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.
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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