[dropcap]F[/dropcap]inancially, Manchester United is the world’s élite club. A summary of finances for 2016-17 shows revenues totalling £581 million; larger than Real Madrid or Barcelona, Paris Saint Germain or Manchester City. Despite huge investments in terms of player recruitment, contracts and signing on fees, a profit of near £40 million was also achieved. Meanwhile, the projected revenue for the current financial year is guided to reach £575 to £585 million. Noisy neighbours Manchester City may have the backing of Abu Dhabi’s sovereign wealth, but it is United that still leads the way on commercialisation.
In fact, the club represents an increasingly massive cash cow for the Glazer family, with revenues accelerating since Ed Woodward took on the role of Executive vice-chairman in 2012. United’s global status has been shamelessly exploited in Asian and American markets by a club willing to partner up with the highest bidder across many product and service categories. United is now a “global partner” to a staggering array of businesses and organisations that want to align with the club: Adidas, Aon, Chevrolet, 20th Century Fox, Aeroflot, Apollo Tyres, Canon Medical Systems, Casillero Del Diablo, Tag Heuer, and Uber, to name just a few. Most recently, Woodward announced a global tractor partner.
[blockquote who=”” cite=””]The club represents an increasingly massive cash cow for the Glazer family, with revenues accelerating since Ed Woodward took on the role of Executive vice-chairman in 2012.[/blockquote]
Woodward and his mostly London-based commercial team led by Richard Arnold have, ethics and integrity aside, demonstrated a masterful command in maximising the brand’s earning potential. United will now proudly stand by the side of any firm that is willing to pay.
By contrast, on the pitch, it has been a very bumpy transition since Sir Alex Ferguson retired at the end of the 2012-13 season. It is perhaps all more impressive that the club can continue to increase earnings regardless of on-field success.
It is a story of constant adaptation to the market, in which all boats are rising. Global accessibility to and coverage of the game has changed irrevocably over the past 10 years. The younger audience is more comfortable with social media, memes, and soundbites than watching 90 minutes. Attention spans are getting shorter, and the desire for brand association is sought more than emotional investment and commitment. Instant gratification is demanded; if there’s no YouTube showreel of a player’s ‘tekkers’, then he cannot be a player of note.
Perhaps this explains why the business model has continued to work despite the mundanity of United’s performances in the post-Fergie era. Speaking about the acquisition of Alexis Sanchez in January, Ed Woodward gleefully informed investors that over that month, the transfer had generated three times more shirt sales than any other player in the club’s history. The transfer set new social media records for the club’s accounts, and generated “75 percent more interaction than Neymar’s world-record move to PSG last summer. It was the biggest United post on Instagram with two million likes and comments, the most shared United Facebook post ever, the most retweeted United post ever, and the hashtag #Alexis7 was the number one trending topic on Twitter worldwide.”
It is also how the club operates in the transfer market under Woodward. Players are viewed as commercial assets, and marketability takes precedence over effectiveness. Five years on from replacing David Gill, Woodward has developed a strategy that delivers high-profile transfers after his early clumsy dealings in the market. He once resembled a lonely drunk stumbling around a nightclub as he publicly failed to woo Sergio Ramos, Cesc Fabregas, Thiago Alcantara, Toni Kroos, Gareth Bale and even Cristiano Ronaldo. Woodward managed only to bag each of these world stars bumper new deals with their existing clubs.
Of course, it didn’t take Woodward long to realise that he could overcome this problem by outsourcing it to agents. He has made Mino Raiola, agent for Paul Pogba, Zlatan Ibrahimovic, Henrikh Mkhitaryan and many others, the best paid man in football.
Ferguson was no fan of Raiola, once stating that he distrusted the agent “from the moment” the pair met. This ringing endorsement fell on deaf ears at Old Trafford, especially with Woodward under fire. Many of the club’s transfer dealings are now conducted with clients of Raiola and another super-agent, Jorge Mendes. The desperation of United’s hierarchy to land players of suitable fame has left the club at the mercy of unfathomably wealthy vultures, who generate offensive fees for babysitting the commodities signing huge contracts.
During the period between October 2015 and February 2016 United spent more than £10 million on agent’s fees. This was almost double the amounts spent by Liverpool and Manchester City – at £6.6 million and £5.8 million respectively – over the same period. United did not make any signings though, with the sum attributed to re-negotiating player contracts.
Meanwhile, Raiola is reported to have pocketed £41 million for his role in bringing Pogba to Old Trafford, and £12 million for allowing Romelu Lukaku to sign on the dotted line for United instead of Chelsea. More recently, between February 2017 and January 2018, United spent more than £18 million on agent fees, although this was far from the highest in the division. Raiola, as Pep Guardiola has articulated this week, has only his own interests at heart.
Paying these fees does not appear to be a problem for the club nor Woodward though. Certainly, Woodward is held in high regard by football’s super agents as he fires lorry loads of cash from his seemingly bottomless money pit. It is, of course, how things now work at the highest level of European football.
“He now has a reputation with agents for being very transparent and very clear,” noted former Inter Milan CEO Massimo Morratti, in a puff piece published in the Mirror last summer.
“He surrounds himself with experts and makes sure he is advised by the right people. He’s a very, very confident businessman and highly intelligent. He can sense what is right and what is wrong. From what I hear and what I have seen at that level, Ed is highly respected.”
United remains one of the worst offenders: a once astutely run club that maintained a level of integrity and footballing tradition, has become a global corporation, with a transfer policy dictated by businessmen with little background in the sport.
[blockquote who=”” cite=””]United, once an astutely run club that maintained a level of tradition, has become a global corporation, with a transfer policy dictated by businessmen with little background in the sport.[/blockquote]
The result has been a disjointed approach to player acquisitions, where many of the stars arriving at the club over the last five years have failed to offer a return on investment. Fans have purred and social media has blown up with the arrival of names such as Radamel Falcao, Angel Di Maria, Bastien Schweinsteiger, Pogba, and Alexis Sanchez. In many cases the level of due diligence carried out in relation to these marquis acquisitions has been low. While, there has not always been a clear strategy for moulding undeniable talented into a cohesive team structure. It is also a strategy that appears to deprioritise the future in favour of short-term gratification and trending hashtags.
“I watched Gabriel Jesus play three years ago. I watched Kylian Mbappe for a year,” noted Ryan Giggs recently. “I was watching them with the scout and it was a no-brainer. It was just like ‘Get them’. It would have been £5 million or something — get them, loan them back — and that’s where the recruitment could have been better.”
There were seemingly no efforts made at Old Trafford to sign either player, both of whom would have arrived with little fanfare but offered massive potential.
This is not the players’ fault. Offer professionals crazy sums of money and they will gladly represent the highest bidder. The result, though, is the accumulation of talent, some of whom have questionable desire to play for the club.
Managerial changes over the past few years have also meant that the continuity of approach under Gill and Ferguson is now long gone. There have been material differences in philosophy between David Moyes, Louis Van Gaal and now José Mourinho. The board got these managerial appointments badly wrong. Over the last five seasons there has been an increasingly obvious lack of leadership and a high turnover in the playing squad, with a further overhaul widely reported to be taking place this summer.
This can be little surprise given the approach to recruitment is a phone call to a small group of self-interested agents. In the short-term, Woodward has created an adequate buzz to maintain the club’s status among the financial élite. The question becomes whether it is sustainable.
While Mourinho has improved United to the point where the club is a distinct second in the league table – despite Saturday’s victory at the Etihad – the team is a long way from winning one of the two trophies that really count. The longer the on-field malaise continues, the more it could eventually cut into the global intrigue that the United brand enjoys, while City, PSG, Real Madrid and Barcelona hoover up the world’s talent and trophies.
Analysing the various incarnations of team that Ferguson produced offers a guide. While the quality varied, they were always developed according to his vision and ethos. He took a personal interest in the character of the players he was signing, and ensured they actively wanted to play for the club. This included players from home and abroad, but each was acquired for what they could deliver on the pitch. Gill did not greet new arrivals with news of the shirt sales they would generate, nor the media coverage it offered the club. United paid fees and wages in accordance with the time, but not often in excess of the other leading European sides.
Consider the first title-winning side that Ferguson constructed. Relatively unheralded players were sourced from Europe at bargain prices, including Peter Schmeichel and Andrei Kanchelskis. Steve Bruce captained the side and he was probably as unfashionable as imaginable, but a critical component. Gary Pallister was the most expensive defender in Britain when he signed, but formed the base of the Ferguson’s early successes. Roy Keane was signed for a British transfer record fee, but repaid it many times over. Ryan Giggs and Lee Sharpe were exceptional young players introduced into the side to balance the experience of Bryan Robson and Brian McClair. Mark Hughes was a warrior if not quite prolific, while Eric Cantona was seen as a gamble but became one of the most influential of all Ferguson signings.
How times change. Football has evolved greatly in recent years and it is not possible to recreate the past. What has become abundantly clear, however, is that the club should rebalance its decision-making to favour football, not finance.
That opens up a separate discussion around who is best placed to make these decisions, and how this should be structured. There is no doubt that Woodward has achieved remarkable corporate success, but it is not clear who has the final say over players transfers, in and out of the club. There is also room for debate as to whether Mourinho is the right man to make those decisions given his track record of short-termism and inflated ego. Other clubs have successfully employed a director of football to offer an over-arching consistency in player recruitment. It might be that the days of the dictator-manager, in the mould of Ferguson and Arsene Wenger, are now gone.
While the shape of the future is debatable, the need to return to some of of the past is not. There remain some examples of United developing its own talent, with Marcus Rashford, Jesse Lingard and Scott McTominay featuring in the first team squad, but there is little satisfaction in seeing the regular arrivals of expensive, jaded internationals with little emotional connection to the club.
It was once thought that leaving United was a backward step. That reputation is being eroded. In football terms, the club is poorly run, if likely to finish second this season. Today’s scouting network offers little dividend, and players are brought in with little long-term thought and are often poorly treated, with some declining in quality after signing. The proud traditions and standards of the past needs to mean something or United could face becoming little more than a soulless corporate entity associated with past glories.
5 thoughts on “Stepping back to move forward”
Totally with you here. I think Ed Woodward might be able to run the financial side of things, but Man United is clearly suffering from not having an established football vision.
United really needs to start institutionalizing footballing ethos and philosophy. Start setting and laying out a longer-term vision. This starts with the academy, and flows through to recruiting and even selecting the manager.
Appointing a Director of Football would help. And maybe switching Mourinho for someone with potential rather than an established reputation. I think Mourinho has brought the club as far as he can. It’s time to take the next step forward.
‘During the period between October 2015 and February 2016 United spent more than £10 million on agent’s fees……. United did not make any signings though, with the sum attributed to re-negotiating player contracts.’
In less that six months, ten million quid paid out in agents’ fees just for renegotiating existing players’ contracts. If only someone or something would come along and derail this disgusting gravy train.
Excellent article. I have one beef though.
“During the period between October 2015 and February 2016 United spent more than £10 million on agent’s fees. This was almost double the amounts spent by Liverpool and Manchester City…”
This is pretty weak point. This period is too short to draw any meaningful conclusions. The period includes the January transfer window which is typically quiet enough that any player transfer would have a meaningful impact in terms of agent fees.
Also, if the agent fees really did have to do with contract renegotiations, then it also could be due to us renegotiating several contracts during that short period and other clubs not.
With Woodward & Mourinho there appears to be a fixation with the Galactico or proven player. United has always promoted from its youth ranks, which is why so many hope the likes of Rashford fulfill their potential. United has also purchased the best raw talent and turned them into a world class players eg Criistiano Ronaldo & De Gea. I thought this was the plan for the likes of Shaw & Martial. Can’t see it happening with Woodward & Jose. The rant the manager went into at his press conference after the Sevilla game was all about self protection. The current regime care little about longer term growth of the club it’s about balance sheets and Mourinhos legacy before he alienates too many of the squad and clears off to his next paymaster.