Sir Alex Ferguson believes that you should not retire but stay active and engaged. He is living testimony to the wisdom of such a course. He is already planning to strengthen his squad over the summer and United chief executive David Gill has pledged that the money will be available.
Sir Alex Ferguson believes that you should not retire but stay active and engaged. He is living testimony to the wisdom of such a course. He is already planning to strengthen his squad over the summer and United chief executive David Gill has pledged that the money will be available.
In the past there have been concerns about what will happen to United when he does eventually leave. But financial fair play will go a long way to underwriting United’s dominant position in English football. Regulation often serves to preserve the position of those who are strong in a market.
That strength comes from many sources, but where United have been particularly successful is in the sophistication and global reach of their commercial strategy. This is an area in which success on the pitch helps a great deal, but United have thought long and hard about how they best monetise their brand and hence continue to be able to attract world class players.
Commercial sponsorship got off the ground slowly in England, Kettering Town got themselves in hot water with the football authorities in 1976 for putting Kettering Tyres on their shirts for a reported four figure sum. They didn’t get away with it when they shortened it to Kettering T claiming that it meant Kettering Town. At Coventry City Jimmy Hill tried unsuccessfully to rename the club Coventry Talbot after a long forgotten car.
Liverpool were the first club to have a commercial name on their shirt, that of Hitachi, but they got just £50,000 which was a paltry sum even in 1979.
United earn more from commercial revenue than from matchday or broadcast income. Their key insight is that there are lots of national markets all over the world with, say, different mobile telecoms providers so you can sell the same sponsorship over and over again. They have 40 country-specific telecoms contracts from Bulgaria to Burkina Faso, each worth £1m – £2m. In contrast, if you have an international airline as a sponsor, you are limited to just one.
The club’s sales offices are in central London with a staff of 80. They research prospective sponsors carefully. They have another office in Hong Kong to tap the Asian market and one is planned for New York.
What are the attractions of being United’s official paint supplier (Kansai of Japan?) Other sponsors include Chilean wine maker Casillero del Diabo and Malaysian snack supplier Mister Potato. Profile, prestige and a certain amount of swanning around for executives are among the answers. Moreover, it’s all tax deductible.
United commercial director Richard Arnold commented to Four Four Two, ‘Could you tell me what Mister Potato was before that advert?’ Top players have been involved in a video trailer for Mister Potato crisps.
Across town, Manchester City have been sharpening up their commercial act. But United, as in so many things, have first mover advantage. Smaller Premier League clubs have to rely on selling through agents.