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Why this nonsense about hotels etc?

By Bruce Wayne :  25/08/2007 :  Comments (4) :
There has been a lot said recently by the anti-Kirkby camp about how the new stadium won't have hotels, casinos etc to bring in extra revenue on non-match days. This line of reasoning to me is unclear. What is clear is the difference in commercial income between ourselves and the likes of Liverpool. Things like prize money and TV income are expected because they are slightly more successful but I don't know that the difference in commercial income can be attributed to that same difference. Some maybe, but not all.

To get a better idea I thought I'd look into the figures for Man Utd. The last Annual Report I have is for the 2003 season so is slightly out of date due to their latest ground expansion. Nevertheless, it should provide a decent breakdown of their commercial income. Executive Boxes sell at a higher premium than regular tickets and generate an estimated £12.5M of revenue for the club. These tickets are good for all home league matches to be viewed.

Furthermore, Manchester United games held at Old Trafford sell very early, and about 50% of all tickets are executive boxes or season ticket holders. This means around half of the money for home games comes in before the season even starts. This creates a cash reservoir that Manchester United can use in order to manage the financial situation much more comfortably.

In addition, Manchester United has excellent conditions for its fans and fantastic catering facilities. The club prepares about 100,000 meals per match day, which generates close to £4M in revenue, not to mention on non-match days where the catering facilities are available that generate another £3M in revenue per year. In addition to that they get the following commercial revenue (also not related to any ancillary facilities).

  • Shirt sponsorship: £56M over 4 years
  • Merchandising deal with Nike: £303M over 13 years
  • Platinum Sponsors at £1M a year each (Platinum sponsors including PepsiCo and Anheuser-Busch pay the club up to £1M per year for four years. United has also worked with PepsiCo on joint promotions in Southeast Asia, and with Anheuser-Busch, whose Budweiser has replaced Carling as the club's official beer. These key sponsors not only get to be exclusive providers to Manchester United within its stadium, but hope to leverage the value of the Manchester United brand with its fan base. The current platinum sponsors are: Vodafone, Nike, Centaury Radio (a Manchester radio station), Budweiser, Ladbrooks (a British betting company), Fuji Film (a imaging company), Pepsi, Schick (a male grooming company), Audi and Air Asia.)
  • 125,000 credit card users
  • 200,000 museum visits per year (₤9.50 adult, ₤6.50 discount, or ₤27 family ticket
In addition, Manchester United operates its ManUnited Soccer Schools in the United Kingdom and worldwide. It plans to run 39 2-day camps in various locations across UK. The club charges ₤29 or ₤49 for a 1 or 2 days, respectively. ManUnited will hold four team, two goalkeepers, and one girls-only residential camp in 2006. The cost of these training camps ranges between ₤399 and ₤495 per player. Also, ManUnited Soccer Schools conducted its first camp tour of the United States in 2004. It attracted over 600 youngsters to attend its training camps. The soccer schools may not only help in popularizing ManUnited worldwide, but also generate an additional source of revenue for the club.

Then we have income from overseas, which I suspect is where we can really improve. Manchester United realizes more revenue from fans in Asia (£16.6M) than in the United Kingdom and Ireland (£11.1M). Approximately 90% of the merchandising business comes out of the United Kingdom. This just shows that there is a lot of room for branding elsewhere other than the United Kingdom. In 2004-05, revenue from international tours and friendly matches totaled ?22.9M (£15.5M), driven mainly by a pre-season tour to China, Japan and Thailand.

The One United scheme aims to tap into the some 40 million fans the club is said to have worldwide. To become a member, an adult person has to pay ₤26 while a youth membership costs ₤16 per season. Six months after its opening, ?One United? already had around 125,000 members injecting money into Manchester United.

So you can see that there is a whole lot we can do as a club that has far more potential than some crappy three star hotel. By using such facilities (or lack thereof) as a reason why the club shouldn't move is at best a red herring and at worst deliberately misleading.

Reader Comments

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Matt Willey
1   Posted 27/08/2007 at 00:43:16

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Hi Batman,

I find your article somewhat contradictory since there is nothing described that cannot already be done... there is no ’location dependency’ factor to the activites you have described... save the corporate hospitality; but we all know that the core Everton support are hardly the ’prawn sandwich brigade’.

The suggestion that Liverpool et al.. are only, and I quote.. ’slightly’ ..more successful than us is indicative of wishful thinking and I recommend a hard-dose of reality... or some time-travel back to 1985... fact is that since Sky invented football we have been slogging about with the also-rans and, even after a period of stabiliity; we will struggle to get within 20 points of them over the course of a season... our only hope is for spectacular management of Everton and/or spectacular mismanagement of the shite..

Still, with the fat waiter in charge this might be possible :-)
Kevin Sparke
2   Posted 27/08/2007 at 08:20:05

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’The club prepares about 100,000 meals per match day’

Given that their maximum attendence is 76,000 ... who eats the other 24,000 meals?

Bruce Wayne
3   Posted 27/08/2007 at 09:05:51

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To Matt,

That was kind of my point. There has been some articles recently suggesting that Kirkby isn’t a good move because it doesn’t provide us with room for ancillary facilities such as hotels and casinos, as though these things are going to be enough to send us into the big league.

My article attempted to show that for clubs with these facilities their contribution is minimal at best. I think Man Utd lose money on their hotel come to think of it and the Chelsea village hardly did much for Chelsea under Ken Bates.

I didn’t write to suggest the club was managed well in a commercial sense because I think there is much it can do to improve on its Butlin’esque style of commerce. All I wished to achieve was dispel this myth that Kirkby is a bad move because we won’t have an Everton hotel on site.
Tom Hughes
4   Posted 27/08/2007 at 10:18:48

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I’m not sure anyone has said that a hotel will be our saviour. However, there is potential for a hotel to be an enabling development to part fund build costs. The viability of a hotel is far more clear at a more central site. The city centre is the natural location of all such additional amenities. Try getting a hotel room in Liverpool this weekend..... or any other weekend for that matter. Apparently we are 7,000 rooms short of demand. City planners tell us there are hotel chains queuing up. Even Goodison can be an attractive proposition for such a development being only 2 miles from town and right next to the other place too. I don’t think London has a shortage of hotel beds in comparison..... so not sure about the Chelsea analogy. Being near town and the CBD will also make the stadium more attractive in terms of conference facilities.... and other year round useage.

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