Football Dynasty

Chapter 100: Commercial Value of Football

10 September 1994

After their head-to-head match against Blackpool, Manchester City’s performance could be described as both good and not-so-good. In their second match, City suffered a 3-0 defeat against a strong Fulham side at Craven Cottage.

Determined to bounce back in their third match, City made a statement by sweeping Notts County aside at Maine Road, demolishing them 7-1.

Ronaldo netted a hat-trick, while Solskjaer added a brace. The remaining goals came from Roberto Carlos with his signature howitzer shot and a header from Sol Campbell.

Their next fixtures began with disappointment, as a frustrated Maine Road crowd watched City stumble to a 0-0 draw against Wrexham.

Next came the League Cup, where O’Neill rested Ronaldo, Cafu, and Roberto Carlos. The match was hard-fought, but thankfully, Shaun Goater’s last-minute equalizer salvaged a point for the Blues in a 1-1 draw at Plymouth.

He then scored two more goals as City got back on track with a 3-1 win at home against Walsall in the league.

3 win, 1 lose, 1 draw.

After watching the match, Richard hurried back to his office to manage Manchester City’s critical financial situation.

The club was still in the midst of a financial crisis, and the annual financial report revealed pre-tax losses of £6.3 million from the previous season, which had risen to £11.6 million currently. This left the club with weekly interest payments of £71,000 alone.

The club originally had over £44 million in debts during the Swales and Lee era, and with his £30 million loan, at least £15 million of the short-term debts had already been paid off. The remaining £10 million was allocated for the club’s operations.

This means there is still approximately £29 million left to be settled. He needs to quickly secure additional cash to implement another loan scheme before the Club Licensing and Financial Fair Play Regulations are introduced in the early 2000s.

Of course, this wouldn’t be the real FFP, as Financial Fair Play was only approved in 2010. These regulations were designed to promote financial stability by ensuring clubs operate within their means, primarily by balancing spending with revenues and limiting the accumulation of debt.

"Or maybe we take out a loan first and pay it off later. The only issue is, I’m not sure how much we can borrow given Manchester City’s current situation. Still, it’s worth a shot. I’ll need to talk to John," Richard pondered.

Back in the league, City dropped another two points, drawing 2-2 at Northampton, and then lost more ground in the promotion race, drawing again—this time 1-1 at Millwall, where the City players and fans had to endure some ugly scenes caused by the Millwall fans.

This was the first time Richard had witnessed just how barbaric English football fans could be.

The stands were in complete chaos, and Richard, seated in the director’s box, had to be evacuated when he turned to see City fans celebrating their goal. This triggered outrage among the extreme Millwall fan groups, resulting in a small-scale skirmish in the stands.

"Ugh, it’s probably Boggy’s crew causing trouble again."

After being escorted out by his bodyguards, Richard turned to John. "Boggy? Who’s that?"

"Oh, he’s the leader of the Bushwackers, a sworn enemy of the ICF. Let’s just say, whenever Millwall clashes with outsiders, there’s an 80% chance the Bushwackers are involved."

"How about the Guvnors and the Crew? Have they shown any signs so far?"

"Not so far."

Richard paused for a moment, carefully considering his next move before speaking. "Regarding the incident just now, request the FA for the CCTV footage if possible, and check if any members of the City firm were involved. The skirmish wasn’t major this time, but if we let our guard down, the next one could escalate."

"Understood," John replied.

"What about the loan we discussed previously?"

"We’ve successfully secured a loan of £21 million."

"Can we allocate part of that for the Kippax stand? How much would it cost to rebuild it, ideally as quickly as possible?"

"Hmm, I believe around £3 to £4 million would be sufficient, assuming we handle everything efficiently."

"Does that include the seats?"

"Yes," John replied. "The shelved stadium plan should indeed be expedited. After all, having a better and larger stadium greatly impacts the club’s income."

"Then let’s prioritize the Kippax stand. Allocate the funds for that. It’s critical."

Richard’s voice was decisive, aware of the urgency in making quick, impactful decisions both on and off the field.

They continued their discussion as they walked to Richard’s office. Once inside, Richard took a seat and exhaled deeply before turning to John, who stood before him.

"John, there’s something I need to ask. If it offends you, I hope you’ll forgive me. Do you truly understand commercial football?"

John looked perplexed, furrowing his brow as he cautiously replied, "You mean like how Manchester United operates the club like a public corporation, right?"

While football was always a central concern for the club’s success, the business side (i.e., revenue generation, shareholder value, commercial deals, and profitability) was gaining significant importance, especially since the formation of the Premier League.

This was particularly true for Manchester United. The club was indeed managed with a strong focus on business considerations, especially after 1991, when it was publicly listed on the London Stock Exchange.

Richard shook his head lightly and responded, "You’ve been with the club for five years, so you should have a solid understanding of football. But let me ask you, which club in England has been the most successful?"

"Manchester United."

"In the last thirty years?"

"Still, Manchester United...?"

Richard nodded. "How is it possible that, even after Liverpool won the European Cup following Real Madrid’s victory and Manchester United was relegated, United was still regarded as the most successful club in England? Aren’t you curious about that?"

John furrowed his brow, seemingly unable to answer. He then shook his head. In the first place, his specialty was negotiation—making the right offer and securing the best deal possible.

"It’s a baffling reality, right? despite Liverpool winning the European Cup four times, Manchester United remained the favored club in England in many eyes, with their standing unshaken even after relegation."

It appeared that Manchester United possessed something intangible—an aura, a conviction that their players and coaches were the best, and thus deserving of the top spot. This bold and unapologetic stance distinguished them on the European and global football stage.

Seeing John lost in thought, Richard spoke softly, "It’s simple. Brand Identity."

The end of the Cold War in the late 1980s and early 1990s reduced world political tensions, and the meteoric rise of the internet and global communications caused an unprecedented acceleration in commercial activities outside domestic markets.

In the realm of sports, globalization has fueled international rivalries that trace their origins back to the 1896 Olympic Games. Since then, many sports have thrived as their global media exposure has grown, particularly through quadrennial appearances in the Olympics.

Sports like tennis and golf have been global for decades, as have British-origin sports such as cricket, rugby, squash, and badminton. American sports like basketball, American football, and baseball have also established strong presences in foreign markets, with global media expanding their reach beyond domestic audiences. However, no sport has benefitted from global exposure as much as soccer (football).

Since its first appearance in the 1908 Olympics, football has attracted increasing international attention. The first World Cup was organized in 1930 by Jules Rimet in Uruguay. Since

then, it has consistently drawn more support worldwide than any other pastime.

As globalization trends accelerated after the 1980s, increasing numbers of professional football clubs sought to capitalize on the sport’s global appeal, but only two clubs, Manchester United and Real Madrid, emerged as global brands.

Although Real Madrid has a very high global awareness and recently overtook Manchester United as the club with the highest turnover, many observers consider that Manchester United’s innovative branding and marketing strategies were at the leading edge of the contemporary trend in sport globalization.

"Manchester United is one of the leading clubs in world football, with a global brand and following that embodies the passion and excitement of the world’s most popular sport," Richard stated.

John frowned, clearly puzzled. "What do you mean?"

Richard shook his head, opened his drawer, picked up a document, and threw it onto the table in front of John, signaling him to take a look.

When John saw the documents, he frowned and couldn’t help but look at Richard seriously.

He was honestly offended.

Did he think that City had never conducted marketing campaigns?

Then what was the point of him being the general manager of Manchester City?

Did he underestimate his abilities?