Why Manchester United Are Best Set to Emerge as a Powerhouse Post-COVID

Manchester United has been a club that has never lived up to its brand and expectations since the departure of Sir Alex Ferguson in 2013 after 26 years on the touchline. Within 26 years, Ferguson won multiple trophies including 13 Premier League titles, 2 UEFA Champions Leagues and 5 FA Cups. Within the past 7 years, there have been four managers in charge who combined have won only four trophies. None of these trophies were Premier Leagues or Champions Leagues. Three of the four trophies were won by Jose Mourinho who got the sack in December 2018 and an FA Cup was won by Louis Van Gaal who preceded Mourinho at the helm. The downfall of a club with such a great history has not been the fault of the managers who followed Sir Alex - it is a more complex issue, and one that is in the front office of the club.

Well, what is the issue then?

In 2005, the Glazer family purchased Manchester United. Ed Woodward, an accountant with no football background, assisted the Glazers and then was hired to work for the club after the takeover. In 2012, David Gill (former CEO) left the club and Woodward was now given full power to be in charge of and run the club from a day to day basis. Woodward has since been in charge of the club’s commercial and footballing activities (instead of a Director of Football which many have called for) and let’s just say that this has not worked out well for the club at all. The club has spent close to one billion pounds on transfers, some which are star players who can be considered nothing but a failure at the club. Names such as Alexis Sanchez, Falcao, Di Maria and Pogba come to mind. This is the result of a lack of a clear footballing strategy for what the club wants to build and achieve on the pitch rather than off the pitch. A prime example of this is United selling Lukaku to Inter Milan in the summer of 2019 without signing a replacement, only to be left with three players who can potentially play as a No. 9. The effects of this were felt when Marcus Rashford got injured earlier in the year and the club had to scramble to sign Odion Ighalo as a replacement on a 6 month loan. Clearly under the direction of Woodward, United have scrambled to build a product on the field that has lived up to expectations due to a lack of a strategy. What happens on the field is the core product of any club and he has made nothing but a mess of it.

After all, he is an accountant with no footballing history, what were the Glazers thinking? Well, with an accountant in charge United have seen nothing but improvements and increases in their commercial activity off the pitch. Even though they are not the best performing team in the Premier League, United are the league’s highest earners with revenues of over 700 million pounds in 2019, according to Deloitte. It gets even better though. Take a look below at the club’s revenue streams broken down from Deloitte’s Football Money League Report this year.

Most football clubs in the Premier League are mostly dependent on broadcast as their main source of revenue. For bigger brands such as Manchester City, Liverpool and the rest of the big six, these clubs earn much from commercial income and are not as dependent on broadcast revenue as a mid-table team such as let’s say a team like Wolves would be. The lower down the table the clubs are, is likely the more dependent they are on matchday and broadcast as a source of income as the big six are those that rake in hundreds of millions in commercial revenue such as sponsorship and merchandise revenue due to their high brand recognition.

Woodward has been behind the completion of multiple partnership and sponsorship deals for United including some with coffee traders, mattress companies and noodle companies around the world which have been ridiculed. United have roughly 30 international partners - probably the most in the league. All these partnership deals provide the club with commercial revenue which is likely the reason behind United still being the Premier League’s top earners although other clubs earn more from broadcasting revenue due to higher finishes such as Liverpool and Manchester City.

How does this make Manchester United set to emerge as a powerhouse post-COVID?

Well, due to the coronavirus pandemic and the halt placed on football. Football has been majorly affected especially as most clubs survive from hand to mouth. Meaning that, as the revenue is earned it goes straight out the door to pay the players’ hefty wages - which for most clubs constitute 50% or more of its revenue. Due to the halt of the game, broadcast revenues are at threat of being earned (if the Premier League does not restart this alone can be a loss of one billion pounds), ticket sales are at zero for the time being especially as fans won’t be allowed in stadiums for now. Therefore, clubs have lost major sources of revenue and remember as said earlier most clubs are highly dependent on broadcast revenue to survive (specifically those in the Premier League). The other source of revenue? Commercial. That’s where Manchester United have been making big bucks due to their almost 30 partners - some of which have been ridiculed. This has made United’s earnings more diversified and less dependent on broadcast revenue.

Therefore, due to the major losses of revenue by all football clubs as a result of this pandemic, United as a result of Woodward’s strategy over the past few years has given them a financial backing they can exploit. The transfer market is destined to crash due to the fall in revenues across Europe for football teams. Clubs will find it difficult to fork out over 100 million euros OR pounds to make transfers. How the transfer market will look is a whole other discussion to be held. However, the point is as many clubs have lost/reduced their major sources of revenue, United have somewhat of an “insurance” with all the commercial revenue they have generated which may give them the financial edge of other clubs. Therefore, the club may be able to splash cash at top tier players, which other clubs might not be able to do. However, Woodward has said that United’s spending may be reduced as a result of the pandemic (United are still paying all staff and players 100% unlike other clubs). This is to be seen but Woodward has given United a good financial backing for the post-COVID future as he has diversified the club’s revenue stream.

There may be one issue with this though. The lack of a football strategy.

United have splashed the cash before as mentioned, spending around one billion pounds since 2013 and this did not go well as a result of the lack of football strategy by the club. Reports have indicated that the club do not want a Director of Football to lead the footballing strategy and that the powers are left to Solskjaer and Woodward. So although the club may be able to spend unlike other clubs in the transfer market the lack of a Director of Football and a poor sporting strategy may affect the club negatively with a promising opportunity ahead of them.

There is reason for hope however. The signing of Bruno Fernandes in January has seen the club pick up speed on the field recently. Although the footballing strategy is not clear, it is starting to become apparent. In summer 2019, the club signed youngsters Daniel James and Aaron Wan-Bissaka with youngsters such as Scott McTominay being a core part of the first-team squad. The philosophy appears to be the recruitment and development of young players who will develop into top Premier League players in the future and bring the club back to where it should be on the field.

Manchester United clearly have a potential opportunity ahead of them to exploit at the end of this pandemic. It remains to be seen if this will be the opportunity many think it will be and how it will be approached without a Director of Football. But as said, recent signings and performances have given fans around the world optimism about what this club could be in the future which may only be enhanced by the coronavirus pandemic.