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Wednesday, November 23, 2005 

Manchester United going through a rough patch

Manchester United is one of sport's most iconic brands. People the world over watch the team play week after week in the Premier League and in Europe. For long they have been the dominant team in England, winning the Premier League, the Champions League and making lots of money along the way. However, this year started from being a bit shaky to now downright teetering on the edge.

First, the Glazers from America bought the club for over 1.4 billion $, and loaded the club with a huge amount of debt in a very unpopular move among fans. Then, Chelsea have now taken a nearly unassailable lead in the Premier League, and look like runaway winners this season. Just few days ago, Roy Keane, their inspirational captain and midfield general suddenly quit. This shook Man Utd fans worldwide, and weakened their team considerably. Man Utd are currently struggling to qualify for the knock out stages of the Champions League after yesterday's 0-0 draw against Villareal. The financial fallout of failing to qualify is reportedly around 12 million GBP (through TV revenue, gate receipts etc).

The latest is that Vodafone have withdrawn their sponsorship of the club's shirt. The 4 year deal (36 million GBP, or 9 million GBP a year) was in the second year. Vodafone are apparently shifting their focus to Europe and the Champions League, where they should strike a sponsorship that includes content for their 3G services. The United Commercial Director was on telly saying that this is actually an opportunity for them to significantly raise the shirt sponsorship amount for the next deal. While this is true, it is very strange that they did not finalise on a deal before announcing Vodafone's withdrawal. Did Vodafone not give too much advance notice of their intention? if they did, it would have been great for Man Utd to announce a replacement brand at the same time, to reassure worried fans that atleast financially they are ok. Man Utd expect to get more than Chelsea did from Samsung (they raised 10 million GBP a year for 5 years), but given the team's current form, it will be a challenge for them. Sponsors may wait to see how Man Utd progress in Europe this year and in the EPL leaderboard before committing money.

Rooney is playing some brilliant football, but it seems like he is the only one pulling his weight for Manchester United, both on and off the field.

PS: This is crossposted on my new blog on sport business. That blog will exclusively contain posts related to the business of sport.

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