Manchester United & The Importance of Business Acumen in Football

Manchester United & The Importance of Business Acumen in Football

“You don’t spend £50 million on someone that you’re never going to play” remarked Julien Laurens when speaking on The Totally Football Show about Fabinho’s gradual integration into Liverpool’s first team. “Unless you’re Man United” quipped James Richardson in reply, to which the panel sniggered and jeered in agreement.

How the mighty have fallen.

The days of Sir Alex Ferguson posing an ominous figure on the touchline tapping away at his watch with sweeping attacking football and visiting teams fearing the fortress that was Old Trafford,  dubbed the Theatre of Dreams, are now a fading memory.

The 2018 Forbes Rich List valued Manchester United as the wealthiest club in world football with a value of $4.12 billion and a revenue of $737 million. Juventus, by comparison, sat ninth on the list with a valuation of $1.47 billion and revenue of $442 million.

The disparity between the two teams, from a financial perspective, when they faced one another a few weeks ago in the Champions League should have been clear. It was, just not as a business analyst would expect.

Manchester United’s were humbled 1-0 by a far superior Juventus side, perhaps the most one-sided fixture ever bearing the same result. Ironically, in the build-up to Halloween, the Old Lady was the one terrorising the Red Devils.

Historically, in football, the teams that spend the most win their respective leagues. The Bundesliga, Serie A and Ligue Un have all seen domestic dynasties for the best part of the last decade.

There are of course exceptions to the rule, most notably Leicester City’s Premier League Triumph in 2015/16, with a wage bill of £80 million. Whereas Manchester United in that same year boasted a wage bill of a staggering £232 million.

At this stage, we must ask ourselves what mistakes were made along the way to avoid their repetition.

Player Investment

The Italian champions gave insight to where the club could have been if certain moves were made differently in the past 5 years. Parallels can be drawn between the transfer activity of the two clubs with contrasts being seen in the results.

Each clubs’ record signing, Cristiano Ronaldo and Paul Pogba, were signed to have immediate impacts. Pogba is a world cup winner and a fantastic footballer, on his day. However, those days are sometimes marred by small lapses in concentration which prove to be costly such as his lack of tracking of Antonio Rudiger for Chelsea’s opening goal at Stamford Bridge at the weekend and giving the ball away cheaply against Wolves leading to the equaliser at Old Trafford earlier in the season.

Ronaldo, although a completely different player, operating in a different phase of play, provides the same moments of awe that the Frenchman can, without the callousness on the ball. At no stage does the Portuguese feel like a liability. Can the same be said about United’s talisman?

Both clubs were able to pinch talent from their domestic rivals with Juve’s purchase of Federico Bernadeschi and United’s trade for Alexis Sanchez. Bernadeschi has made huge strides forward as a mainstay in the Turin giants starting eleven, whereas Sanchez did not even make the bench on Tuesday night. Astonishing when the financial outlay on the Chilean is considered, with The Express reporting the figure to be £500,000 a week.

The Old Lady has a tradition of seizing high profile free transfers with the likes of Sami Khedira, Dani Alves and Emre Can coming through the door in recent seasons, a concept as foreign to Manchester United as staying out of the media limelight.

Business Model

Executive Vice Chairman Ed Woodward can burden some of the blame for the sometimes-farcical nature in which the club is run. The clubs transfer strategy has been wildly erratic without the guidance of the great Scot.

From the outside looking in, the players targeted seem to be simply the largest names in the game with no thought being given to how they would fare in the now cold Trafford environment.

Extending Jose Mourinho’s contract in January, only to show no interest in backing him the summer transfer market may be a sign that the board has lost faith in him after spending £389 million, per transfermarkt.com.

The three managers since their title triumph of 2013 have not had a consistent plan, and as a result, the squad looks imbalanced towards the attacking end. The blue half of Manchester have shown that having a coherent business model can achieve, as they overhauled their entire system from academy to the first team.

Under Jurgen Klopp, the Liverpool organisation have shown the effectiveness of investing wisely and adhering to a defined strategy. Perhaps by avoiding the mistakes of their great rivals, they can emulate their past success.