Squeeze the lemon
Add another $1 billion to Man Utd's valuation
The bidders for Manchester United are now in a virtual data room, filling their spreadsheets and compiling their questions. The job of the Glazer family’s investment banking advisors, Raine Group, is to find ways to squeeze every possible dollar out of this football asset. One trick of the bankers’ trade is to identify possible sources of profit that have so far been unidentified or underexploited. In short, to sell the dream, and so maximise the tension in the bidding process.
To that end, a study published last week by CLV Group couldn’t have been more timely. Its third Fan Relationship Index report is based on a survey of football fans from around the globe and concludes that leading clubs are significantly underpowered when it comes to engaging with remote fans. Streaming services, virtual matchday experiences in the metaverse and digital memberships or fan tokens all have the potential to boost income, and with that both profits and club valuations.
CLV claims that Man Utd are currently missing out on £87 million of annual income from such products, each of which could have particularly strong appeal to overseas fans who may never have the opportunity - or perhaps even the inclination - to set foot inside Old Trafford. It is fair to assume that the economies of scale are such that, when fully up to speed, these offerings would all generate high margins - perhaps 50% or more. Stick the resulting profit on a punchy valuation multiple (that’s the job of the dream-selling bankers) and these alone could add $1 billion or more to the takeover price for the club.
Any analysis based on survey data in any industry needs to be dialled back. It’s one thing to say you’d pay for exclusive access to training ground video clips, it’s another entirely to hand over your credit card details and subscribe. But the basic thrust of CLV’s work is compelling. As I’ve argued here often, the major US sports franchise are far ahead of football in monetising fandom. Even American owners of Premier League clubs - including the Glazers - have been shy in going all in with the commercial playbooks they’ve honed back home.
This also emphasises the size of the prize available to European football from the swelling population of fans based in the United States. Just under half of the incremental revenue opportunity open to Man Utd is deemed by CLV to be in America. Partnerships with NFL and NBA teams could be a way for clubs to accelerate awareness and tap into new supporters there who are more comfortable with paying for access and experiences than their counterparts living round the corner from the team they follow.
Ted Lasso series three - just twenty days away and counting…
Where a few weeks ago it seemed as though three of the ‘big six’ Premier League clubs might be on the blocks simultaneously, Liverpool’s American owners now seem focused on raising fresh investment rather than selling, and tales of Middle Eastern interest in Tottenham Hotspur have waned - at least at the moment.
If the test of a club’s global appeal is taxi driver conversations in remote countries, Liverpool pass but Spurs fail. CLV calculates the latter’s US opportunity at just £8 million a year, one fifth of Man Utd’s. If true - and Spurs chairman Daniel Levy would doubtless be determined to prove it wrong - then this is just one more indication that the gap between the football brand behemoths and the rest is likely to grow ever wider as the sport really gets to grips with the potential of Web 3.0.
You can apply for access to CLV’s report here
Just to let you know: I’ve been getting close to Socios.com recently on a couple of fronts and am a proponent of their fan token model - more on that in due course (I hope)
Tasteless egg and bacon
I’ve only been to the cricket Varsity Match once, in the late 1980s. My one memory is an England rugby international holding court outside the Tavern bar at Lord’s with a tottering tower of empty pint glasses. In rugby’s amateur era he was clearly a player in his own mind, although maybe not a gentleman.
The current ructions within the MCC about the future of the Varsity Match as well as the Eton v Harrow game get ever more toxic. A survey of members of the club that owns Lord’s saw traditionalists defeat the modernisers who want to replace the annual Oxford v Cambridge and elite schools’ fixtures with finals of competitions open to a broader range of students and school kids.
So far, so unsurprising given the demographic of the MCC’s membership. Notably, female members of the MCC - a small minority in the club - voted decisively against retaining the two contentious fixtures.
What must the ECB think, very publicly committed as it is to its equality, diversity and inclusivity agenda, and regular user of Lord’s as the showcase ground for England matches and finals? One long-standing, exasperated MCC member on the side of the reformers contacted me last week wondering whether this was a club he could any longer admit to being a part of. Might the ECB itself contemplate the threat of reducing its use of Lord’s to create pressure for change?
If you think it’s a good look for the ECB to avert its eyes, just reflect on this use of language in a letter from the MCC’s self-styled Committee for the Reinstatement of the Historic Fixtures at Lord’s:
“The [decision to remove the matches] has unleashed an unprecedented wave of passion and created a deep division within the club that will take many years to heal. Those who made the decision should surely have anticipated it, knowing as they do the make-up of the membership.”
This committee’s solution? No further vote for 10 years. The ECB might want to think more in terms of weeks for the ‘right’ resolution.
How far on Google Maps?
Headhunters are literally searching widely for the next chair of Yorkshire Cricket. Domicile is no issue. The brief for arguably the most difficult job in British sport talks of a commitment of a “minimum of 24 days per year, with optional match day attendance.” No way will the next chair get away with optional cricket watching - or only 24 days of the core stuff. They don’t need to reside in Yorkshire, but they’d better be able to get to Headingley easily and often to have any chance of succeeding in healing the deep wounds in the county.
32,158 in attendance to watch the Lionesses beat Italy 2-1 in Coventry on Sunday, a record crowd for any sports event at the CBS Arena. Good to see that interest in the England women’s football team generated by last year’s Euros triumph hasn’t faded.