Manchester United's Debt Crisis

1504 Words7 Pages
Not a single firm is immune from having issues that need to be addressed in order for the company to stay competitive. Though not traditionally thought of in a "business" sense, Manchester United is every bit a corporate entity that seeks to remain competitive and profitable. Although, competitive in this sense is much more literal as actual head-to-head competition takes place. While Manchester United has been at the top of the soccer world for close to three decades, it may now be in its most dire position competitively and financially. Issue 1: Manchester United’s Debt One of the first strategic issues we see with Manchester united is their massive debt from takeover by Glazer family. The Glazer family, who took out $1.47 billion in…show more content… Issue 1: What they are doing Manchester United is doing their best to fix this issue. For example, in 2014 Manchester United made a uniform deal with Adidas, the richest deal that has ever been made in sports. This deal is worth $130 million yearly and states that Adidas will pay United out over a 10-year period that begins in the 2015-16 season. In addition, in 2012 they signed a seven-year shirt deal with Chevy of $559 million. The combination of cash flow from both of these deals will allow the club to attract and retain the best players and hopefully allow the team to qualify for the Champions League in upcoming seasons. The club also receives roughly $25 million per year as part of AON 's eight-year $200 million sponsorship. These rich deals that they have made are clearly a strategic move on Manchester United’s part. These sponsorship deals have been increasingly taking over more of the overall revenue percentage, going from 36.7% in 2012 to 43.7% in 2014. The boost in cash flow will allow them to be more competitive in recruiting and more attractive to top talent. This will open the doors for United and help them come back strong. Issue 1: Recommendations Some of the recommendation and implications would be to release more control of the corporation to the public. In order to
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