The legendary Red Devils coach: The road to success

Chapter 180 The Wave of Commercialization

"The commercialization of football clubs is determined by fiercely competitive games and rapidly developing business management, and is an integral part of social and economic development. Commercialization is the only way for a football club to develop, and listing is one of the latest ways."

--Inscription

Not long after winning the Cup Winners' Cup, Manchester United fans received great news: the club was successfully listed at the end of the season.

The commercialization of the Red Devils has long been a representative of the commercialization of competitive football and has always been an important case in the field of sports business. In today's era, of course, everyone recognizes and highly values ​​the commercial operation capabilities of the Red Devils, and even needs to explore the Red Devils' traffic economy code and the secrets of making money in the era of Internet celebrity economy. But in the 1980s and even in the 1990s, the Red Devils' commercial operations were stagnant and were always considered a burden on the team's progress, with no way to add more motivation and help to the team.

On the other hand, there are also many die-hard fans who resist the commercialization of the team. There are still many fans who criticize the team's listing. They have always opposed the listing financing of clubs including Manchester United and Tottenham, believing that this is capital invading football and blaming the listing of Manchester United on the greed of capitalists. Some critics said that the listing of Manchester United tainted the purity of football, commercialization was a betrayal of the club's purpose, and the listing was equivalent to opening Pandora's box. Some media believed that the listing of Manchester United was Edwards's exploitation of the club and the fans, and it was naked robbery.

The business rules of the UK stock market are relatively clear and standardized, with ancient historical origins and a standardized system that has been verified by social development. Listing on the London Stock Exchange is a risk-and-opportunity coexistence. Issuing stocks to raise funds will also turn the company into a public company, subject to supervision by shareholders, the government, public opinion and all parties.

In the UK, after a club goes public, it becomes a public company, which is in line with the government's positioning of football clubs. After a football club goes public, it needs to disclose more information and data, and its business operations must be subject to comprehensive supervision. Of course, the government is also happy to see that listed football clubs have more motivation to accelerate development, have greater pressure to operate well, strive for more returns, and promote the sustainable development of the team. The considerations for the Red Devils' listing are nothing more than this. In the early 90s, the Red Devils were not financially well-off. Renovating the stadium stands required a large amount of funds that could not be found, and the cancellation of standing seats reduced a lot of income. The Red Devils also urgently needed to introduce strong stars to compete for the league championship, and all of these required huge funds. The Red Devils' assets are not rich. According to the estimate of Edwards' own accountant, all the assets, including the Dream Theatre Old Trafford Stadium and the Cliff Base, are worth only about 3000 million pounds.

The £3000 million is actually a lot of water, but the Red Devils' lack of competitiveness in signings cannot be concealed. They cannot compete with domestic giants, nor can they compete with foreign teams. When competing for Gascoigne and Shearer, they failed because they were not as good as their opponents in various conditions.

The key to the Red Devils' stock listing is to introduce the concept of expected value. This expected value is enough to seduce fans in a football club. The club's championship results and even various future incomes, and what touches the fans' hearts more directly is the club's values... and other contents that touch the fans' spiritual world. These cannot be directly converted into funds in the operation, but can attract investment after the stock listing.

The simplest fact is that the Red Devils Club revalued before the listing, and several major underwriters gave a figure of more than 8000 million pounds!

The money effect is so simple. The biggest goal that the Red Devils need to achieve when they go public is simply easy to achieve. Fans can support the club's development by buying shares, making themselves more closely connected with the club. This seems wonderful and is in the true interests of the club and the fans.

The ultimate form of football commercialization is to go public, but does going public mean excessive commercialization? Does it deviate from football tradition? Does it mean the disappearance of pure football? These remarks deserve in-depth discussion, but it is a bit ridiculous to ask football to stay away from business. With the development of social economy, the commercialization of teams is almost an inevitable trend. As an organization, professional football clubs need expenses from the moment they are established, including tickets, broadcasts, other sales income, player and coach salaries, purchase expenses, various daily operating expenses... None of them does not involve money.

It can be said that without commercialization, football will be unable to make any progress.

Before going public, the Red Devils' funding sources included not only ticket sales, but also advertising, merchandise sales, and TV broadcasting revenues, all of which were commercial. It is impossible to ask a club not to do revenue and expenditure accounting, which is much more difficult than asking a club not to make a profit. In a league like England, which does not have the special regulations of La Liga and the Bundesliga, the competition among football clubs is extremely fierce. Not making a profit and increasing losses...means that they are heading for death.

In history, football clubs have evolved from amateurs to professionals, and football matches have evolved from amateur exchanges to professional leagues and various championships. These are all inevitable developments of commercialization. Whether it is over-commercialization and whether it will affect the operation of the team is not determined by the listing, but by the more complicated reasons behind it. In history, of course, many famous clubs have gone bankrupt and dissolved for various reasons and no longer exist, but no one has closed down due to commercialization.

Even when the Glazer family burdened the Red Devils with huge debts more than 20 years later, the Red Devils never reached the brink of danger.

After the Red Devils went public, they attracted a lot of financial support. The Red Devils' development began to accelerate further, which included not only the competitive aspect, but also the introduction of more management and marketing talents, the attraction of more sponsorship, the expansion and renovation of the stadium, and the increase of commercial income.

For the original owners of a football club, going public often represents a huge increase in wealth, and also provides them with a convenient way to sell off their shares for huge profits.

Club chairman Martin Edwards is one of those who wants to sell his shares. His father, who was the owner of a meat processing factory, spent more than 60 pounds to acquire more than half of the shares of the Red Devils. Now this money has become ten times or a hundred times. Edwards tried to sell his shares before the Red Devils' stock was listed. At that time, his selling price was only 1000 million pounds. But this price was not popular, and Edwards was almost cheated once.

After the Red Devils successfully went public, Martin Edwards, who sold his shares one after another, finally received 6400 million pounds.

Edwards earned tens or hundreds of times more in return from Manchester United, but Manchester United fans eventually recognized him. It was indeed he who brought in Ferguson, which was his greatest contribution. The expansion of the Theatre of Dreams, the optimization of business operations, and the founding of the Premier League were all Edwards' contributions.

The Red Devils' successful listing has entered a new stage. The club is truly confident to continue to introduce strong players to add weight to the team's championship. Old Trafford is also gradually evolving into a real "dream field", and the Red Devils' football business territory is constantly expanding.

From matches to daily operations, from broadcasting to advertising, from youth training to superstar creation, from sponsorship income to various investment operations, the Red Devils' football career has become more like an entertainment industry, more like a business, a business with the characteristics of football and excellent viewing value.

Thanks to the listing, the Red Devils' commercial team was quickly put in place, and the "new marketing strategy" quickly became a success. The Red Devils soon surpassed Liverpool's commercial revenue, surpassed Tottenham, Arsenal, Chelsea and other London giants, and even surpassed the historical stage in which they were in. This healthy development made its influence and competitiveness stronger and stronger. "The richest football club in the world" started here.

In the football world outside the Red Devils, the commercialization wave has actually been rolling forward. This is an irreversible trend in modern society. Without the market and commercialization, the development of football will become a mirage. The key to why Italian football dominated the 80s and 90s was large-scale commercialization and in-depth commercial operations. At the peak of the seven sisters of Serie A, the giants of La Liga and Bundesliga were also working hard to expand commercialization. In England, Tottenham took the lead and started listing and various sponsorship negotiations early, which increased a lot of advertising revenue.

Now that the Red Devils are listed, it means more money, more transfer fees, more success, more exciting football, which is definitely a good thing for the fans.

Will going public significantly increase ticket prices? Will it turn away more fans? This is completely absurd. First of all, price increases are the general trend. Clubs that are not listed have also been raising ticket prices. Manchester United's ticket prices are not too expensive. Even in the Glazer era, they were at the middle level of the Premier League. The really high prices are for some clubs that are not particularly good at business. For Manchester United fans, home tickets are not too expensive, but too difficult to get. Most of the Manchester United home tickets are held by die-hard fans in the form of season tickets for a long time, and the remaining tickets sold individually are sold out early.

The Red Devils' home stadium has always been popular, and every game has been packed before and after the listing. There is no problem of fewer and fewer fans.

When the Red Devils first went public, not many shares were sold to the public. There was a rush to buy them when they first went public, but the stock price has remained stable since then, and has been on a long-term upward trend. The British were keen to buy Red Devils shares, which was based on expectations as mentioned above. The first batch of shareholders who invested in Red Devils shares made a lot of money, and even if the shareholders only wanted dividends, they still made a lot of money every year.

Facts have proved that the Red Devils' listing and subsequent commercial development have truly achieved a win-win situation for the team and shareholders - a win-win in both competitive results and operating performance.

The tide of commercialization is rolling, but the Premier League clubs and the La Liga, Bundesliga and Serie A clubs are each taking different development paths. Before and after the Red Devils went public, Premier League clubs such as Chelsea, Newcastle, Leeds United and Aston Villa went public one after another, and even relegated Nottingham Forest and Millwall in the second division were not willing to lag behind. By the end of 1997, 18 clubs in England had raised their first funds in the securities market through initial public offerings, and the Premier League had a glorious situation where more than half of the teams were listed clubs.

In addition to the wave of football clubs going public, the establishment of the Premier League is also a fruitful result of commercialization. The Premier League's innovative business model has enabled the English league to develop rapidly in the commercial field. Super-high broadcasting contracts and lucrative sponsorship income have pushed the commercial achievements of Premier League clubs to the peak.

After the new century, the commercialization of the Red Devils continued to develop, heading towards a more complex commercial red ocean. Around 2003, American Glazer took on debt to acquire the Red Devils club and privatized it, causing an uproar.

This is a typical case of leveraged buyout, and its impact has been spreading to this day. The Glazer family acquired the Manchester United by borrowing money, and then transferred the huge debt to the club. The Manchester United went from being the most profitable club to the most indebted club overnight, which aroused opposition from many fans.

As the Red Devils' financial situation improves step by step, the Red Devils' stock is once again listed in New York. The Red Devils' commercialization path continues to move forward, and the Red Devils are still full of vitality.

The success of the Red Devils' commercialization is not about going public or delisting, nor about taking on debt or sponsorship. The key is still daily operations, and all of this requires performance guarantees. Ferguson's performance as the Red Devils coach has always been at the forefront of the Premier League, making it the most powerful overlord in the Premier League, and all commercial operations are guaranteed.

After Ferguson retired, the Red Devils continued to decline in competitive performance. Even with the continuous advancement of commercialization, it is difficult to reverse the team's decline.

In 21, at the beginning of the 2023st century, the battle for ownership of the Red Devils once again attracted attention.

At this moment, many Red Devils fans still remember Ferguson.