After A Season Of Mixed Results, Manchester United Must Spend Big Again This Summer
Just over 12 months ago, Manchester United (MANU) sacked the then Manager David Moyes following a disastrous campaign after the retirement of legendary manager, Sir Alex Ferguson. Following these events, football analysts and pundits claimed that Manchester United had to spend at least GBP 200 million in a bid to turn things around. The club ended up spending a little over GBP 153 million, and while this was well below what many anticipated, it was the highest amount of money the club had ever spent in a single transfer window.
Nonetheless, after nine months of mixed results, Manchester United is highly tipped to go down a similar road this summer by spending at least another GBP 150 million. However, the club should expect to get most of its targets this summer especially after securing fourth spot finish, by seeing off bitter rivals Liverpool in the Barclays Premier League, which gives them a chance of qualifying for the UEFA Champions League, via a playoff.
Will this Spending hurt Manchester United Finances?
There are not many clubs that can spend in excess of GBP 150 million in two consecutive seasons and still remain financially stable. In the financial year 2014/2015, Manchester United’s finances will certainly be hurt following a year without European football, and it could have been worse if not for the huge sponsorship deal it secured with the US automobile giant Chevrolet, which kicked in last summer.
Manchester United have the best shirt sponsorship deal at GBP 53 million per year, and things are soon to get better this coming season as they expect the GBP 75 million a year kit supply deal signed with Adidas (ADDYY), one of the world’s leading sportswear manufacturers to kick in at the beginning of August this year.
The 10-year GBP 750 million deal will certainly improve Manchester United’s financial position going into the new season, and most importantly, this also gives the club a chance to spend more this summer transfer window without worrying much about breaking the Financial Fair Play rules, which UEFA president Michel Platini has anyway indicated that they could be softened in the near future.
In a nutshell and from a financial perspective, Manchester United expects to receive at least GBP 150 million from its main sponsors, which include General Motors’ (NYSE:GM), Chevrolet, Adidas and the training ground and training kit sponsors Aon Corporation (NYSE:AON). Additionally, with the new Barclays Premier League broadcast revenue set for a revamp, this means that Manchester United are well-poised financially and could soon be looking at revenues in excess of GBP 500 million.
In a recent Forbes valuation, the club was placed third globally slightly behind Spanish football giants FC Barcelona and Real Madrid, but with the new Adidas deal and the TV broadcast deal set to kick in, analysts are convinced that Manchester United is close to regaining its position as the world’s most valuable club.
Conclusion
The bottom line is that Manchester United will spend massively again this season, and this time, it has the ability to attract more top names than it did last summer. Additionally, the club is expected to even more financially stable following the Adidas deal, and with the New Barclays Premier league broadcast deal also in the pipeline, now may not be a bad time to buy the stock.
The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does it ...
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