Friday, 12 April 2013

United Continue FFP Preparation Strategy


Manchester United have joined rivals, Arsenal, in preparing for new Financial Fair Play (FFP) regulations after agreeing a deal to sell the naming rights of their training ground for a whopping £120m.

The deal breaks down to a £15m, eight-year agreement with current shirt sponsor AON to display the insurance firm’s name on training kits, pre-season tour campaigns and the name of United’s Carrington training facility.

For the pundits on Betfair, the move is seen as a clear effort to increase revenue streams before FFP kicks in, for United may struggle to live within their means unless more income is generated through sponsorship and merchandising.

Much like Arsenal, the club lives off its own back and is aware the FFP rules could cut their spending if the books aren’t balanced. The Gunners run a tight ship, have paid off the cost of their £390m Emirates Stadium and, with over £3m of revenue coming in each home game, they are starting to make money in football.

They recently signed a new £150m sponsorship agreement with Emirates until 2019 – bagging them a cool £30m a year from this one source alone.

That kind of deal is what United have also begun to strike and with the fans reluctant to see Old Trafford change its name, Carrington is the next best thing.

Although United’s debt is theoretically safe – locked as it is with current owners, the Glazers – any addition to the club’s income makes strong financial sense and selling rights to training facilities and kits is an impressive move.

They were the first club to sell training kit sponsorship in August 2011 when they signed a contract with DHL worth £40m for the privilege and with Chevrolet primed to begin its main shirt sponsorship in 2014 United’s income is only set to increase.

Unlike Premier League rivals, Manchester City and Chelsea – who may struggle to cope with FFP when their owners cannot simply pump money into the club – United and Arsenal are doing the right thing in selling their assets for all they’re worth.

4 comments:

  1. Arsenal have not 'paid off' the cost of building the new stadium. They effectively have 20 years of 'mortgage' payments to make. Admittedly the extra revenue from the new stadium means that the $12 mill a year payments is more than manageable.

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  2. Man Utd have to do some hard work they are not getting that what they were they are losing their concentration

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