chinese fan base.  Lifting this language barrier will make it easier for the fans to buy the United kits, personalized shirts or ones with their favorite player’s name on the back.  The store also brings an online channel for the fans to order Nike football cleats that can be embroidered with the Red Devil emblem.  In addition the store offers Nike training and fashion equipment, football equipment, gifts, souvenirs, and more.  The store also added additional payment methods including Alipay, ChinaPay, PayEase, and TenPay to make it easier for the Chinese fans to buy directly from the online store.

What do you think the Next step for Manchester United in China is?

Sources:http://www.manutd.com/en/News-And-Features/Club-News/2011/Oct/Champions-come-to-Beijing.aspx

http://www.manutd.com/en/News-And-Features/Club-News/2011/Nov/manchester-united-online-store-launched-in-mandarin-chinese.aspx

Commercializing Man United

The enormous value of Manchester United’s brand has recently begun to pay dividends. Due to aggressive commercialization tactics, England’s most famous club has signed sponsorship deals which have dramatically improved their revenue stream over the past few years.

One of their most impressive current partnerships was their recent completion of a £40m training kit sponsorship deal with DHL. DHL, an American logistics company, has agreed to pay the £40m over the next four years for the logo rights to Manchester United’s domestic training kit.
The club's chief executive David Gill said the DHL deal "breaks new ground in the English game".

The total deal exceeds the club's main shirt deal with former sponsors Vodafone, which ended in 2005, and is around half the £20m a year that Aon pays to be emblazoned across their shirt. This new sponsorship is especially remarkable in the fact that the deal exceeds the value of all but five main shirt sponsors in the Premier League. From a financial perspective, that gives Manchester United an advantage over the competition not only in terms of revenue but also their subsequent ability to acquire world class players.

The success of this deal can largely be attributed to the increased global media coverage of English football. DHL hopes that by investing in such a visible and internationally popular brand their logo will be featured around the world. This sponsorship is just one of many that Manchester United has been able to leverage their brand with and is the driving force behind their recent financial success. “Manchester United's full year accounts, to be released in October, are expected to show that commercial revenues have topped £100m for the first time. Quarterly results in May showed growth of around 30% on the previous year, while matchday and media income remained flat.”

While this aggressive commercialization leaves many fans wary that Manchester United is selling its soul it seems that the club has discovered a previously untapped way to stay financially solvent, something that is becoming increasingly rare in today’s football world.

http://www.guardian.co.uk/football/2011/aug/22/manchester-united-kit-deal-dhl

The Glazer Era: Fans vs. Finance

Manchester United supporters are not entirely happy with the current condition of their club, more specifically the ownership of American businessman Malcolm Glazer.  In 2005 Glazer seized control as owner of Manchester United F.C. in a leveraged buyout totaling almost £800 million. Effectively, the takeover was financed primarily by loans which were secured against the club's assets. And while a leveraged buyout of this kind is common practice in the corporate business world, the huge amount of debt that has been subsequently incurred by Manchester United has left many Red Devils supporters seething.

But what is there to complain about? Manchester United has continued to experience on field success since Glazer took over and remains one of the elite teams worldwide. The business side of the club has prospered as well. Increased revenue from TV rights and sponsors such as Nike, AIG, AON, and DHL has fueled profits and the value of Man U has only continued to rise in recent years. From an outside perspective it would seem that Manchester United as a football club is thriving.

Taking a closer look and evaluating the recent dissatisfaction Manchester United fans have expressed it become apparent that the problem lies not so much in the success of the team as much as in other more intangible qualities of the club. Many supporters feel that the destiny of their team has fallen out of their control in the hands of Malcolm Glazer. A chant of "stand up if you hate Glazer" resulted in three-fourths of the 76,000 supporters rising, according to reports at a recent match. They cry that Manchester United is more than just a business venture and should be operated as such. Ticket prices have risen in past years to the point where many lifelong supporters can no longer afford to attend games and the significant amount of debt that the club has taken on has many fans extremely alarmed.

Red Devils fan are just not in alignment with the Malcolm Glazer on the way a British football club should be run. Glazer, who also owns the Tampa Bay Bucaneers, is of the mindset that Manchester United should be run as a viable business venture in which profits are not compromised in lieu of club success. This goes against all traditional British ownership perspectives which lean more toward the attitude of the football club being a community institution instead of an asset.

"The way sports is looked at in America is slightly different than it is in the UK," says Sean Bones, vice chair of the anti-Glazer movement called the Manchester United Supporters Trust (MUST). "In the UK, it's part of your identity. … Some view Old Trafford as their church."

Manchester United fans have made numerous attempts to organize themselves to overthrow Glazer ownership and reclaim their club. Recently the above mentioned Manchester United Supporters Trust met with a group of wealthy fans with an interest in buying out the Glazers' controlling interest in the club. Fans have also enthusiastically participated in the “Green and Gold Movement” where at matches Glazer haters will wear the green and gold colors of Manchester United's precursor club, Newton Heath, in support of the traditional roots and values of the club.

At this point it seems that the differences between Malcolm Glazer and Manchester United fans have become irreconcilable and that the struggle over control of the club will continue to wage on.


http://www.soccernews.com/why-do-united-fans-hate-the-glazers/31207/

Next Up: Pakistan

Six and the City. A play on words relating Manchester United’s 6-1 home loss to bitter rivals Manchester City and the female glamour television program Sex and the City. Up to this point of the season, Manchester United was on a real roll, unbeaten in all league matches. But now it seems as though their on-field success might take a severe turn for the worst after the weekend’s humiliation. However all is not as blue as the Manchester City kit, because Manchester United released news of an over-seas victory 3 days after the loss. Not an on-field victory, but one off the playing field and into the business world. 

According to an article on Oct. 25^th in The News of India, Manchester United announced a 3 year deal with a telecom deal with Pakistani company Zong. The deal with Zong will give United fans in Pakistan the access to watch goals, exclusive interviews, and news from Old Trafford. Manager Sir Alex Ferguson was quoted claiming the telecom company “will be a key player in allowing us to bring the passion and excitement of Manchester United to the people of Pakistan.

The expansion of the fan viewing experience is a recent trend for Manchester United and many other of the top European clubs. It seems as though Manchester United though is leading the way, strengthening the image of their brand wherever there is demand.  Manchester United’s commercial director, Richard Arnold described the strategy as “Using our digital assets to engage our global fan base is an increasingly important part of our commercial strategy and we are very excited about the possibilities presented by this partnership.” Manchester United is just as much a business as it is a soccer team, as on-field success is just as important as off-the-field success. That’s what makes United stand out among the rest in terms of global branding and reputation. They have realized the importance in offering their service to a much wider audience as demand for the sport continues to grow, especially in developing areas.

So why Pakistan? In a cricket-mad country of 180 million, football is gradually gaining popularity with youngsters in urban areas even staying up late to watch their favorite players in action in the Premier League. Football's popularity is growing in part because a cable subscription for around 200 rupees ($2.50) a month gives viewers access to most major football league matches played around the world. Manchester United has seized the opportunity to tap into a growing demand center, and you can’t blame them. It is this strategy that has seen their brand grow and they will not stop implementing this strategy across the world any time soon. Up next Nepal…….not really, but you never know who’s on the agenda of the Red Devils.

Sources: http://articles.timesofindia.indiatimes.com/2011-10-25/epl-news/30319598_1_united-fans-premier-league-pakistan

Manchester United partners with UAE’s biggest Mobile Telecommunications Company

Manchester United just signed a two-year partnership with Du, the United Arab Emirates leading mobile telecommunications company. 

Manchester United, along with clubs like FC Barcelona, have put a lot of time, money, and resources into cracking the Middle Eastern Futbol market.  With this partnership, the 56 million Manchester United fans in the UAE will be able to see all the goals scored, exclusive interviews, news, and behind-the-scene access that will bring them closer to the club and the Old Trafford than ever before, if they sign up for Du’s service. 

Sir Alex Ferguson commented that “In recent years, the club has grown very close links with the Middle East and we know from our visits there that the fans are as loyal and as passionate about the team as anyone. To be able to address them directly is incredible and the network of deals that we are building up means that more and more fans can feel involved with what happens at United.”

It seems that Du is just as excited as Man United about the partnership commenting that “Manchester United is an icon and our sponsorship of the club will open up a world of exclusive privileges to our customers, allowing them to experience more than has ever been possible." 

This partnership has a much larger impact than just this partnership, it is yet another example of the Middle Eastern companies sponsoring and interacting with the biggest clubs in European futbol. 

J.B.

http://www.manutd.com/en/News-And-Features/Club-News/2011/Oct/manchester-united-sign-mobile-deal-in-united-arab-emirates.aspx

With Success Comes Hate

Manchester United, a team beloved by so many fans across the globe. The Red Devils are icons of the game, always fielding teams mixed with experience, youth, and star power. Their success during the Sir Alex Ferguson tenure is unmatched, and with their last Premier League title in 2011, they overtook Liverpool FC as the most successful club in Premier League history. Manchester United has now become one of the largest global brands, as the team’s image has been cemented into the global economy due to its continued domestic and foreign success. In July, Manchester United topped Forbes list of most valuable sports brands in the world, but were marginally overtaken recently by the New York Yankees mostly thanks to the strengthening of the US dollar.

Last season, even before the players of Manchester United secured their 19^th premier league victory, they also found their way to the top of another table-a much more concerning table. Manchester United was voted the most hated company in the UK in March 2011. In a survey of 1000 UK adults, 26% said that they hated Manchester United even more than the despised budget airline RyanAir, who came in second at 23%. The other companies found on the list are the usual suspects, big banking and oil companies, but it is quite intriguing as to how a sports team, such a well-loved one as well, heads the rest.

Are Manchester United hated for their business practices? Are they hated because customers are unsatisfied or disappointed with their experience and relationship with the team? No, that does not seem to be the case, as we must analyze the situation with the perspective that Manchester United is first and foremost a sports team, and then a company. Why they are hated so fiercely is a direct result of their domestic success and domination. Manchester United may have the biggest crowds week in and week out and the highest success rate in recent years, but that has alienated many other teams and their supporters across England. When dissected a step further, the survey revealed that in both London and North-west England, they are hated by 31%, which makes sense as the team’s strongest rivals can be found in the two regions.

This hate seems to stem from rival’s envy of the success Manchester United has found in the recent era, which makes it quite unfair for the team to carry the label of the most hated company in the UK. Yes, the team does have its issues concerning the motives and operations of management (Glazer), but it is clear that they are not hated because of their business behavior. While reasons for hating big business such as banks for their bonus culture and oil companies for their high prices are fair, Manchester United are being punished simply because they are the best at what they do. As an Arsenal fan, can’t say that I’m complaining!

Sources:

http://www.dailymail.co.uk/sport/football/article-1371080/Manchester-United-hated-UK-company.html

Manchester United Sells Shares on the Singapore Stock Exchange

It was no surprise that Manchester United had their proposal to sell of $1 Billion (£650m) ,but ManU must now decide whether they can actually raise the money that they need to reduce their debt (ManU’s net debt is over £300m).

The Glazer family is aiming to raise £650m from selling off somewhere between 25% and 30%. That brings the value of Man United to more than £2bn but is there even that much risk involved? There is no doubt there will be a line of wealthy, powerful people eagerly ready to buy a large chunk of the world's most valuable sports brand.  If the Singapore stock market happens to crash, then the Glazer family can buy back their share in the club at a discounted rate, and if the sale is successful, they will raise between £300-350 excess after paying off the debt.   
What is the next step?
Man United executives will start giving presentations to a few key, large investors who they hope will buy a good portion of the shares available.  They will present their vision for the future of the business side of the club.  Man U has until the year to get their initial public offering float their stock on Singapore exchange, which fits their end of November target date. 

J.B. 

http://www.bbc.co.uk/blogs/davidbond/2011/09/manchester_uniteds_singapore_s.html