Football expert warns of club collapse

Manchester United is cutting its merchandising staff

A leading football economics expert has warned many clubs will go the way of dot.com companies this year.

It follows an announcement by Manchester United, the world's richest club, that they intend to lay off half their merchandising staff over the next year. A total of 48 people will lose their jobs.

Professor Tom Cannon, the author of Football Management and Floatations, and an advisor to the Everton board, says clubs are beginning to pay the price for what he called "overkill and greed."

The 1990s were a boom time for Premiership clubs, but Prof Cannon said the time when replica shirts were a fashion accessory has passed, and anticipates a 10% to 15% decrease in merchandising revenue this year.

The bubble has burst as far as merchandising is concerned

Professor Tom Cannon

He told BBC Radio 5Live: "When Manchester United sneezes, the rest of the Premiership catches a cold.

"Manchester United has misjudged the mood of the fans, but a lot of other clubs have done so too.

"The bubble has burst as far as merchandising is concerned. People are not desperate to be associated with their clubs anymore," Prof Cannon said.

"We got the first signs last year with merchandising income down by 5%.

"It looks like it is going to be down this year by 10% to 15% with some clubs taking a bigger hit than others."

'Fall in income'

Manchester United's merchandising operations generated revenues of £20.1m in the year to 31 July, producing a profit of £2.1m.

Nevertheless, the club intends to franchise out its merchandising operations around the world.

Professor Cannon believes the lay-offs are happening because Manchester United has not broken the huge Asian market.

"The big killings they hoped for have not happened and won't happen in Asia," he said.

Peter Kenyon, chief executive of Manchester United, admitted it was a "difficult decision to make".

He added: "The restructuring of merchandising is designed to ensure the business is best placed to meet the challenges of the future.

Manchester United chief executive Peter Kenyon: A difficult decision

"Every effort will be made to find alternative employment for those whose positions are withdrawn in the restructuring."

Professor Cannon said he also anticipates a fall in income from gate receipts.

"I think a lot of football clubs will go the way of dot.coms last year," he said.

"It is overkill and greed with players asking for too much money."

Manchester United are by far Britain's richest club with an estimated income last year of £110m and profits of almost £17m for the last financial year.

They have been repeatedly criticised by parents for the amount of times they have changed their kit.

The club has had 14 strips since the start of the Premiership in 1992.