Manchester United's business model

Dear friends, according to Forbes, Manchester United is the fourth most valuable football team in the world, worth about $4.2 billion.

Top 5 Most Valuable Clubs

As one of the few publicly traded professional sports teams in the world, we deeply discuss how one of the most famous global brands monetizes their intellectual property rights.

Manchester United's finance can be divided into three categories:

before Covid-19 pandemic-commercial income accounted for about 44% of Manchester United's total income, while broadcasting and match-day income accounted for about 38% and 18% respectively.

In the field of business income, Manchester United monetizes its global brand in three main ways:

There is no doubt that sponsorship represents the largest business income. Manchester United has more than 2 "global partners" at any time, selling everything from airlines and hotel partners to wine, spirits and fuel partners.

The point is that no matter whether a category is directly related to the most popular sport in the world, global brands like Manchester United will benefit from this relationship.

Partners include

Earlier this year, the club signed a new major jersey sponsorship agreement with German software company TeamViewer. The deal officially replaced Chevrolet, which has existed since 214, and made TeamViewer the sixth jersey sponsor in the club's history.

It is reported that TeamViewer will pay Manchester United $325 million in the next five years, or $65 million a year. This is the second largest jersey sponsorship agreement in the world.

In a special year, Manchester United has brought about $24 million in sponsorship funds-accounting for more than 25% of the club's total income.

sponsorship income

apart from the rich source of sponsorship income, Manchester United has also monetized its world-renowned brands. They sell everything from T-shirts and sandals to coffee cups and bedspreads with Manchester United brand and trademark.

Retail and merchandise revenue

Good news: Commercial revenue has proved resilient throughout the COVID-19 pandemic. For example, although the game has been closed to fans for more than a year, Manchester United's business income has only dropped by about 5%.

Annual business income (income figures of specific categories are estimated according to the current currency exchange rate. )

Overall, business income accounts for 55% of Manchester United's revenue in 22, which is higher than usual.

In addition to the indirect global exposure of business partners, Manchester United also directly benefits from live content distribution through global media copyright transactions. They also have their own TV channel MUTV, which provides Manchester United programs to more than 56 countries and regions around the world.

Broadcasting revenue

Due to COVID-19, TV-related revenue has dropped significantly-by about 44% last year-but considering that their annual TV revenue only averaged over 1 million dollars a decade ago, the growth is still impressive.

please remember, according to the performance of Manchester United's first team, the broadcast revenue changes greatly year by year.

This is an interesting statistic: each game can accommodate more than 74, fans, and Old Trafford Stadium is the largest stadium in the Premier League. Even better, Manchester United's average attendance rate in the Premier League for 21 consecutive years reached 99%.

results? In a typical year, Matchday's income is close to $15 million.

match day income

The absence of fans due to COVID-19 exceeded the expected level. Nevertheless, with the lifting of restrictions and the return of global fans to the sports field, it is expected that pent-up demand will soon lead to the return of income to the pre-pandemic level.

We all know the statistics now: from 211 to 22, the average team value of NFL, NBA, NHL, MLB and Premier League increased by more than 5%.

Manchester United is no exception, with an estimated value of $1.8 billion in 21 increasing to $4.2 billion today.

Facts have proved that professional sports teams and leagues are high-quality and scarce assets with strong value and appreciation space. But after COVID-19, it will be interesting to see how clubs like Manchester United can further optimize their revenue sources to make up for the loss of profits.