Manchester United FC's struggles put strain on business model, sales of merchandise dip

Mar 21 2014, 15:05 IST
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Manchester United's Robin van Persie celebrates with Wayne Rooney during their Champions League match against Olympiakos at Old Trafford. (Reuters) Manchester United's Robin van Persie celebrates with Wayne Rooney during their Champions League match against Olympiakos at Old Trafford. (Reuters)
SummaryA series of losses has put pressure on business model of Manchester United, one of the richest clubs in Europe.

Manchester United F.C. won some much needed breathing space with its comeback in the Champions League on Wednesday after a series of losses on the pitch put pressure on the business model of one of the richest clubs in Europe.

While loyalties in soccer don't evaporate overnight, an early sign that casual fans might be wavering is when selling merchandise becomes harder. A dwindling fan base in turn jeopardises the lucrative sponsorships that drive revenue.

United said last month that sales of merchandise to fans slipped by 400,000 pounds to 9.1 million pounds in the last three months of 2013 as the team struggled for consistency under new manager David Moyes.

"Manchester United F.C.'s performance has definitely affected sales," said Hairul Amar, business development manager of Premier Football International, which sells soccer kits in Singapore.

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"As the season progressed, we saw a dip. If we look at the sales of jerseys of Arsenal and Liverpool for example, in terms of the rate of sales, I can say they have overtaken Man U's demand currently," he added.

Manchester United F.C. is in seventh place in the 20-team Premier League and the Champions League is its last hope of winning a trophy this season.

United uses its base of 659 million followers to secure partnerships with companies covering everything from airlines to paint. It has a stellar cast of sponsors which helped drive commercial revenue to 152 million pounds ($252.7 million) in 2012-13, more than the club earned from either broadcasting or matchday income.

"We attract leading companies such as Chevrolet, Nike and Aon that want access and exposure to our community of followers and association with our brand," United, owned by the American Glazer family and listed in New York, say on their website.

DEFIANT MOOD

In January, United dropped to fourth in Deloitte's annual survey of team revenues, figures based on 2012-13 when the club won the Premier League. Real Madrid, Barcelona and Bayern made up the top three.

A new television deal this season is likely to restore United to the top three, with the club forecasting revenue of 420-430 million pounds from 363 million last season.

The club, which boasts more fans than European rivals Real Madrid or Barcelona, says sales remain strong at its Old Trafford stadium store and senses

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