In a May, 2018 conference call with investors, Ed Woodward uttered the now-infamous line: “playing performance doesn’t really have a meaningful impact on what we do on the commercial side of the business.” At the time, Woodward had already cut an unpopular figure with the Manchester United faithful, but the public release of that comment was the moment that established the former accountant as the primary recipient of blame for the club’s recent failures. Even more vexing for supporters was the sense that he was right, too.
Woodward had orchestrated the most lucrative kit and sponsorship deals in all of sport with Adidas and Chevrolet respectively, and had overseen consistent economic growth, culminating in record revenues of £627 million in 2018/19 despite enduring a turbulent season, to say the least. When taken at face value that figure is quite impressive, yet in reality it is deceptive and distorts the actual state of the club. The recent announcements that Chevrolet will not be renewing its deal and that Kevin Glazer converted his class B shares into class A stock — all but revealing he intends to sell his 13% stake — however, are bombshell indications that the results are finally catching up to Woodward.
A story first published by Tifo Football showed that Manchester United’s revenue could be broken down into three sources: match day, commercial, and broadcast. This past year United generated £111 million on match days, or about 18% of total income. This segment is a factor of ticket rates and tickets sold, and with consistent sellouts and frozen prices, revenues here understandably have remained stable since Woodward took over in 2013.
Manchester United’s commercial revenues sat at £152 million in David Gill’s final year, and have since grown substantially, peaking at £276 million under Woodward. Commercial revenues for the 2018/19 fiscal year were £275 million, falling for the first time since the current CEO took charge. The aforementioned Adidas and Chevrolet deals make up a large portion of that sum, and their uncertain future contributions are highly concerning. It’s worth noting, too, that commercial income rose significantly between 1995 and 2004 as well, revealing a pre-established momentum in this segment correlated to one of the most successful periods in club history.
With match day and commercial revenues stagnating, a rise in broadcast income from £204 million to £241 million was the driving factor behind the record-setting return. Again, the sheer numbers are misleading, though, and do not tell the whole story. United were back in the Champions League and were beneficiaries of the competition’s new television deal. In contrast, the club’s sixth place finish domestically saw them suffer £7 million in losses compared to 2017/18 when they ended the campaign in second. Lastly, and possibly most damning, is the footnote subtly concealing the club’s expectation that 2020 revenues will take a major hit and realize between £560 million and £580 million.
United currently sit 13th in the Premier League, and have their worst start to a league campaign in 30 years. Woodward has done his best lately to convey a positive message to the fans, but the unsurprising and inevitable trend of poor football negatively affecting the commercial strength a football club is leaving him with nowhere to hide. As a businessman, Woodward certainly understands the serious implications of financial losses and knows that his job security depends on success in this department. As such, United supporters can only hope he begins taking football success into account now, too.