Man United could strike £500m deal that would blow Barcelona and Tottenham out of the water

   2024-07-07 06:07

Sir Jim Ratcliffe has already been pretty clear about his disdain for the Premier League’s financial controls that are in place.



Having acquired a 27.7% minority stake in Manchester United at the start of the year, the deal seeing the Glazer family cede power when it came to decision-making regarding football matters and what happens with Old Trafford, Ratcliffe has been forthright in his opinions.

In a recent interview with Bloomberg, Ratcliffe expressed his concern that the Premier League’s approach to financial regulation could be detrimental to the health of the competition, which is the world’s most watched and popular domestic football league, in the long term.

Ratcliffe said: “The Premier League is probably the most successful sporting league in the world, certainly the most successful football league in the world. And we have this expression in northern England: ‘If it ain’t broke, don’t fix it.’

“If you start interfering too much, bringing too much regulation in, then you finish up with the Manchester City issue, you finish up with the Everton issue, you finish up with the Nottingham Forest issue – on and on and on. If you’re not careful the Premier League is going to finish up spending more time in court than it is thinking about what’s good for the league. We have got the best league in the world, don’t ruin that league for heaven’s sake.”

ALSO READ: United to consider renaming Old Trafford if they build £2bn new stadium

ALSO READ: Ronaldo got it wrong with his last United comment – but so did his teammates

British billionaire Ratcliffe is a man of huge resources, his wealth amassed from his successful chemicals company Ineos. He also knows the global pull of Manchester United. He will also know how the club needs to change and evolve in the coming years to remain globally relevant, and core to that is getting a new stadium off the ground, or redeveloping the tired and ageing Old Trafford into a world-class venue.

That work needs to be paid for, though, and at a time of high interest rates and material costs, it won’t be a cheap project to undertake, and at the same time the club will be required to keep spending and be competitive at the right end of the Premier League in order to keep the lucrative sums coming in and the brand strength high.

Last week, a report in The Athletic claimed that Manchester United were considering selling the naming rights to a revamped Old Trafford or a new build, something that would mark a major departure from tradition for the club that has never had such a commercial partnership.

But they can be enormously valuable. Stadia in North American sport has been able to sell naming rights of 10 years plus to firms for £500m and more, and at a time when United will need a large chunk of capital they will likely want to mitigate the amount of debt they will have to burden themselves with. The report claimed that it could be that Ineos themselves take on the debt burden of any such deal given the already mammoth £650m-plus in debt that sits on the Manchester United balance sheet.

In Spain, Barcelona were willing to risk wrath when they sold the naming rights for the Nou Camp to streaming giant Spotify. That deal could have been worth more had it not been for the fact that Barcelona had limited data on their fans, something that Spotify put a great deal of focus on and that damaged the overall value.

There is no doubt that Manchester United could command an enormous sum from a potential naming rights partner given their status as one of the biggest and most recognisable brands in global sport, and a time when the sport is increasingly globalised and reach extends into territories such as the US that now have a huge interest in the game of ‘soccer’, with the Premier League’s US TV deal making up 20% of all global broadcast revenue for the most recent cycle.

Naming rights is, along with raising ticket prices, one of a number of avenues Ratcliffe and United’s hierarchy are reportedly considering, and there will likely be resistance to both, the first due to the break from tradition.

Tottenham Hotspur’s 2019 move to a new purpose-built stadium on the site of their old White Hart Lane ground saw them take residence on one of European football’s most state of the art venues.

With a build that cost some £1.2bn plus, with £800m worth of debt still existing on the balance sheet as a result, the club looked into stadium naming rights early. Links with potential partners such as Google were mentioned but given Spurs chairman Daniel Levy’s notoriety for getting a good deal, the club are understood to be holding firm on what they believe the value of such a sponsorship space should be.

Levy has also previously talked about the potential value of not handing over stadium naming rights to a firm, instead keeping the Tottenham Hotspur Stadium name, something that could be impactful in growing markets, especially given that the stadium hosts NFL regular season games annually.

But the US market is not the UK market, and Ratcliffe and United will have to be well aware of that should they press ahead and try to find a partner.

In 2019, financial firm SoFi acquired the naming rights to the home stadium of the Los Angeles Rams, and Los Angeles Chargers in a mammoth $600m-plus, 20-year deal. In 2021, Crypto.com paid $700m to take over the naming rights of what was once known as the Staples Center, the home of the Los Angeles Lakers and Los Angeles Kings. In 2024 the Los Angeles Clippers will open a new purpose-built arena in Inglewood, the rights for that have already been sold to Intuit for $500m.

Los Angeles sits in California, a state with a bigger GDP than France, India, Italy, and Brazil. It is home to some of the biggest firms in the world, firms that generate billions upon billions of dollars in revenue each year.

There is a trend in the US for major local firms to be the ones to take up the stadium rights. In the absence of front-of-shirt sponsorship opportunities across major North American leagues, although small jersey sponsorship patches are now permitted, and with the in-stadium branding fairly clean in US sport, stadium naming rights have a significant pull.

Speaking to the Bottom Line earlier this year, Daniel Haddad, head of commercial strategy at global sports agency Octagon, explained: “It’s a completely different mark in the US, and I think one of the big mistakes that a lot of European clubs or sports entities make is actually trying to draw a comparison on the value of a stadium naming rights deal in the US and trying to translate it into what that could mean in Europe.

“Essentially, the key difference is that if you look at traditionally how sports teams are able to sell their assets in the US, they don’t have to share, they don’t have the kind of other highly visible points of entry.

“The market in the US is almost kind of trying to accommodate those with jersey patches, etc. But it’s always been in the US that stadium naming rights is the top-tier asset in terms of brand recognition and exposure.

“There isn’t the same extent of field signage in the US. If you watch an NFL game it is pretty much a clean environment from a stadium branding perspective.

“Obviously the model there is different and you get a lot of a lot more brands integrated in the broadcast spotlight as in sponsored segments on CBS or ESPN, but the actual playing environment is a lot cleaner.

“Crypto.com is actually one of the exceptions to this, but mostly stadium naming rights are purchased by a massive business located in that state. So, if you look at most of the stadium naming rights deals in the US, the corporation would usually be a US company with its headquarters in that state.

“The economies of these states can be massive. California is bigger than the UK economy, and in every state you have multiple businesses. The signature is billion-dollar revenue businesses that can afford that as a marketing expenditure. So, that’s why it’s a different market.

“The other thing to consider is that it’s always hard to sell a stadium naming rights deal outside of the US when it’s not a multi-purpose, 365-day-a-year venue.

“If you look at in the UK, for instance, even like the Co-Op Arena in Manchester, that was sold before it was constructed because that isn’t a football stadium with a limited number of home games where the brand is present and then competitions like the Champions League on the calendar, where there is limited reference to the stadium naming partner and branding is taken over by UEFA sponsors.”

A number of clubs have sold stadium naming rights, with Arsenal’s move away from Highbury seeing them enter into a long agreement with Emirates, while Manchester City has the Etihad Arena, Brentford has the Gtech Community Stadium, and Brighton & Hove Albion has the AMEX Stadium.

All were new builds, unbound from the traditions that stopped the selling of rights previously, while three of those four teams have alignment across major shirt sponsorship and stadium sponsorship, with Arsenal, Manchester City, and Brighton’s front-of-shirt sponsors the same as the stadium naming partner, limiting the dilution of rights and brand visibility.

Said Haddad: “For sponsors, you’ve got the 19 matches in the Premier League and then a domestic cup. There are no rights around the Champions League or Europa League.

“Let’s say, for example, that a club hosts games in the Euros or World Cup, the commercial rights don’t don’t apply. So actually, the frequency of exposure for brands in these areas is a bit more diluted than you might initially think.

“It’s why something more ubiquitous like a shirt deal is always there as commercial partners now how much value and exposure they are getting.”


Original Source