Back to the complete issue
Wednesday, 6 March 2019

Money without trophies: Defining success in football

Money without trophies: Defining success in football. Manchester United’s post-2013 experience on the football pitch cannot by any stretch of the imagination be called a success. The departure of legendary manager Sir Alex Ferguson created a void at the club, one that none of his successors has been able to fill. For the most successful team in Premier League history, the trophies dried up, title hopes faded, and laughter replaced envy among rival fans. And yet, Manchester United can still mount a strong case for being one of the top three biggest clubs in the world alongside Real Madrid and Barcelona. In 2018 they comfortably had the third-largest online fanbase and during the 2017/18 season they were the highest earning club in the world, according to Deloitte’s Football Money League. And with a stock market cap of around USD 4.12 bn, they are the second most valuable sports team in the world behind only the NFL’s Dallas Cowboys. If the club’s poor performances become further entrenched though, continued financial success may not be sustainable, the FT writes.

Record revenues: Despite the hardships faced by the club on the pitch, United’s earnings have continued to break club records with each passing season with TV rights and sponsorship agreements. It seems that in the 21st century, football teams may not require sporting success to become successful financially. Taking it straight from the horse’s mouth: “Playing performance doesn’t really have a meaningful impact on what we can do on the commercial side of the business,” the club’s executive vice-chairman Ed Woodward told analysts last year.

Is money really enough? The club may be in for a wake-up call if on-pitch results do not begin to improve. Failing to reach the Champions League for two successive seasons would activate a clause in the club’s 10-year, GBP 750 mn Adidas contract that would see club will miss out on GBP 21 mn for each year it is outside the competition. And although the United brand is well established, Deutsche Bank analysts say that it could take damage if the team is not regularly featured in the top competitions. Besides, even if financial success is truly detached from on-field performance, for football fans should beg the question: Is money really enough? “We need to win,” United CFO Cliff Baty told the FT. “And we won’t need to win just to be successful [commercially], we just need to win because ultimately that’s our raison d’être.”

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.