Wednesday, November 2, 2011

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

1 comment:

  1. This post brings up the large question in the league of competitiveness. With teams like ManU bringing in large scale revenues like this how are lower tier teams in the primer league going to be able to compete with financial and popular powerhouses like ManU? There is a lot of discussion of reform in the European soccer league and this seems to be a prime example of clubs economic unbalance.

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