Manchester United is looking to build on its ranking as the world’s most valuable football club with even more focus on generating revenues through sponsorship and retail sales.
Speaking at KPMG’s Football Benchmark Forum conference yesterday (31 May), Manchester United’s CFO Cliff Baty said the club has ambitions to expand its current 28 global club sponsors.
United’s £2.6bn valuation, which KPMG bases on broadcasting rights, profitability, popularity, sporting potential and stadium ownership, puts it ahead of big European clubs such as Real Madrid, Barcelona and Bayern Munich. KPMG says its success has been driven by the club’s strong sponsorship business, based in London.
United achieved a record profit of £191.9m last year, despite the lack of Champions League football, and is predicting record revenues of up to £570m this year. And Baty said missing out on UEFA Champions League football hasn’t been the financial burden outsiders expected it to be.
“Our pre-tax profits could hit up to £195m this year so clearly being out of the Champions League has made more of an emotional difference than a financial one,” he said.
“Moving forward, we see a lot of opportunities to expand on the retail and sponsorship side. Before we moved to Adidas as our main sponsor, Nike controlled our retail and online distribution. So this means we can now open Man United superstores across the world and generate more revenues.”
He added: “There’s also lots of categories we’ve not even entered into yet and an opportunity to attract new sponsors and partners. Partnerships are a great way to make money as our brand has so much history to be leveraged.”
Being out of the Champions League has made more of an emotional difference than a financial one.
Cliff Baty, Manchester United
However, Baty insisted United’s sponsorship business still maintains quality control: “We don’t sell our brand on the cheap and we turn down more deals than we accept. It has to be the right fit. We know it is not acceptable to do all these big commercial deals and then end up not spending to chase success on the pitch. Success in business and success in football have to be linked.”
According to Baty, the devaluation of sterling is making it tougher for English clubs to entice superstar signings. He described last summer – when United signed Paul Pogba for a world record £89.3m – as particularly difficult.
He concluded: “It was a bit difficult last year when you’re trying to make signings in the summer and you have players questioning the value of being paid in sterling.
“A lot of European players want to be paid or want to have their value to be underpinned in euros. That’s understandable to a degree, but we are not a euro company. We obviously earn most of our income in sterling. It makes the finances a bit more complicated.”