- By Region
Amid the maelstrom of managerial sackings, player bust-ups and fans’ protests, one club has sailed serenely to the top of the football’s most lucrative and combustible league – yet again.
Manchester United has been written off many times since the Glazer family of the US bought it in a debt-laden deal in 2005.
Yet it remains the Premier League’s most profitable and successful club, now favourite to fight off the challenge of local rivals Manchester City for at least another season and retain its title.
David Gill, the chief executive who has been a constant since his appointment in 2003, is not among those calling for changes to the Premier League, formed in 1992.
“The Premier League has been the most professionally run league in football. We are leaders in a sport that is growing. There is growth to come. It is exciting. The World Cup is getting bigger. The Champions League is getting bigger. The Premier League is getting bigger,” he said.
Spiralling costs, principally players’ wages, and mismanagement among some prominent British clubs have seen Portsmouth and Rangers enter administration in recent months. But Mr Gill believes ambitious clubs will continue to spend to stay in the league and wages will not moderate.
The fair play regulation introduced by Uefa, the European football authority, which requires clubs to balance their books, will come into effect in 2013. But Mr Gill believes it will drive them to follow United’s approach and seek new commercial revenues, rather than cut costs.
The Glazers, owners of the Tampa Bay Buccaneers NFL team, were right to recognise the untapped potential, he argues.
“As a plc we thought we were one of the most commercially astute clubs and were leading the world of football, but the world has moved on in the last 5-7 years. The owners have been true to their word by investing for the long term. We have invested in people – 40 in London on the commercial side. We are acting much more like a FTSE 100 company.”
He cites a deal with Turkish Airlines that features players in safety videos for passengers and the deal with DHL to sponsor training kit, worth £40m over four years. “It has got the world a bit aghast how we have done that,” he said. “Our revenue is one-third match day, one-third from commercial revenue and one-third from TV. It is a very spread risk. Commercial revenues are very high margin and long term.”
Increasing ticket prices and aggressive merchandising have alienated some fans. MUST, the independent supporters’ association, has campaigned to remove the Glazers. The Red Knights, a group of wealthy supporters, bid £1bn for the club but were rebuffed. Debt, though falling, stood at £439m at the end of 2011.
A partial listing in Singapore has been postponed while rumours continue that the Qatari royal family could be interested in the club. The club declined to comment on recent press reports that the IPO plans were being reactivated.
Mr Gill dismisses the idea raised by Ian Ayre, managing director of rivals Liverpool, that the bigger clubs with overseas fan bases should receive a greater proportion of international TV rights.
“Football is about intense competition. It is not just us and City, but Spurs this year. There’s Chelsea, Arsenal, Liverpool. We gain from the collective selling model. Last season we won and got about £60m. The bottom club got about £40m. The ratio in the Spanish league is about 12 or 13:1. The Spanish league is not competitive any more.”
The club could make up a €100m income gap with Real Madrid and Barcelona through commercial revenues, he said.
He spoke before United’s 3-2 Old Trafford loss in the Europa League to a skilful and adventurous Athletic Bilbao side.
Research in 2007 found the club had 333m fans worldwide. It has 20m Facebook friends. It recently bought joint venture partner ITV’s stake in MUTV, its dedicated TV channel, and the international rights so it could tap the subscriber data. “We need to know who our customers are,” said Mr Gill.
Mr Ayre believes that a failure to match the Spanish and Italian giants’ spending could lock English clubs in a vicious cycle where failure to qualify for the Champions League hits income and exposure. They would then fail to attract the best talent.
However, Mr Gill said United and City’s early exit from Europe was a blip.
“It is premature to write off English teams in European football.”
The biggest question facing the club is who will succeed Sir Alex Ferguson, its most successful manager, who is 70 and been in the job for 25 years.
Dan Jones, head of the sports practice at Deloitte, which advises the club, believes it will manage the transition well.
“They appreciate the value of stability, which is rare in football,” he said.