Nike Sponsorship

[FanchesterCity]

I think you can balance that argument with the fact that we have more players that sponsors want to see on the back of the shirt and that virtually all of them are decent human beings and 'good role-models'. This is true throughout the team, be that a world star like Aguero or someone like Joe Hart who is very marketable in his own right as the England keeper (as evidenced by the ridiculous amount of ads he is in). I don't think I am being biased in saying that the rags can't offer that at this moment in time. We should have negotiated a better deal.

I think there's a distinct difference between a kit manufacturer and a sponsor though. A kit manufacturer's profit from such a deal is hugely influenced by shirt sales, which in turn correlates very closely with fan base (not 100% correlation, but not far off). A sponsor is far more concerned with exposure and association with a successful, clean living club.

Obviously there's a bit of crossover, but the two are different.

You should see Liverpool and United on matchdays, full of tourists buying up shirts, and matchdays are only a fraction of the worldwide sales.

Joe Hart's global recognition is nowhere near that of Rooney. Aguero might be on a par with Van Persie, difficult to say. Man United STILL benefit from the Beckham shine! Right now, United are at a low ebb, and we are on a high, but they'll still beat us in player awareness around the world. It's take a good while to knock them off their perch I'm afraid, but brick by brick, we can dismantle them!

I understand your point, but the adidas deal with the Shite just doesn't stack up purely on shirt sales. It's one of the reasons Nike pulled the plug.

The Shite sell 1.4m shirts a season. Let's say they're £50 a pop, that's only £70m turnover. That's before you've taken manufacturing, shipping, retailers margin and taxes out.

adidas are paying them £75m a year, there's absolutely no way that is profitable from a purely shirt sales point of view. They are paying a premium for the brand exposure The Shite gives them in the far east, and so they can say they've got a bigger dick than Nike.

I agree, I raised the same question somewhere else on the forum about how those figures add up.
Obviously it's not JUST shirt sales, so we need to be careful of that, it's lots of other merchandise too.... posters, sportswear, bags, and probably use of player images on general Adidas advertising, but still, it's very hard to see where any substantial profit is coming from.

Adidas CLAIM they can make 1.5 billion from the deal overall. IF that's the case, you can bet your arse that Real Madrid will be on the phone to them wanting to have a little chat at how Adidas claimed (probably) they could only make half that with Real.

The way Adidas are spinning it, it's not even a 'tight' return... it's double! I just can't quite believe it to be honest.

Adidas are also sponsors of UEFA, shareholders in Bayern, and MAJOR sponsors of FIFA. How can that really be impartial? They will want United in the CL and are they going to keep their mouth shut about UEFA decisions at meetings? I doubt it.

 

[Deleted member 58678]

You're absolutely right.

We do tend to have sky blue coloured specs on, but the reality is, our fanbase is small. It's growing, but both Liverpool and United have complete generations of fans all over the world. Like it or lump it, Liverpool were kings of Europe for fair while, and United garnered massive support after Munich, and managed to hold on to much of until Fergie arrived. They then gained a whole new generation of fans.

Chelsea are probably the ones we aspire to match. Sounds awful when written that way, but it's the truth. We are a good decade behind them. We're doing brilliant from where we started, but there's a long long way to go.

We have to start doing quite well in CL and winning leagues as often as we can. Marquee players are a must for us too, I wish they weren't but they are.

When you think Chelsea were winning trophies from about 1997 onwards, challenging for the Prem and finishing second in 1998 and getting to the Champions League quarter-finals in 1999 we are a long way behind them. They'd already been at it at the top for around eight years by the time Abramovic came and got to the CL semis that first season under him.

 

[Shaelumstash]

I think there's a distinct difference between a kit manufacturer and a sponsor though. A kit manufacturer's profit from such a deal is hugely influenced by shirt sales, which in turn correlates very closely with fan base (not 100% correlation, but not far off). A sponsor is far more concerned with exposure and association with a successful, clean living club.

Obviously there's a bit of crossover, but the two are different.

You should see Liverpool and United on matchdays, full of tourists buying up shirts, and matchdays are only a fraction of the worldwide sales.

Joe Hart's global recognition is nowhere near that of Rooney. Aguero might be on a par with Van Persie, difficult to say. Man United STILL benefit from the Beckham shine! Right now, United are at a low ebb, and we are on a high, but they'll still beat us in player awareness around the world. It's take a good while to knock them off their perch I'm afraid, but brick by brick, we can dismantle them!

I understand your point, but the adidas deal with the Shite just doesn't stack up purely on shirt sales. It's one of the reasons Nike pulled the plug.

The Shite sell 1.4m shirts a season. Let's say they're £50 a pop, that's only £70m turnover. That's before you've taken manufacturing, shipping, retailers margin and taxes out.

adidas are paying them £75m a year, there's absolutely no way that is profitable from a purely shirt sales point of view. They are paying a premium for the brand exposure The Shite gives them in the far east, and so they can say they've got a bigger dick than Nike.

I agree, I raised the same question somewhere else on the forum about how those figures add up.
Obviously it's not JUST shirt sales, so we need to be careful of that, it's lots of other merchandise too.... posters, sportswear, bags, and probably use of player images on general Adidas advertising, but still, it's very hard to see where any substantial profit is coming from.

Adidas CLAIM they can make 1.5 billion from the deal overall. IF that's the case, you can bet your arse that Real Madrid will be on the phone to them wanting to have a little chat at how Adidas claimed (probably) they could only make half that with Real.

The way Adidas are spinning it, it's not even a 'tight' return... it's double! I just can't quite believe it to be honest.

Adidas are also sponsors of UEFA, shareholders in Bayern, and MAJOR sponsors of FIFA. How can that really be impartial? They will want United in the CL and are they going to keep their mouth shut about UEFA decisions at meetings? I doubt it.

Actually the adidas deal is smaller in scope than the current Nike one. The adidas deal is for licence to make the kit only. The Shite now own the rights to all other merchandising. There was a guy on Sky talking about it.

 

[Neville Kneville]

Utd & Liverpool's fanbases were originally built at a time when football exposure & marketing were minimal. As it got bigger, Utd's fanbase grew enormously. We are fast tracking into that at a rate never before seen.

Comparing it with past decades is meaningless. It's the rate of growth now that matters.

 

[svennis pennis]

Loving all the wannabe accountants and marketing experts on here.

Chill out and leave it to the people who have guided us win two league titles in 3 seasons.

 

[Shaelumstash]

Agreed, but they are still reluctant to 'miss out' on any potential video return.

Once this approaches viability they as businessmen can sell out this potential and let others wait for the return it will no doubt contain or am I being naive in understanding the way business works ?

I'm not saying the Glazier's won't sell but it's unlikely. They have a very highly leveraged business; which still makes them millions per year. I.e. the business pays the interest on its leveraged borrowings, it makes a healthy profit and they get to take millions out of the business annually. For the Glaziers in the short term, that's as good as it gets. Therefore the only way that they would sell is if someone offered them a huge multiple of its value - but another investor will only offer a sizeable multiple - if they can be sure to grow the business and increase revenues etc. Unlike most other takeovers and acquisitions - Football clubs are stand alone institutions with little or no opportunity for savings from a merger of activities operations. Personally, I very much doubt anyone could increase the earnings of Man United over the next 10 years - in fact I think a number of their sponsors have overpaid - including Adidas and Chevrolet. You have to ask why Nike who were closer to the kit deal than anyone didn't think the numbers worked even with significantly lower figures.

As far as I can see there's basically a few decent (if unlikely) reasons to sell:

1) A company believes they can make more money out of the club than you can, and thus offers you what you're already making plus a little more... (but less than the extra they can make). So let's say you make 100 million from a club, and the potential buyers reckon they can make 120 million out of it, they can purchase it from you for 110, giving you a bigger profit than you'd normally get, plus still making money for the new buyers.
This only works if they CAN make more money out of the club though, and United are probably being very well squeezed / run already.

2) A buyer has more faith in the long term future of the club than the current owners.
If the current owners start thinking the future is looking a bit more risky than they are comfortable with, a buyer might offer to buy the club at an attractive price that's not far short of that the current owners HOPED to make from them, but removing all the risk. Of course, the buyer's faith needs to be justified.

3) The current owners needs the money!
The classic situation. For whatever reason - sometimes, things go pear shaped elsewhere, and it means the owner needs to sell. It's not impossible that such a situation could happen with the Glazers.
Sometimes it might not be a distress sale either... it might simply be that they need 1 billion for a BETTER investment elsewhere. If that happens, they either borrow another billion and have both investments running, or they shift the United investment. Shifting their investment isn't so far fetched.

There is no way in a million years that the Glazers are even considering selling. They are increasing turnover at an exponential rate, and while costs are going up, they are going up at a much slower rate than turnover.

It's like they've bought a house on an interest only deal and found a massive oil well in the back garden, why would you sell it?

 

[Deleted member 58678]

Loving all the wannabe accountants and marketing experts on here.

Chill out and leave it to the people who have guided us win two league titles in 3 seasons.

On that note let's lock all threads and just leave the lot to them ;)

 

[SilverFox2]

Perhaps they feel they can have their cake and eat it because FFP is designed to stop the MCFC and PSG route so the only way an elite Club can be owned is by paying top whack for its 'cash cow' value.

Available cash is not a problem in this case so maybe the Galzers want an Arab oil rich family to buy it outright with no work to do. Little investment potential for the buyer but what a Trophy for the owner who usually buys the biggest diamond in the world just because he can.

After all, if you can't beat them why not join them.

 

[FanchesterCity]

Utd & Liverpool's fanbases were originally built at a time when football exposure & marketing were minimal. As it got bigger, Utd's fanbase grew enormously. We are fast tracking into that at a rate never before seen.

Comparing it with past decades is meaningless. It's the rate of growth now that matters.

Not really.
If Accrington Stanley double their fan base from 100 to 200, Adidas won't be all over them like a rash even though their growth is 100% !!!

If United have 100 million fans, and don't increase it by a single fan (growth rate of 0) that's still 100 million potential shirt buyers. Of course, certain ages tend to buy particular types of merchandise etc, but the growth rate doesn't mean all that much, unless you take into account how that rate manifests itself in real hard number of customers.

 

[FanchesterCity]

It's a forum.... we are just discussing thoughts and opinions.

Most of us aren't footballers, or managers or coaches either, but we still have an opinion on that.

If we just sat back and left it to the experts, there wouldn't really be a forum.

Besides, we ARE leaving it to the experts. Nothing we say on here is actually going to change anything is it? We know what it is - it's passing time talking a subject we like.

However, there's a very mixed range of people on here. Some of whom ARE advertisers, lawyers, accountants, coaches, physics and more... their contribution can make for interesting reading.