And yes Manchester United have spent money but they have funded this by selling the jewel in their crown (Ronaldo) and releasing more and more players (Paul Scholes, Gary Neville, Edwin van der Sar and Owen Hargreaves, John O’Shea, Wes Brown and Gabriel Obertan to name a few).
Their league position says they are doing ok. But… they chose not to or could not afford to buy Wesley Sneijder, Samir Nasri, Luka Modric…, and meanwhile in terms of their youth development they were knocked out of the league cup by Crystal Palace at home – which is an unfortunate thing to happen just before going out of the Champions League.
Now I know that looking for signs of United’s decline is a game that has been played for years and years. That mega-income from marketing created the ability to succeed and has driven the transfers. But consider the Glazers cost to Man U.
In 2009-10 the EPL clubs lost £500 million overall. 16 clubs made losses, four made a profit. In the case of Manchester United the Glazer family has cost the club £350m in interest, fees, loans and bank charges since 2005. In the year to June 30 2010, United paid £42m interest on the £500m loans the Glazer family originally took out to buy the club, and refinancing that debt cost another £65m. They are the bankers favourite club.
Leaving aside the Glazers, there are four models in football finance:
Model A: The benefactor pumps money in and the club aims to buy the best talent around. This used to be the standard model, but now Chelsea and Man C have taken it to extremes and Uefa want to cool it somewhat. In fact it is this model that the Glazer’s reversed.
Model B: The marketing model. Manchester United developed this from the 1960s onwards when it was not at all fashionable, building on the desire of their support from across the UK (remember the notorious Man U Supporters Club London Branch?) to identify with the club. Arsenal are often said to have struggled in the wake of the ever enlarging Man U onslaught onto the market, but there are, I am told, real signs of an Arsenal marketing breakthrough which will be revealed in next season’s figures.
Model C: World wide scouting and youth development. Arsenal are still supreme at this, finding the brilliant young players and taking them to higher levels. The profits on players like Adebayor, Fabregas, Nasri, Vieira, Henry, Anelka are just not seen anywhere else in football.
Model D: Matchday income. Model D although helpful is not enough on its own. Model D is income from TV, the ground and the like.
Here’s the latest matchday income chart expressed in Euros with the final column showing the club’s position in the overall money league.
Watch Arsenal Live Streams With StreamFootball.tv
|13||Atlético de Madrid||35.9||17|
Match day income comes from three sources – the money taken at the ground on the day, the broadcasting income and the other commercial activities
|Matchday %||Broadcasting %||Commercial %|
|15||Olympique de Marseille||18||50||32|
|17||Atlético de Madrid||29||50||21|
What this shows is that Arsenal have used the matchday income as a way of catching up Manchester United while they have been stuck over the marketing income because of the long term deals signed for the new stadium.
Now here’s the point: matchday income is the hardest to increase without building a new stadium, because you have a set number of seats and the cost of entry (although it can go up) doesn’t go up very often. In the UK the clubs cannot go out and negotiate on their own and the EU ruling allowing us all to buy into Greek and other TV stations to watch saturday afternoon games is having an impact on Sky, which pays the bills.
Further, broadcasting rights are impossible to manipulate on their own since they are related to the contract signed and the desire of the broadcaster to show your team – plus the sharing process that occurs in some countries such as England, so that even unpopular teams get a fair size of the cake.
But marketing income can be manipulated, and Manchester United has been at full speed ahead for decades – and yet there is still a slow down in their purchasing of players.
The other problem (and it is one rarely written about – indeed I got a load of abuse from some correspondents when I dared suggest that the highly regarded Swiss Ramble had not taken it into account) is that marketing income does have a limit. It is much more expansive than matchday income because it has nothing to do with a fixed number of seats in the stadium, but even so, there comes a point wherein the limit is reached.
With marketing income it is hard to see where the limit is – I thought that Man U might have reached it two years ago, and then they do a deal over the training kit, which shows what I know about marketing. But even so my thesis is right: there is a limit.
We all know that because of the front loaded deals on the Emirates Stadium Arsenal have had their hands tied. We all know Manchester United has been filled with success in this area. It is a judgement as to whether Man U have reached the limit – but if they have, just at the moment that Arsenal have started to unleash their marketing power, backed by the legend of Wenger, the entire history of the club, and the quality of the stadium, then things could be changing.
And it could also be a second explanation – along side the Glazer’s – as to why Man U are not outspending everyone else on new players.