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Why United is now too big for Manchester

There will be those who are bound to blame the hated Glazer family for the controversial decision  which will see the super successful Manchester United commercial operations move to swank offices in Mayfair. The club has agreed a deal to occupy 11,500 sq ft of luxurious new office space in the heart of London’s West End. The deal is certain to exacerbate frustration from the club’s fans who feel their American owners have lost touch with its roots. Their latest move certainly hasn’t helped matters with many claiming that the commercial team should be based in Manchester.

The deal however highlights the commercial success the club has enjoyed since launching operations in London three years ago. United set up a team in a Pall Mall office building designed to secure new sponsorship deals from around the world. It said London was a more practical base for overseas companies travelling to the UK for sponsorship talks. But the team soon expanded and required larger office space. As officebroker.com reported on its website LINK “This prompted the search for a new base that led the team west to the prestigious Mayfair – home of the United States embassy, the Royal Academy of Arts and The Dorchester.

Under commercial director Richard Arnold, United say the team has increased commercial revenues from £42.5m to £80m through deals with the likes of AON, the US insurance broker worth £20m a year. United will pay rent of almost £80 per sq ft at the Mayfair office, but the club does not want its specific location disclosed.

The move does have accessibility on its side – with several major airports, trainlines, and the underground. But whether this justifies an office in Mayfair at £80 per sq ft remains to be seen. Let’s not forget that Manchester has its own international airport, multiple transport links, and of course the stadium itself – not to mention cheaper office space, should the club ever need to cut down on expenses.

But at the moment the need to save money seems unlikely given the commercial teams impressive track record. According to The Telegraph, the division’s London base has strengthened the club enormously – helping to increase commercial revenues from £42.5m to £80m under Arnold. So from a business perspective the team are certainly earning their keep and successfully pushing the club ever forwards – which should help to keep the fans happy.

While some may not feel comfortable with such a move, it’s further evidence of how United is now a giant amongst world sporting brands which must surely auger well for the future.

Manchester United by numbers

£278.5m – The amount of revenue generated by Manchester United in 2009. This compares with £257.1m in 2008 – an 8pc increase.

£123.1m – Manchester United’s wage bill in 2009, compared with £121min 2008. West Bromwich Albion had a total wage bill of £30m in 2009, and Chelsea shelled out a total of £167m.

£82.3m – United’s operating profit before player trading in 2009.

£21.6m – United’s pre-tax profit in 2009. This compares with a loss of£44.8m in 2008.

£566m – Manchester United’s net debt levels at the end of 2009.

£3.3m – The amount Manchester United spent on its stadium facilities in 2009.

£80.3m – The amount revenue from commercial sponsorship has risen to, from £42.5m, in four years.

£80m – Aon’s 4-year shirt sponsorship deal with the club.

£302.9m – Size of the record 13-year Nike sponsorship deal.

Do you consider the commercial divisions move to Mayfair good for the club?

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No Responses to “Why United is now too big for Manchester”

  1. Andy says:

    I do support the move to Mayfair, its further evidence of how big Manchester United are. We are the biggest club in football, we make massive incomes of cash every year, we are the most valuable club in sports, we are the global phenom, we are the worlds best supported club, we are footballs money making machine. We are Manchester United, we do what we want.

  2. Andy says:

    We also fit perfectly in with the new UEFA fair play regulations that come in the summer, pity for Chelsea and City they do not.

  3. Frank Scicluna says:

    Careful Andy, you’re going to be accused of being arrogant by the bitters -:)

  4. RedScot says:

    There is no doubt, a commendable % Increase,In commercial revenue.Which I suppose is just on the back of the Manchester United brand.World wide appeal.
    With the correct marketing excutives and talent to attract Investors,this can be achieved and it has been.
    Its odd to me, they allowed a similiar deal for the Shirt sponsorship, to be matched bye a lesser brand like,Liverpool.If you consider,as one example,media exposure, which United command in relation to Liverpool.
    This relocation of office suites, to me sounds like Monopoly,Pall Mall, to Mayfair.Its all front and address,for use on fine headed paper.Its as we say in Scotland, fur coat and no Nickers.Just direct them,go to Jail.Permanently.
    Simple lads like me, will never understand this corporate, jiggerypokery.
    There must be a purpose behind it.Smoke and mirrors.
    .
    I am letting the United bye numbers, slip bye.As I could add some “interesting” numbers to that list. 😉 Interest incurred to date, since their hijack, as an example.
    Anyhow I am going to take a Chance.:)

  5. Andy says:

    The revenue income of the past year is £286m, the interest payments are £46m annually, the wage to income stands at 46%, the interest payments have little effect with revenue ever growing, a few simple figures that adds up to fitting the UEFA financial fair play regulations. I fully believe that this year we will break the £300m barrier.

  6. Andy says:

    The worlds biggest most famou club Manchester United are a money making machine with an incredible commercial department. and not only is it a success but the club also haves £150m in the bank, EBITDA is roughly £100m and growing, the interest is £45m annually for the £500m debt, club revenue is at £286m and growing, the wage to income stands at a healthy 46%, so as everyone can see, Manchester United are strong financially and easily fits the new UEFA FFPR coming this summer.

  7. RedScot says:

    Its a shame though, that since the Glazer hijacked, this club, the “net” spend on football player’s per season is a pathetic £2.1 Million per year.
    Possibly I live in a different world.
    I think, its called reality. 😉
    Shame is probably not the correct word, I will leave the 4letter words out of it.
    The wage %, thats quoted, is historical.Yes, United, do have the lowest % of spend,expressed in relation to turnover.Thats not really the point is it?
    Anything, Manchester United, have achieved while they have been in charge, is despite the Glazer, what have they contributed to United ?.
    Many things, not least season ticket holder, demand “gone”.Match day revenue,static.Secretive and not being, transparent.
    The “Rah Rah” boys, will still, continue to “Rah Rah” and not understand the consequences of their actions.

  8. Andy says:

    Fair Enough RedScot, your entitled to your opinion, the Glazers afterall hasnt ever really contributed anything to United except put effort into helping improve the commercial side and stadium/training ground improvements…..and to be fair, that can be combatted by them putting us in debt. Our good financial structure is sound due to United, the fact that we have always had a strong foothold on financies isnt down to the Glazers but is because of the way Manchester United operate.

  9. RedScot says:

    @Andy, fair enough mate.I just disagree with what you are implying.”Our good financial structure is sound due to United, the fact that we have always had a strong foothold on financies isnt down to the Glazers but is because of the way Manchester United operate”
    .
    They own United, so they dictate how United will be run.As you highlight in your own post,the amount of money,”wasted” to service the leveraged purchase,on interest.Just think Andy if that money was being channeled into the team.You can only imagine the quality of football players,we could be watching.
    Any progressive owner of a buisness, should invest in the buisness to develop it to its capacity.As an example, developing Old Trafford to acommodate,more support,in the South stand.To increase the turnover, to be on a level footing,with the likes of Barcelona,via match day Income.
    We could go round and round in circles with this mate.I just dont see what they bring to United.
    .
    Cheers.I am done with this topic.My position is crystal clear.

  10. kurt says:

    how many of you plastic fans are actualy from manchester.plastic thick morons.oh yeah the biggest club in the world.ask ronaldo.he dont think so.bunch of clobbers.the arsenal way the barca way.the man u way.no dont think so.morons.

  11. RedScot says:

    kurt Says:
    February 10th, 2011 at 6:12 PM
    how many of you plastic fans are actualy from manchester.plastic thick morons.oh yeah the biggest club in the world.ask ronaldo.he dont think so.bunch of clobbers.the arsenal way the barca way.the man u way.no dont think so.morons. kurt……….>”Imbecile”

  12. CollyhurstRedArmy says:

    “the arsenal way” A guide on how not too win PMSL

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