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Posts from the ‘Football Finance’ Category

Jul 4

US of A

To be quite honest, I’m spoilt for choice today, on football finance stories to mull over.  What with Rangers omission from the SPL etc.

However, I want to reflect on the happenings at Manchester United, perhaps coincidentally this American Day of Independence. Today actually means more to me as it’s my Father-in-Law’s birthday, Necati Kur (pictured). Those of you that know me or read my posts are aware of my contractual allegiance to the FC United of Manchester rather than its ‘big brother’. This team formed in reaction to dissatisfaction with the affairs surrounding the American businessmen, ‘The Glazers’’ takeover. 

Late last night, and so mainly aired today, ‘Man U’ announced that it would seek to raise circa $60M via the New York Stock Exchange.

MUST (Manchester United Supporters Trust) has commented: “Until we have more detail it is impossible to say with certainty what this will mean for Manchester United or its supporters. However, from the initial information we have it appears that the new A shares on offer will be inferior to the Glazers’ own B shares as they will carry only 1/10 of the voting rights. Furthermore the preliminary filing appears to indicate they will not be paying dividends either. So a minority shareholding with inferior voting rights and no dividends is going to severely impact on the attraction to both financial and supporter investors.  However if it turns out that the vast majority of the proceeds are used to pay off the debt that is certainly something MUST would welcome and entirely vindicates our longstanding position that their debt was damaging our club.”

The Barclays Premier League’s Club filed documents with the United States Government’s Securities and Exchange Commission yesterday. Man U would use the money raised from the flotation to reduce its substantial (some might argue unsustainable) debts.

This latest tactical move by The Glazer’s hierarchy, is hot on the heels of the $1Bn (£640M) flotation tried last year via Singapore’s equivalent stock market.  The plug was pulled on that due to the volatility of the World’s economy.

The BBC reported that: “The Glazers borrowed large sums of money to buy the Club and the interest payments on this debt are onerous. In 2010, the owners converted these loans into a bond in order to reduce the interest, but analysts say the share sale demonstrates how the club remains weighed down by its heavy debts, despite its huge global fan base and promotional and marketing efforts. The Club currently owes £423M”.

Playing financial-football with a global brand?

Jul 1

Abject marketing

I’ve ‘banged the drum’ for sometime about the inadequacies of marketing and commercial activities at many a lower league operation.  It was interesting to note this Week, Marketing Week’s article that suggested: “Football clubs have earned billions from sponsorship and broadcast rights but their approach to marketing is often as abject as England’s performance against Italy.”

Next Year is the 20th anniversary of the Premier League. Since BSkyB’s deals injected large sums into the game through broadcast rights, English football has changed.  But in my opinion, some still accept this as the status quo without any contingency should the deal be removed from the table.  Unlikely, maybe just yet, unless a rival bids (thus, monies remain) – but there were debates on the Scottish game with a refusal of New Rangers FC’s admission in to the SPL or even a move South of the border.  How quick would a return to the predicament of clubs post ITV Digital’s demise be seen?

Reliant on BSkyB, stadiums, ticketing, corporate boxes and especially players’ wages have spiraled. Even some of the “big boys” have seen some income reductions resorting to new tactics and territories.  I’ve just been offered a Contract with one to prospect and negotiate deals in a Middle Eastern terrain.

Despite the economy the call upon pockets of the fan-base will not be restrained. New kits, new seasons. County’s ‘Mad Hatters’ pricing failed – and personally I didn’t find the compromise an attractive marketing proposition.  BSP fixtures tomorrow, new kit the week after.  Hope it’s not along the 1883 leisure brand launched as casual wear.  Understand the reasoning but it could have been better IMVHO.  Why not listen to all fans – although a couple of branding novelties may have a role in modern day offerings.  What did you think? (1) Refreshing the Oldham Athletic badge for commercial propositions (2) a ‘real’ line for the Liverpool 3rd kit as Warrior clothing stamps its’ mark.

Jun 4

Brand football

The power of football in marketing terms has never been underestimated.  This is echoed in the latest report by Brand Finance (World’s leading brand valuation consultancy).

One particular piece that caught my eye follows on from the financial turmoil of Rangers FC in Scotland.  Their counterpart in Glasgow, Celtic, have won recognition as one of the top 50 brands in the global game.  It is suggested that this same Club, could even challenge such as Manchester United, Arsenal, Bayern Munich, Barcelona and Real Madrid in the top 10 if they were to ever play fixtures in the English Premiership.  The Daily Record confirms: “Celtic have become the first Scottish club to feature in the 50 most valuable clubs in football after their brand increased by a massive 30 per cent in the past 12 months.”  Maybe I need another trip north of the Border to see what tactics my namesake and Marketing Director has been employing.

In the Report, clubs are given a credit rating between AAA to D and the worth of their brands are calculated on how much it would cost to license them from a third-party.  Celtic have a BBB+ rating and a brand value of $64M – £40.7M.

Apr 4

Stockport County FC: Edgeley Park Stadium

Stark reality

When “County” went down, I recall someone saying that this was the best thing that could happen to us.  We’d just bounce back was the rhetoric.  I rubbished the suggestion, pointing out that the BSP read like a graveyard of former ‘League’ teams: York, Cambridge, Luton, Grimsby etc.  If we were to remain in that Division in Season one that would be a result in my opinion, after a free-falling demise and so many woes – consolidation had to be the name of the game.

Facing the on-going reality, relegation brings with it reduced income. There is an immediate loss of the £250,000 Premier League solidarity payment;  TV revenue and sponsorship £430,000 is halved for one year and then goes all together; youth development funding of £180,000 a year is halved for two years and then gets removed.

 It’s a significant contrast from the generous parachute payments clubs relegated from the Premiership receive for three years. 

All this explains why the Centre of Excellence in its current guise is not sustainable – and why innovative ticketing regimes need to be piloted such as ‘mad hatter prices’ to boost attendances for forthcoming seasons including attracting ‘new blood’ (the fans of tomorrow) and deriving supplementary in-stadia secondary spend.

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