Sir Alexander Chapman “Alex” Ferguson, better known as Sir Alex, brought down the curtains on a glittering era of managerial success that saw his club, Manchester United, win 13 English league titles, two European Cups, five FA cups, four League cups along with the FIFA Club World Cup. Ferguson had been at the helm through the greater part of his 26 years in charge, an astonishing tenure in the English league considering that managers around him have been hired and fired impulsively by success-hungry owners. His long service in English football’s top tier is testimony to his enduring passion for the game and his ability to cope with the deeper pockets of rivals, combining his man management and mastery of tactics in addition to his insatiable desire to win.
Ferguson’s mastery lies in his ability to stay current on the latest training regimens and technology, while plotting strategy both for on-field play and organizational success. Sir Alex fostered a culture of success and dedication throughout the organization, from the team’s elite players to the workers who took care of Manchester United’s famous stadium and field. He instilled within everyone total commitment to winning. Fergie’s purpose was to make Manchester United the greatest football club in the world. Under Ferguson, United have done just that, growing into a global brand with more than 659 million followers around the world. Manchester United has created a relationship with its followers that is not merely transactional, but also one that inspires people to an aspiring journey with the promise of being part of something great.
As a business, United’s growth since the 1990’s has coincided with a huge surge in interest in the Premier League, both at home and abroad. English league football got itself lucrative new television deals initially in the early 90’s with the aid of Sky Broadcasting, smartened up its stadiums and became fashionable. And the diligent Ferguson did not miss a single beat when it came to the business of winning and building a brand. What he did very tactfully was to take the much-celebrated team and turn it into a global powerhouse. Regardless of the opponent, the club regularly sells out the largest stadium in England, aptly named the “Theater of Dreams”. It rakes in billions of dollars in broadcast rights and sponsorship internationally. Income from TV rights, gate receipts and merchandise remains strong, providing broad revenue base that spreads risk better than most clubs manage to.
According to Deloitte, Manchester United’s revenue had grown to £320.3 million for the 2011/12 season, from £25.2 million since the first season of the English Premier League (1992/3 season). Dan Jones, partner in the Sports Business Group at Deloitte, rightly sums it up, “Manchester United has been transformed as a football club under the management of Sir Alex Ferguson”. At the end of last season, Manchester United were ranked second in The Forbes Fab 40 list of world’s most valuable sports brands, following the New York Yankees. They were valued at $293million, above the likes of Real Madrid, Barcelona, Bayern Munich and Arsenal.
United is a publicly traded company worth more than 3 billion in market value, owing to its commercial phenomenon. Sir Alex has been such an integral part of Manchester United that its shares fell by 3.5% to $18.10 in early trade in New York at the announcement of his retirement. Manchester United has huge and long-standing international appeal, with vast accumulated brand equity. It is the team’s accomplishments on the pitch and the commercial achievements in securing deals, which have built its brand value. The club’s popularity has allowed it to lure in sponsorship deals on which Sir Alex has always masterfully pounced, using the money to build squad after squad capable of winning titles.
Manchester United found new ways of raising revenue, developing international markets to sell their global brand. Sir Alex would undertake exhibition games and promotional tours on a global basis, expanding the overseas fan base. Over the last 5 years, they have played in diverse locations, such as Canada, China, Malaysia, Mexico, Nigeria, South Korea, Sweden and the US. Under Ferguson’s leadership, United have attained sponsorship deals with companies ranging from Indonesian tyre-manufacturers to a Japanese social gaming company.
The club reported a 52.2% increase in sponsorship revenue owing to domestic and international deals during this season’s third quarter results. Sir Alex’s long-term planning is witnessed with the sponsorship deals he acquired this year, for future years to come. The sustainable brand value means corporate houses find it lucrative to associate with the club and pen deals worth millions. A seven-year shirt sponsorship deal was agreed upon with U.S. car giant Chevrolet from next season, worth $559 million. In addition, an eight-year agreement with insurance firm Aon, worth around $230million, has been settled to brand the club’s training kit and attach its name to the Carrington training ground. These two corporate became just two of 36 companies that now sponsor Manchester United. With the stream of revenue pouring in, what this does is allow the club to bring in new players for the 2013/14 season in September, as they prepare to strengthen their squad and defend their domestic title and make another run for the European “holy grail”, the champions League.
The Man United brand and Sir Alex has always been intrinsically linked. The legacy of success – like that of former manager Sir Matt Busby – will never be lost. So what lies ahead for David Moyes, the newly appointed manager from next season? The manager’s footballing sense cannot be questioned with Sir Alex himself tipping him to be the successor. The question arises if he can fill in the rather big shoes of Fergie and handle United, the brand rather than just the football club.
For sponsors and supporters the truth is that no individual, not even Sir Alex, is bigger than the club and every manager will retire just as brilliant players have come and gone during his reign. The brand strength that Manchester United has built to extraordinary levels during the Ferguson years and the commercial success that has followed means the foundations for the future are as good as they can be. The soon-to-be former manager himself said, “It was important to me to leave an organization in the strongest possible shape and I believe I have done so”.
The future does not look as bleak as it may have at first, with Ferguson’s following announcement at retirement: “Going forward, I am delighted to take on the roles of both director and ambassador for the club.” One can almost be sure that despite stepping down from the managerial role, Fergie will have a tight leash on things. He may not partake in strategizing the games but he will definitely run the commercial aspect of United as smoothly as he has done through the years.
Ultimately, success coupled with its portfolio of famous players, will help sustain the brand of United. Ferguson’s success ensures that Manchester United will thrive without him, if not to the same extent. Moyes will be embarking on a new era, but one forever indebted to the last one. As the United fans are saying, “From one Scot to another, the Legacy continues…”
