Manchester United’s precarious financial situation could be set to worsen with “at least two” of the club’s global partners expressing “serious doubts” about renewing their sponsorship contracts, according to a report.
The decade of malaise which has engulfed Old Trafford in the post-Sir Alex Ferguson era, driven by the Glazer family’s incompetent ownership, has left United in a state of disrepair on and off the pitch.
The Importance of Commercialism
The club’s almost incomprehensible profligacy, with nearly £1.5 billion invested on transfers and around £60 million spent hiring and firing a range of managers, means the Red Devils are in an unfamiliar position of being unable to spend significant amounts in the summer window.
It puts significant pressure on the club’s continued global appeal to generate as much income as possible from sponsorship deals. The recent £60 million-a-year contract with Snapdragon was a world-record within football, underscoring United’s ability to remain relevant off the pitch despite woeful performances on it.
However, the executive described as “integral” to closing this – alliance and partnerships chief executive, Victoria Timpson – departed Old Trafford last year. Similarly, Ali Edge, director of alliance and partnerships, also left the club in the same period.
Both figures were well-respected within the industry and puts further strain on United’s ability to continue its commercial growth at a time when the sporting operation at the Theatre of Dreams desperately needs it to avoid any more nightmares on the pitch.
The Risk of Losing Sponsors
The Telegraph reveals some of the club’s existing sponsors are expressing “serious doubts” over continuing their relationship with United, putting added pressure onto future balance sheets.
“Telegraph Sport understands that at least two of United’s global partners are having serious doubts about renewing their sponsorship agreements given the changing landscape, the potential effect on strategy and innovation, and a feeling of not being as valued as before.”
Ineos, who gained full control over the football operation at Old Trafford a year ago, have hired Marc Armstrong to be the club’s chief business officer from Monday, having previously worked at Paris Saint-Germain.
This appointment will soften the blow of losing Timpson and Edge with The Telegraph contending Armstrong has a “proven track record of running day-to-day commercial activity and United expect him to have a significant impact.”
The report further reveals Ruben Amorim’s squad are due to go on a “post-season tour” of Malaysia and Hong Kong which could generate as much as £8 million. Similarly, United will “headline” the Premier League’s Summer Series which could net a further similar amount.
This runs the risk of overloading the first-team, however. What good is a significant transfer budget in the summer if the squad are run into the ground before the window even closes?
As is increasingly the case in modern football, executives must strike a fine balance between the sporting interests and commercial opportunities of their clubs. But the Red Devils are in the uncomfortable position of the two areas being interwoven, with one reliant upon the other for improvements and vice versa.
The steps INEOS take to improve this paradoxical relationship will define their stewardship at Old Trafford off the pitch and the success of the team on it. But it may come too late to save two of the club’s existing sponsors from bailing out.
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Darragh Fox
Darragh is a writer for The Peoples Person who spent three years as a history graduate slowly realising football was by far the most interesting thing to write about.
