Going Global
The key to Man U’s revenue generation is their global presence. As wealth rises around the world, internet access and television broadcasting will increase. The clubs with recognizable brands are those that stand to earn the most.
Manchester United exemplifies the benefits of globalization. In 1987, matchday revenue accounted for 65% of Manchester United’s total revenue. By 2014, it was only 25% of total revenue (see Figure 3). Note that matchday revenue increased from £4.2 million to £108.8 million since 1987. Matchday revenue’s shrinking share of the total was due to revenue growth in other areas like commercial revenue.
The commercial revenue segment also bears the happy mark of globalization. This segment includes sponsorships, merchandising, and team tours. Where Vodafone once paid an average of £8 million per year to appear on every United shirt, in 2014 Chevrolet agreed to pay the club an average of £44 million per year to appear on the club’s shirts, despite Man U’s disappointing 7th place finish (see Figure 4). And German boot (cleat) maker Adidas recently dropped £750 million over ten years (£75 million/year) to be the official technical sponsor of Manchester United—a sum only £40 million less than the club itself cost its new owners in 2005.
The globalization of sport has wrought changes on the top football clubs across Europe beyond lucrative endorsements and sponsorships. In 1980, Manchester United’s roster was disproportionately from the United Kingdom–25 of 26 players. In 2014, things looked a bit different. Roughly 1/2 of the team’s roster was from outside of the UK. Across the Premier League, the data show the same. The best players in the world now come to play for the best teams in the world.
The 90th Minute
Internationalization is a good thing. Markets for footballers have become more competitive, and the chances that otherwise undiscovered, far flung football talent finds its way to the pitch at Old Trafford are as good as ever.