Manchester United – Football and Finance

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Football is a game that is played all across the globe; millions of fans watch the game each day and enjoy the experience of watching it. Soccer is more than a game; the game has got everything in it which a person can possibly expect. Ecstasy, emotion, outburst you name it the game has got it. There are so many legends of the game, Ronaldinho, Maradona, Pele, Romario, Ronaldo just to name a few. These players have become household names and this just goes to show the popularity of the game and its global reach. There is no denying that the game has a global reach. It reaches every part of the world that one can possibly imagine. Be it Africa, America, or for that matter any other continent.

“In its broadest sense, corporate social responsibility represents a concern with the needs and goals of society, which goes beyond the merely economic. Insofar as the business system as it exists today can only survive in an effectively functioning free society, the corporate social responsibility movement represents a broad concern with the business’s role in supporting and improving that social order” (Eells, 1974).”

The world cup is the most eagerly awaited tournament of all; it brings a lot of joy to all the spectators. In addition to the world cup, there are so many other tournaments that are conducted all through the year, for instance, the EPL, the Spanish League, the Italian Serie A, and other club-level tournaments. The UEFA Champions League is probably the most difficult to win at the club level. UEFA is the governing body of European Football; it stands for Union of European Football Association. This paper will throw light on the financial position of Manchester United which is based out of England and is arguably the most popular football club in the world.

Financial Position of Manchester United

The red Devil better known as Manchester United is the richest football club among all the football clubs in the world. “Although Real Madrid laid claim to the honor for a couple of years, United officials believe their gross revenue of £245million in the year to June 2007 exceeds that of the Spanish giants by just 12 Euros if average conversion rates during the 12-month period in question are used.” (Manchester United, 2009).

The cub went into private hands and the ticket prices were increased to earn more profit. Malcolm Glazer bought Manchester United and increased the ticket price, Old Trafford is the home ground of Manchester United and it is one of the largest football stadiums in the world. The stadium can accommodate more than 90000 people. There was a very strong protest from the supporters when Glazer took over United by buying the majority of shares in the Market.

Supporters thought that the interest of the supporters will be ignored by Glazer and the only motive he will have is to make as much money as possible but this has been proven wrong by Glazer. The club has tasted success time and again and the Glazer family does not interfere in the functioning of the club, Sir Alex Ferguson has full authority to buy or sell any player he likes to. He has been the longest-serving manager and Glazer realizes this fact and appreciates it.

There are roughly about 333 Million United fans all across the globe and the majority of them are based in Asian countries like Japan, Korea, etc. The merchandise that the club sells is a good way to make a profit and the highest sales are recorded in Asian countries. Manchester United has some of the best players any team can think of having, Ronaldo is the ace of Manchester United; he recently won the FIFA World Player of the year award. His Jersey sells like hotcakes and Manchester United profits from the same. “It is little wonder the Old Trafford outfit have been able to post stunning profits of £59.6million for the 12 months to June 2007, a massive 93% rise on the previous year.” (Manchester United, 12 March 2009).

The English Premier League is the most widely watched by supporters all across the globe. Manchester United competes in the English Premier League and they have been winning the league for the past 2 seasons and are well on track to make a hat trick of Leagues. The TV rights fetch the club huge money, it is the most widely watched league and there is no denying that, considering the same the world’s richest club is expected to get richer with each passing day.

“Only eight Premier League clubs recorded an operating profit in 2006-07; total debt for all 20 clubs was up 19 percent to more than £2.4billion, although £1.25billion of that figure is accounted for by Manchester United and Chelsea, and interest charges for Premier League credit were £144m in the year.” (Boom and Bust Years, 12 March 2009).

The recent recession has knocked the stuffing out of the major football clubs in almost all the leagues. Manchester United are no exceptions, major clubs like Chelsea, Arsenal, Liverpool are all believed to be in debt and the recent recession has put these clubs in further trouble. Some of the sponsors of big clubs like Newcastle have become bankrupt. Northern rock a very popular bank was the sponsor of Newcastle but the bank has been adversely affected by the recession.

Even AIG the sponsor of Manchester United is trying hard to consolidate its position in the market of insurance. All these factors suggest that the future does not look bright for Manchester United financially but another viewpoint suggests that the recession will be over shortly and the club will only grow with each passing day. What happens in the future can’t be exactly predicted by anyone, we can only speculate over the same. “Manchester United looked unbeatable on the pitch this past season and it seems like they could go on winning forever, but lots of clubs have been in this position. Most recently we can look to the fall of AC Milan, Barcelona, and Real Madrid. All three clubs enjoyed major success over a two-to-five year period before falling from grace quite abruptly.” (Boom and Bust Years, 12 March 2009).

The performance of United has been really consistent over the past few years and the same has helped the club in earning more money. “Real Madrid increased revenue by €15m to take their total to €366m. Manchester United’s performances on the pitch in 2007-08 resulted in a £45m (21%) increase to £257m. Third-placed Barcelona grew its revenue by €19m (6%) to €309m.” (Manchester United’s Expense, 12 March 2009).

Football is already a global sport and the popularity of the sport is expected to pick up within the next 5 years and from that perspective, Manchester United will only get richer. The global reach of the sport will ensure lucrative TV rights for the club, giving them an opportunity to make good money and in addition to this, the merchandise will become more popular among the fans. The club will also make huge profits from selling the club merchandise. Manchester United is well on course for winning their third successive English Premier League title this season; this will also ensure more profit to the club. Barclays is the sponsor of the English Premier League and the winner gets a huge compensation. Barclays is a bank based out of Britain. Hence to conclude it is very fair to say that the future looks very promising for the club both financially and from the perspective of silverware.

References

Boom and Bust Years. In SPORTINGO. Web.

Eells, R., & Walton, C. 1974. Conceptual foundations of business (3rd ed.). Burr Ridge, IL: Irwin.

Manchester United’s expense. In Guardian. Web.

Manchester United. In Manchester Evening News. Web.

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Manchester United – Football and Finance

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