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Last Updated: Monday, 7 February, 2005, 10:00 GMT
Why is Man United a prize catch?
By Bill Wilson
BBC News Online business reporter

Sir Alex Ferguson on Manchester United's Chinese website
The Chinese way: Sir Alex Ferguson speaks to Asian fans on the website

US sports tycoon Malcolm Glazer has launched yet another attempt to buy Manchester United - but why does he think the UK football club is such a prize asset?

A lot of Manchester United's top scoring doesn't happen on the pitch.

Other global icons like Juventus, Real Madrid, AC Milan, and Barcelona have looked on with envy as the club has ventured into new markets around the world, including the US and Far East.

In 2004, the UK club was able to report a 6% rise in operating profits to 58.3m ($105m) - not including the cost of player transfers - thanks to strong sales of replica shirts and other merchandise.

It is this worldwide name which US billionaire Malcolm Glazer hopes to exploit even further.

As Harry Philip, managing director of consultancy Inner Circle Sports, points out, if US billionaire Malcolm Glazer bids for the club it must be because he feels he can make its operations even more profitable.

"We have got to assume that he feels he can do a better job and raise the revenue lines at the club by a significant amount," Mr Philip told BBC News Online.

"That would have to come from various different streams, include expanding merchandising and new media operations even further, and also by putting up ticket prices.

"He will also believe that TV and sponsorship revenues will continue to grow in the future, which would be a further attraction."

He said if Mr Glazer did take over the club he would bring a different US-style ticketing operation to Old Trafford.

"These guys in the US believe they can use stadiums better through a whole range of different ticket strategies, through the licensing of seats.

"They have much more sophisticated methods which might not sit well with your traditional British season-ticket holder."

Overseas tours

Whether Mr Glazer's bid is successful or not, Manchester United is already well-known in the US, having made two high-profile playing trips to the US in the past two years.

The tours have been part of the club's drive to reach an even-wider global audience, and turn "fans into customers".

We have a long-term strategy to connect with our fans - it is our biggest challenge over the next few years
Mark Goodfellow, Manchester United campaigns manager

This July, United are scheduled to tour the Far East, where they will play matches in China and Hong Kong.

"We are no different from any other club," Mark Goodfellow, Manchester United's campaigns and marketing manager told BBC News Online at the Euromoney European Football Finance Forum.

"We still have to find new revenue streams. We are always trying to build a relationship with our fans."

'Lifelong customers'

Mr Goodfellow said Manchester United had 75 million fans worldwide, with 23 million in Europe, 4.6 million in the Americas, 40.7 million in Asia, and a further 5.9 million in South Africa.

"We have fan loyalty, and in any other business that would mean we would have customers spending on a repeat basis.

"Someone can be a cradle-to-grave fan, but we will not necessarily have them spending anything with us.

"The question we are asking is how we build a relationship with the fans, and at the same time turn them into lifelong customers of the club?"

At home in the UK, the club has a four-year deal with sponsor Vodafone for 36m, and it has plans to expand its Old Trafford ground - boosting capacity and ticket receipts.

United has applied for planning permission to extend the ground by a further 7,800 seats, taking its total capacity to 75,600 by the start of the 2006/07 season.

However, as Mr Goodfellow points out: "Only a tiny minority of our supporters come to games at Old Trafford, so we have to go to them."

Fan database

He said this was being achieved through websites ManUtd.com, Mu.tv online, a Chinese language website, television station MUTV, and MU Mobile phones.

"Other ways we can reach our fan base is through our cafes, by people using our credit cards, and from others buying our products such as books, yearbooks, magazines, and a host of other items.

Paul Scholes in action against AC Milan in the US this summer
Manchester United have played clubs like AC Milan over in the US

"We have recently launched MU finance internationally, and are rolling that out, most recently into Malaysia."

The club "wants to know" about 3.5 million of its fans, as potential customers, across the world by 2005, and 6.7 million by 2007.

Mr Goodfellow said: "To do that, we want to build a single customer data base, set up an international address management system, and establish a means for capturing information online.

"We also want to come up with a way of managing 40 differing products and services across multiple channels."

Club cinema

The club's official partners have been chosen because of their global reach, such as their 13-year deal with US giant Nike for worldwide kit distribution. Nike also runs MU merchandising, and to run the club's soccer schools.

Aside from shirt sponsors Vodafone and kit manufacturers Nike, United has significant deals with eight companies.

And as well as its overseas operations, closer to home the club also offers travel and match break packages, and has its own cinema at Salford Quays.

"What we are doing at Manchester United can be done at any club," says Mr Goodfellow.

"We have a long-term strategy to connect with our fans - it is our biggest challenge over the next few years. We have still got a lot of work to do."




SEE ALSO:
Man Utd sees profits slide by 30%
27 Sep 04 |  Business
Gill hails Man Utd finances
23 Sep 04 |  Man Utd


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