Manchester United announced club-record revenue for 2018/19 this week, but they face the potential of losing out on a significant amount of their sponsorship money from their adidas deal if they fail to qualify for the Champions League again this season.
The Red Devils’ revenue for the year ending June 30, 2019 was up 6.3 percent from 12 months ago, raking the club in £627.1m. However, it’s not all good news, with the club’s on-pitch troubles – and particularly their failure to qualify for the Champions League – set to see their revenue significantly drop over the next financial year, with worse to come if they fail to qualify again with heavy sponsorship revenue loss from adidas.
In 2015 United signed a 10-year deal with kit suppliers adidas that earns them £75m a season. But should they fail to qualify for the Champions League in consecutive season, a penalty clause will be invoked that will see adidas' payment as part of the £750m deal fall by 31 per cent. As well as the brand sponsorship, there are other financial factors as to why securing elite European football is so important for the club, including being able to fully capitalise on UEFA's broadcasting revenue distribution system. So while United remain one of the richest club’s in world football, second only to Real Madrid, things must improve on the pitch if they are to maintain that status.
Under Ole Gunnar Solskjaer, the philosophy appears to be to once more place faith in the youth system, reverting to the ethos that brought success to the club during Ferguson’s reign. This is a long-term strategy that calls for patience. "The progress we've made on the business side underpins the continued investment in the football side,” explained Ed Woodward. “Much of the progress made around that investment in the academy, the recruitment department and the training ground facilities is behind the scenes and therefore isn't immediately apparent to those on the outside looking in.”
But as Gary Neville pointed out, there’s one key difference from this current set up and the class of ’92: “I've said many times that Alan Hansen was right, you don't win anything with kids. The Class of '92 didn't win that Premier League title. We had Steve Bruce, Gary Pallister, Roy Keane, Eric Cantona, Brian McClair and Peter Schmeichel. We had world-class performers and two of the best centre-backs ever.”
Manchester United clearly have the financial clout to go out into the transfer market and find what they need. But the worrying thing for fans is that they’ve been doing that for the last seven to eight years, spending around £900m with very little to now show for it. The latest forecast and the news of adidas’ clause should they fail to reach the Champions League again indicates that it’s not a sustainable approach.
