THE NUMBER GAME

English Barclay Championship is perceived by fans, commentators and academics of football of being highly competitive and non-polarized, dominated by Manchester United, Chelsea and lately by Manchester City, with a significant number of other teams participating in the leagues. Out of the top 20 clubs having highest revenue in the year 2011/12, 7 of them are playing their traits in English Premier League.

There are a number of financial and non-financial methods that can be used to determine a club’s brand equity – including measures of attendance, fan-base, broadcast audience, or on-pitch success. Arsenal, Manchester United, Liverpool, Chelsea, Tottenham Hotspur  and Newcastle United are the 7 English premier league teams that are in the top 20 list in the list of ability to generate revenue from day to day football operations.

2011/12 represented a solid year in terms of revenue growth for the game’s elite clubs, with the top 20 League Clubs generating over $6.1 billion in 2011/12, a 10% increase on the previous year. Double digit percentage revenue growth in 2011/12 represents continued remarkably strong performance in these tough economic times. The sport’s top 20 revenue generating clubs now contribute over a quarter of the total revenues of the European football market and can be expected to generate close to $6.7 billion between them in 2012/13.

Top Three:                                               

1. Real Madrid:

Real Madrid tops the League rankings, matching the eight year hegemony that Manchester United enjoyed between 1996/97 and 2003/04, and is the first club to surpass the €500m revenue in a single year. Real has undoubtedly led the way in the phenomenal level of revenue growth enjoyed by the sport’s top clubs over the past two decades.

2. Barcelona:

FC Barcelona retain second place, maintaining a Spanish one-two in this position for the fourth successive year, whilst the top six clubs remain unchanged for a fifth successive year, emphasizing the fact that these clubs have some of the largest fan-bases and hence strongest revenues, in both domestic and international markets.

3. Manchester United:

Manchester United retain third place despite revenues declining by £11.1m (3%) to £320.3m  in a season which saw the club narrowly miss out on retaining their Premier League title as well as suffer early exits from the UEFA Champions League and FA Cup.

Other English Premier Clubs:

1. Chelsea:

Chelsea is placed at fifth position, with total revenue in 2011/12 increasing by £32.4m (14%) to £261m. This significant growth is largely down to the on-field successes of the season. 2011/12 will be remembered as the year Chelsea became the first London club to win the UEFA Champions League, overcoming Barcelona in the semi-finals and then defeating Bayern Munich in a dramatic penalty shoot-out in the final at the Allianz Arena. Chelsea made it a cup double in defeating Liverpool 2-1 in the FA Cup final. However, their cup form was not matched in the Premier League, finishing in a modest sixth place, their lowest League position for ten years.

2. Arsenal:

Arsenal’s revenue increased to £234.9m in 2011/12. It represented an £8.1m (4%) rise on the previous year. In their 125th anniversary season the Gunners experienced a similar level of on-pitch performance to the previous season. A late season rally helped the club finish in third position in the Premier League, with broadcast distributions remaining constant at £56.2m. As in 2010/11, the club exited the Champions League at the round of 16-stage with defeat to AC Milan, as a remarkable comeback fell just short. Arsenal is at the sixth position in the standings.

3. Manchester City:

City became English League Champions for the first time in 44 years after a dramatic climax to the Premier League season. However, their strong league form did not translate to the European stage and they failed to qualify from the group stages of the UEFA Champions League and were knocked out of the UEFA Europa League at the last 16 stage. Team’s revenue was €244m in 2011/12 and is behind Arsenal in the standing at seventh position.

4. Liverpool:

Liverpool is at ninth position in the standing and despite their absence from European competition for the first time since season 1999/00, recorded a £5.1m (3%) increase in revenues to £188.7m. Although the club won the Carling Cup and reached the FA Cup final, a disappointing eighth-place finish in the Premier League meant that 2011/12 was the third successive season in which Liverpool failed to qualify for the Champions League.

5. Tottenham Hotspur:

Tottenham Hotspur was at 13th position, with total revenue decreasing by £19.3m (12%) to £144.2m in 2011/12. This is primarily down to the failure to qualify for the UEFA Champions League, following their successful debut in the 2010/11 season. Spurs had an ultimately frustrating 2011/12 season, reaching the semi-finals of the FA Cup, and despite finishing in 4th place in the Premier League, missed out on Champions League qualification owing to Chelsea’s triumph in the Champions League final.

6. Newcastle United:

The Magpies are at the twentieth position during the 2011/12 and their revenue totaled up to £93.3m, an increase of £4.8m (5%) from the previous year.

Unlike a typical business entity, success for a football club is measured not in terms of financial figures alone, but like any business model a Football Clubs too has a cost and revenue side. The business model of these soccer clubs would be interesting to understand. In the next few articles, we may understand one such football clubs business model.

Another Brand Disaster??

Santoor has been very consistent in its positioning. It has been positioned as younger looking skin beauty soap. Now its has launched a Santoor Baby Soap. This new product by Wipro Consumer Care, the Baby soap will be trying to leverage Santoor's equity. Santoor's market share is  8.8% (compared with 8.3% in the September '12 quarter). It stand at No. 3. The Hindustan Lever's brands lead the ratings in the soap category (Lux & Lifebuoy with a market share of  14.4% & 14.0% respectively).

So is it going another brand disaster as we came across another such kind of example i.e. Dettol Utensil Cleaners.

The recent discussions in the Marketing class, suggests that Dettol's entry into Kitchen will affect the premium image of Dettol. Will the Santoor's image will be affected or not? 

The problem is that Santoor is perceived to be a soap for adults. And when such a brand launches a baby soap,users will doubt with regard to the mildness of the soap. The ad shows (link below) not an infant but a 2-4 year old kid. So the brand will be trying to target the segment which is slowly growing out of the Johnson and Johnson's baby soap. More over since the child is growing , mothers will not be much bothered about trying out a baby soap from Santoor's portfolio.

Johnson and Johnson is the market leader in this segment with a huge market share of 70%.

Doomsday for both Dettol & Santoor??

Manchester United's Indo - Asian Strategy

United claims they have 325 million supporters in Asia with more than 10 million Indian supporters.  David Gill, currently the chief executive, had commented in 2008 that the market in India is huge and they had an offer to come to play in India. He, at that point of time, felt United needed to conquer the final frontier before any other football club did.  India: a billion-plus population, a growing economy and a country that is astonished with the economical success of the IPL.

United entered the Indian market with the introduction of their official franchise partner Indus League Clothing Ltd in 2008.  The deal between both the parties was around 5 crore. Currently, Man Utd has six stores in major metros of Mumbai, Kolkata, Delhi, Bangalore and Pune. It is also present in 32 Planet Sports, 21 Pantaloons and seven Centrals nationwide and along operating with some online stores like Myntra and Fashionara.

Secondly, Manchester United Food & Beverage (Asia) Pte Ltd had kick-started its India business with the launch of their first ever Manchester United Restaurant and Bar in 2009 with their first Restaurant and Bar in Mumbai. This project was evaluated and conceptualized by Total Sports Asia, Asia’s leading sports marketing firm. This venture marks Manchester United’s first foray into India in terms of branded cafes and restaurants. By 2012, 8 such outlets have opened in the major cites like Delhi-NCR, Pune & Bengaluru. The Restaurant and Bar is designed with design features which include the Wall of Fame, the Dugout area and giant projector screens to screen ‘live’ telecast of soccer games and other major sporting events along with a manager dug-out.

The first ever Indian based Manchester United soccer school had started functioning since 2012 January at the Cooperage ground in Mumbai. The inauguration was done on 13th Jan 2012 by Gary Neville. Denis Irwin & Quinton Fortune give training along with the head coach Chris O’Brien.  Head coach of the Manchester United Soccer School, Chris O’Brien,  had told in a media conference that the school would train the children in exactly the same way as Manchester United Academy does in its home base in the UK and the theme is to ‘Learn to play the United Way’.

United also tied up with the Indian leading and global telecommunications company in 2010 announced an exclusive partnership and signed a four-year partnership agreement. The partnership is a first of its kind signed between Bharti Airtel and Manchester United in the African continent.

The other brand building activities which took place in Asia are:

• South-east Asian tour in 2001
• South Korean Park Ji-sung bought by club in 2005  to facilitate the increase in merchandise sale (Highly debatable- Park disproved the critics by saying he was selected because of his football capabilities)
• Web-Promotions: Half of the 325 mn fans on the Manchester United Asian Facebook page

While soccer has been around in Asia for a long time, demand for the sport has been revitalized with the strategy adopted by the English Champions.

Manchester United's Brand Building Strategy

In the next few articles, let us understand about the sports team's Brands building strategies. The most common strategy followed by most of the teams is: 

• Sponsorship with other global brands

Being associated with other international brand names lends global presence to brands as they go worldwide. If we talk about the most richest soccer club Manchester United, they have 44 official sponsors associated with the club.

One of the biggest tie up then in the year 2002 was Manchester United's tie up with Nike. Both Manchester United and Nike gained in global stature after the announcement of their global tie-in 2002. Now such is the case that Nike has to discuss £303 million kit supply deal with Manchester United and they might well have to any how shell out this huge sums of cash if they want to maintain their association with Manchester United. One month from now, this strategically important meeting will be talking place and the american sport wear company will have to come up with an enormous sum to satisfy the club’s owners 

The 'Swoosh' logo has adorned some of the greatest teams and players in the history of the game, including Manchester United legends Eric Cantona, Ruud van Nistelrooy and Cristiano Ronaldo. Of the current squad, Wayne Rooney, Javier Hernandez, the Da Silva twins, Chris Smalling, Patrice Evra, Paul Scholes and Rio Ferdinand all wear Nike boots along with the standard kits.

Swoosh: Manchester United's current kits are made by Nike

In recent years Manchester United has formed commercial alliances with a number of global players in other industries: Vodafone, Pepsi, DHL and Aon were all added to the club’s sponsorship list. Under these arrangements the club gains from sponsors’ international reputations and sponsors gain from their association with a such big sports brand. And Manchester United is talking full advantage of this to reach out to new segment of soccer fans and in turn helping in strengthening its brand equity.  

In July, United announced a staggering £357 million deal with General Motors for the Chevrolet logo to be worn on their shirts for seven seasons from 2014.  Chevrolet’s eight-year partnership with Manchester United kicked off this summer with a series of friendly matches, bringing the world’s favorite football team to their fans in South Africa, Europe and China. The support for, and commitment to, Manchester United and its passionate fans worldwide will go far beyond the pre-season games as General Motors look to join the fans in celebrating all that is beautiful about the game.

357 million deal with General Motors

One of the biggest logistics company which is present in 220 countries and territories worldwide has tied up United in 2011 where DHL were made responsible to undertake a range of logistics services on behalf of Manchester United for three years. Just like DHL, Manchester United stands for passion, teamwork and can-do spirit. And it’s those same characteristics that have enabled both DHL and Manchester United to remain at the top of their game and thus join together build it's brand.

DHL: The Logistics Partner of Manchester United

The last two deals done recently by Manchester United were with the two sponsors from China (Wahaha, a soft drinks manufacturer and China Construction Bank (CCB). Both have tied a three year deal . CCB will hold the exclusive rights to produce the official Manchester United branded credit card in Mainland China. Wahaha has been the largest beverage producer in China for the past 11 years and will be the club's first official soft drinks partner in the country.

This is just one of the many strategic decision taken by this 135 year old soccer club from Britain. In the coming article I would write about the Manchester United's Asian Strategy, mainly highlighting it's entry into the Indian market.

Who will Succeed the Fergie

The script might have been written number of times earlier, but this United Team is never tired of re-writing it again. Manchester United players synergy, enthusiasm and never die attitude turns setback into a success. It's certainly a extra ordinary habit. Most recent being the 4-3 win at Old Trafford against the Magpies.

It is now the eighth time in the 19 games, the team has transformed a failure into a fantastic finish in this season. Sir Alex Ferguson was quoted "It tells the courage of the players". Well this one of the many improbable comebacks this team has made under the Scottish Manager. The most famous being the 1999 Champions League final at Nou Camp where they trailed the game 1-0, but finally came on top scoring 2 goals during the added minutes to end the crazy game.

We all think what was the source of inspiration for those 11 players on the field who battled through the 90 minutes to come on top. In the book, Football- Bloody Hell! (Biography of Alex Ferguson by Patrick Barclay), Sir Alex famously shared his half time speech of the 99 champions leagues final which goes like this "At the end of this game, the European Cup will be only six feet away from you, and you’ll not even able to touch it if we lose. And for many of you, that will be the closest you will ever get. Don’t you dare come back in here without giving your all."

Now just turned 71 on 31st December, he is still working his magic, jumping around in the stands and he is showing no signs of pulling the curtains to his career as of now. Sometimes it seems like he could go on forever. However, as unlikely as it seems, he will eventually have to retire and the United camp should start searching for his replacement soon.

Sir Alex himself himself favours Pep Guardiola as his successor. Why? Because Pep has won just about every trophy possible in his four year stint at the Nou Camp. Being a product of the Barcelona youth system, and a follower of the that system, Guardiola even has the right philosophy for Manchester United, a club that likes to bring players through the ranks and add talent from elsewhere as and when it is required, just as Barcelona do.

Another one is the Special One, who have been very highly rated by Fergie. "Jose Mourinho is very intelligent,"  Fergie said to academics at Harvard Business School in Boston. "He has charisma, his players play for him and he is a good looking guy. I think I have most of those things, too, apart from his good looks". The head to head match ups suggests why the Master thinks Jose has the caliber to replace him.  Both of them have locked horns 13 times with the United Manager only winning twice with Jose winning six times. One who has won 16 domestic titles (13 at Manchester and 3 at Aberdeen) and another 7 domestic titles (2 each at Porto, Chelsea & Inter and 1 at Real Madrid). Both of them has won two Champions League Title. However, the best Jose Mourinho has managed is a little more than three seasons with Chelsea, hardly the type of stability that Manchester United will be looking forward when Sir Alex does decide to stand down.

Scot's are regarded as one of the best when it comes to producing managers. Few of them: Sir Matt Busby, Kenny Dalglish, Alex McLeish and David Moyes.  With more than 10 years of association with Everton and David Moyes is doing fairly good job there with a club which is severely lacking in financial resources. David Moyes has been able to consistently finish among the top ten and also had managed Everton to in the European games. David has the kind of stability which Mourinho lacks however the fact he hasn't managed a major European Club and big name players may well work against him.

Another one, whose names haven't been discussed at all is Mike Phelan (current assistant manager of Manchester United) who may be able to fill in the shoes of Alex Ferguson just as Tito Vilanova did for Pep Guardiola and F.C. Barcelona. Mike has been a Manchester United player playing more than 100 games winning 1992-93 premier league title under Ferguson. He has the advantage of already being more than familiar with the club; he spent 4 years there as a player and serving for five years as assistant  manager. In January 2010, Phelan was linked with a return to his first club Burnley as manager following the departure of Owen Coyel. However pursued to stay on by Sir Alex Ferguson and work as his right hand man during three Premier League title campaigns, a Club World Cup, two League Cups and guided Manchester United to two Champions Leagues finals. During Mike Phelan time as first Team Coach, Manchester United won three Premier League titles, one FA Cup, a League Cup, and a Champions League.

Better than failing at one go is succeeding little by little is what the Manchester United board should be looking at. Whoever replaces Ferguson should be given ample time as he was given.

Catastrophe

Someone said..

Bring it on man, im gonna finish what you began.

I hear you loud and clear, I gonna fill you up with fear,

I am gonna make you run and hide..

But.I say.

I feel the need of the speed and in the process you would feel deprived,

Later on don't cry out loud, still there is time to make yourself proud..

Time is of great essence, understand the sentence,

Sit up and analyze, it may still materialize..

I know the secret

Hereby I sit all by myself talking to the only person whom I know from all these years. The conversation with this person I never run out of topics. But the only problem if at all that’s a problem is that I haven't still figured it out that what this person wants.

Sitting idle both of us keep on talking endlessly about what we both want in life, what is that we are happy with but every time the result the same. We always draw blank.

Still again when chips are down, we again start the debate all again. We see the starry skies and down below there is two of us who keep on talking with no solution to the problem.

So now I ask what the problem is, why is it so difficult to leave all behind and keep yourself diverted?

Instantly the inside of me tell it’s easier said than done.