Liverpool and Manchester United: Owners in love
They’ve been exchanging glances that are less than saucy this season, but the owners know that Manchester United and Liverpool need each other more than they need their hardcore supporters.
One day the mighty houses of Old Trafford and Anfield may be forced together to promote their joint agenda. Crazy talk, given recent events, but before you start twirling your finger round your temple, cast your mind back to Autumn last year when Liverpool were embroiled in a media shit storm entirely of their own making. No, this isn’t an article about that, it’s about money – foreign money, to be precise.
It was in October 2011 that Liverpool’s managing director, Ian Ayre, voiced his desire to scrap the Premier League’s collective bargaining agreement on foreign TV rights: if Real Madrid and Barcelona negotiate their own contracts, English clubs should too. His views were immediately condemned as blatant greed that would destroy the competitive framework of the league (fans who’d seen their clubs face financial ruin following brief stints in the Premier League might detect a hint of irony in this stance).
In allowing Ayre to put down a marker, Anfield’s new rulers – the Fenway Sports Group – had displayed their intent. One of the most appealing factors in buying Liverpool must have been their global popularity. Other than Manchester United, no other English club boasts such a profile. Given that Liverpool’s new owners have already invested heavily, it seems likely they plan to capitalise on the strength of the brand as aggressively as possible if they intend to see a return on their investment at some point. And let’s be realistic, they didn’t buy Liverpool for fun, just like the Glazers aren’t into Manchester United for the prestige.
Ah, those loveable Glazers and their portfolio of loss making shopping malls. Often the pacesetter when it comes to matters of commerce, United were relatively quiet around the time of Ayre’s remarks. That’s probably because they know such statements attract opprobrium. Privately, however, they must have been encouraged to hear another club endorsing a policy that would deliver truck loads of cash. United talk about their commitment to collective bargaining for the Premier League’s broadcasting deal, but given the results of the Deloitte football money league published last week, it would be naive to assume this doesn’t form part of the long-term strategy in the Old Trafford board room.
For clubs with the global reach of Liverpool and Manchester United, foreign TV rights are an untapped oil field. Deloitte’s analysis reveals a widening gap between third placed Manchester United and Real Madrid (first) and Barcelona (second). This matters because the largest European clubs are in direct competition for revenue and for players. Marketing tours of the top English, Spanish and Italian clubs have become a fixture of every pre-season.
It also matters because last year Forbes ranked Manchester United as the world’s most valuable sports team, above both Spanish giants and the biggest names in American sports, such as the Dallas Cowboys and New York Yankees. The reason Forbes value United so highly is because of their global reach, with an estimated 333 million supporters worldwide. For us, this results in a paradox: United are worth a fortune, but increasingly financially handicapped. Anybody can see that United’s spending power has diminished.
Deloitte’s figures reveal Chelsea have spent £64 million on hiring and firing managers in the past four seasons, more than United’s net spend on transfer fees during the same period. Let’s assume the immediate problem of the Glazers’ debt isn’t going away any time soon, the only way United can give their transfer budget a massive shot in the arm is to take greater control of broadcast rights. They’ve tried tapping other sources of income. There’s little left at Old Trafford that doesn’t already have a sponsor’s logo on it, bar the players’ foreheads.
United have already established contracts in numerous foreign markets to show pre-match coverage and ‘exclusive’ interviews (ground staff, cleaners, and occasionally, Alex Ferguson). Live broadcasts of first team matches is the only thing missing.
Maybe United’s owners are happy to share the spoils with Wigan and Bolton. Maybe they think Liverpool’s plans are selfish and undesirable. Don’t kid yourself. If this trend continues then don’t expect United to stay quiet for long. Richard Scudamore is quick to proclaim the Premier League as the most successfully marketed domestic football competition in the world. But, if you’ve watched the Premier League abroad, you’ll notice that that it’s heavily promoted on the availability of its star assets: Manchester United and Liverpool.
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