Manchester United and Sponsorship Marketing- An in-depth look

Manchester United have been flooding the headlines over the past few weeks with news of debts and takeovers.  With the debt said to be around £716.5m, a group of wealthy United fans – The Red Knights – have decided to wrestle control of the club away from the Glazer family.  They are supported by thousands of fans, all willing to invest an average of just over £600 each to buy the club.

Despite this controversy, United still maintained a healthy position of third on the football club rich list with €365.9m.  This list compiled by Deloitte takes into account money from ticket sales, sponsorship, merchandising, television monies, corporate hospitality and non-match day stadium use, such as for conferences.

But is Manchester United’s high turnover just down to increased ticket prices and big money TV deals?

In 2008, a commercial operation was launched in London with the mission of securing and identifying lucrative sponsorship agreements that can drive down the the Glazer family’s £716.5m debt and maximise the global commercial potential for United.

With this remit, the satellite London office is definitely boosting sponsorship revenues.  A sales team, which is part of a 45-strong commercial operation at an office in Pall Mall, exists to identify sponsorship categories and target global companies.

If we look at their recent achievements we can truly see how commercially innovative this move is in capitalising on United’s 139 million fan base of “core fans”. A shirt deal with US risk management company Aon brings in £80m over 4 seasons, a 3-and-a half year deal with mobile telecommunications company MTN South Africa is worth around £5m, another 3-and-a half year £7m parnership with Turkish Airlines and a 5-year sponsorship deal with communication group Telekom Malaysia all means this operation has struck sponsorship and partnership agreements worth in excess of £130m since opening for business in 2008.

More recently, the London operation has identified opportunities to exploit the club’s rocketing popularity in India and the sub-continent’s IPL-inspired sports advertising boom.

“United’s research has shown that they have 20 million supporters in India, with their fixtures broadcast to 1.15 billion homes in 2008-09. And in a direct comparison with the 2008 Formula One season’s final grand prix from Sao Paulo, which attracted 156 million viewers in India, United’s Champions League final victory against Chelsea in May 2008 was watched by 267 million people in the country.” (reference)

The club has already begun to act on this research, recently hosting a global brands event to emphasise United’s value to prospective Indian partners.  The event held in an Old Trafford suite dominated by vast images of Wayne Rooney, Michael Owen and Ji-sung Park was staged by +91 Europe, a network of Indian CEO’s.

A Manchester United cafe has also been launched in India and coaches have travelled to the country to help identify and train youngsters capable of guiding India to qualification for the 2022 World Cup. But while United have no plans to ‘dilute the brand’ by acquiring an IPL franchise, the club are determined to make their mark in India. (reference)

With clear goals and powerful and innovative sponsorship strategies, United have certainly made a strong impact across the globe.  They create high-value brand awareness for those aligned with them and the London outfit is clearly making sure they earn big revenues for United.

“Within a year of starting their shirt deal, AIG went from outside Business Week’s Top 100 global brands to number 47.” Casper Stylsvig, United’s sponsorship manager.

Sharp, who sponsored the shirt for 18 years also received competitive brand value.

According to Sharp’s communications manager, Martin Arnold, “When you say Sharp to people today, many of them either bring up Manchester United or microwave ovens that have lasted for 20 years.  Since we stepped away from Manchester United, the awareness of Sharp has fallen.”

United is definitely leading the way with its commercialisation and its high-value sponsorship deals and it will definitely be interesting to see what other gems the London-based operation will come up with over the next few years.