Branding the bottom line for United

PUBLISHED : Tuesday, 24 July, 2007, 12:00am
UPDATED : Tuesday, 24 July, 2007, 12:00am

'A good reputation is more valuable than money,' Latin writer Syrus wrote. But at Manchester United, the two go hand in hand. From a business perspective, Manchester United's four-city East Asia tour could be termed brand building. Culturally, the tour is also about adding a layer of the aura surrounding the team.

Last night's game against Shenzhen Xiangxue was titled the Macau Venetian Cup and both teams stayed at the still unopened Venetian Resort and Hotel, which cost more than US$2.4 billion. That the Red Devils were guests at such a palatial casino only added to the notion of a brand larger than life.

In 2006, Forbes valued Manchester United at US$1.37 billion. Future Brand, a brand strategy and design consultancy, in 2004 evaluated Manchester United's brand at Euro288 million (HK$3.11 billion).

According to Antonio Mello, a professor of finance at the University of Wisconsin who specialises in the valuation of football clubs, Manchester United is on the right track.

'The two most important initiatives are [to] increase audiences in the English League and the Champions League [and to] organise tours to play in Asian tournaments against both national squads and the best local team,' Mello said.

The former has, in part, been assured in the substantial television rights deal between Asian countries and the English Premier League. In Hong Kong alone, NOW TV's broadband service has paid US$200 million for a three-year deal to the EPL rights. The latter criterion has been on display for the past week.

'It's fantastic support in this part of the world,' defender John O'Shea said of the Asian base. 'I'm sure the club would like to come here every year, but that's not possible.'

Future Brand senior strategy consultant Samantha McCollum said Manchester United had been effective in part due to their strong commercial management and their ability to 'stretch their brand beyond the specifics of the game'.

Manchester United has opened new avenues of communication, including websites in Chinese, Korean and Japanese.

Merchandising remains a major source of revenue, with the club finding alternative distribution deals. Mello estimated about 90 per cent of merchandising was outside of the United Kingdom. From a cultural perspective, Asian fans are cultivated through numerous means. Some are, obviously, football-minded. However, the glamour quotient also enters into the equation.

According to McCollum, the star factor 'promotes their individual players as celebrities that youngsters dream to imitate'. But with its reported 70 million fans worldwide, of which 41 million are from Asia, does winning matter as much any more?

That, according to Mello and Carter, is a necessity. 'Winning always matters,' Carter said.