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Man United Struggles Have Slashed £250m Of Teams Value In FOUR Weeks

Old Trafford NewThe investors on Wall Street have voted, and they dislike the direction of the Premier League champions even less the supporters do. Over the last month, the financial markets have slashed the teams value by £250m to £1.5B.

Three loses in a week, an early exit from the FA Cup and doubt over whether United will even qualify for the Champions League next season have all combined to give Wall Street the jitters.

While the Glazers remain firmly in control of the club, Wall Street’s reaction could be an indication of storm crowds on the horizon around United’s commercial dealings.

United have been able to grow their revenues on the strength of unparalleled sponsorship deals. Under Sir Alex Ferguson, United grew into a global brand that claims more than 650m followers. The vast majority of those 650m fans are new, they have only started to follow United in the last 10 years and have enjoyed the clubs success on the pitch.

But if this is the start of a transition period at United, how many of those fans will continue to support the club, even if United are not wining trophies?

That has to be the worry of someone like Nike which pays United a minimum of £25m a year for the sale of two million replica shirts around the globe. Those sales helped to earn United an additional £12.8m from the agreement last year.

And though Nike is expected to renew its deal in the next few months, the team’s recent struggles could cause the American company to lower the price it pays United amidst worries that they will sell less shorts in Cape Town, Shanghai and Seoul if United’s struggles continue.

Under Financial Fair Play rules, the importance of a teams commercial revenues cannot be overstated. The top teams all make similar amounts from match day revenue and media rights. It is the commercial revenue that separates them, that becomes the engine to sign the best the best players in the world.

While United’s on the pitch performance is worrying, what has to worry United’s officials more is the impact that could have on the teams commercial revenues.