Manchester United's Debt Crisis

Although, the case study of Manchester United gives us a good example of a brand’s ability to globalize, it does not give us a clear picture into how a league as a whole accomplishes these same goals. To get this clear picture of a successful global soccer league we can review a case study by Matthew Holt that examines the UEFA Champions League and its ability to succeed. The UEFA Champions League(UCL) was established after the UEFA European cup started to see more revenue increases based on the increase in television and digital technologies. (Holt, 2007) The goal of the UCL was to increase revenue through a newly structured European club soccer league. The first way that UCL accomplished this was through centralized marketing. This was accomplished through selling the television rights as the UCL brand rather than allowing the clubs to individually sell the rights to the games. This increased the value of the television rights and in turn increased the profitability of the clubs. (Holt, 2007) UEFA sold this UCL brand

However, after the Fifa scandal that occurred in 2015, sponsors are now regretting their decisions of associating their brand with Fifa. Big sponsor companies like Adidas, Kia, Coca-Cola and Visa have voice that if the governing global body doesn’t make changes, then they will reassess their sponsorships. In the most recent Fifa event that took place, Fifa’s top six Global Partners (Adidas, Coca-Cola, Gazprom, Hyundai/Kia, Visa, Budweiser, and McDonalds) paid a total of $177 million annually. After this serious scandal occurred, it is unpredictable as to how successful Fifa will be in receiving sponsorships in the future.

During presidential bids for the White House and Congressional deadlines for increasing the debt ceiling, huge debates break out as to the enormous amount of debt incurred by the federal government. Throughout our nation’s history, national debt at this magnitude is a new things. The accumulation of this amount of debt has its consequences, especially when the debt hits the nations GDP (Gross Domestic Product), or the revenue the nation takes in per year.

America was once known for being one of the richest nations, now facing a modern day depression. America starting noticing the economy going down during the collapse of the Lehman Brothers, and the global banking failure in 2008. This debt has become a burden amongst college students and the middle class Americans. This long lasting debt seems to be a drag and has no chance of getting better anytime soon.

Lastly, we will look at the possible threats. Fortunately, because of MANU’s niche market in their current location, their external threats are somewhat limited. Most of MANU’s threats come from the external environment such as the economic environment. Parents may regard soccer camp as a relatively elastic service and be willing to go without it because of the economic downturn and growing unemployment. This may be looked at as a luxury that can be done without.

Most if not all all American professional sports teams are wealthy. Teams with access to a global fanbase, traditionally have more wealth. Their assets are dwarfed by international Football clubs. According to Forbes http://www.forbes.com/sites/kurtbadenhausen/2015/07/15/the-worlds-50-most-valuable-sports-teams-2015/ Real Madrid was the most valuable team in 2015. The club is worth 3.26 billion dollars. Madrid is currently in the same situation as Barcelona. They're currently overshadowed by one player. This dangerous dependency will hurt them long term. On and off the field.

In two years the company revenue was four times greater and it was able to uphold its famous sports athletes such as Michael Jordan and includes athletes such as Lebron James, Kobe Bryant, Kevin Durant, Tiger Woods, Lance Armstrong, Derek Jeter and Cristiano Ronaldo; teams include the Universities of North Carolina/Alabama, the National Football League (NFL), and soccer giant Manchester United Football Club. Nike then began to increase and expand its visibility, popularity and brand awareness. At this point, people wanted the products their favorite players, celebrities or team have because their associate the products with victory and triumph.

“Many soccer sponsorship are like short-lived marriages without a court-ship, ultimately ending in an often acrimonious divorce. This is bound up in the power of the clubs, aware of their appeal, dictating terms of their sponsors”

We first examined Real Madrid’s revenue streams and found that from their inception through the 1970s their business model was based almost entirely on their ticket sales. After the 1970s up until 2003 they had some media rights, a small merchandising department, and some other negligible streams of income. It was in 2003 that team President Florintino Perez decided to make Real Madrid into a

It recommended that disqualification be available where a director was associated with a single failed company . ‘It is also called for the release of the government’s response to the Companies and Securities Advisory Committee’s 2000 Corporate Groups: Final Report, which had canvassed a wide range of measures for piercing the corporate veil on corporate groups’ . Other recommendations related to administrative developments to databases and the establishment of a hotline for the reporting of phoenix activity

Ticket sales are the most controllable revenue for football clubs and charging the right price for a ticket can drive revenues and profits up.

It probably makes the most sense to start any conversation about money in football with the league that makes more money than any other. On February 20, 1992, English Football League’s first division clubs resigned, and in May of that same year, formed the Premier League. The main motivation behind the merger was to take advantage of the lucrative television deals promised by Sky TV. In 1992, Sky TV paid £191 million for 5 years of Premier League television rights and in 2007, Sky and Setanta paid £1.7 billion for 5 years of rights.[2] But the television deals were just the start; in 2001 Barclaycard paid £48 million for naming rights of the league, and in 2007 they renewed the deal for £65.8 million. In short, the clubs’ decision to form their

Tottenham is part of a stable industry where the demand is inelastic due to enormous fan following and is the number one sport followed all over the U.K. People either go to stadiums or watch the matches on the television.

Manchester United bought the most expensive player in the world, Paul Pogba, not even a year ago, and are looking doing the exact same thing this upcoming summer. The same summer that Manchester United announced Pogba was returning to Old Trafford, Juventus bought Gonzalo Higuian for an Italian football transfer fee. This year, Real Madrid just spent about $50 million on Brazilian wonderkid Vinicius Junior—who is 16 years old. Manchester City also just signed Monaco's Bernardo Silva for $55 million. Then everyone is after Monaco's 18 year-old Kylian Mbappe who will command more $100 million. These are just a few examples that come to mind.

The writer will provide evidence to suggest that the shrewd branding of the UCL and the cognisant approach taken towards the competitions life cycle have been major influences in this meteoric rise.