Example Of Research Proposal On UK Football Industry & Manchester United

Type of paper: Research Proposal

Topic: Sports, Soccer, League, World, Marketing, American Sports, Football, Club

Pages: 7

Words: 1925

Published: 2020/09/29

Introduction & Background

The UK and global sporting industry continue to thrive despite the recent turmoil in the global economy, in part because of the explosion of technological improvements in the broadcasting industry and the internet, but also because of the growing popularity of sports. The UK football industry, particular the English/Barclays Premier League is easily one of the most popular and profitable sporting enterprises in Europe and the world. The English Premier League is the UK’s most elite professional football league run by the Premier League (an organizing body registered as a private company), whose responsibility is to engage member clubs and other stakeholders to ensure quality, competitiveness and profitability of the league. The League has 20 member clubs (including Manchester United), which are also shareholders in the Premier League, and it is charged with the regulation of the league, scheduling and officiating games, marketing and representation of the member clubs. While the top flight of the EPL comprises the country’s 20 elite clubs, the premier league comprises several flights of leagues, which produce teams that ultimately join the top flight. These include the Championship, League 1 and League 2. The best three teams in the Championship join the top flight, after the three worst performing teams in a season are relegated.

Market Size

The global sports industry is estimated at US$145.3 billion, with the UK spectator sports industry in the UK receiving £800 million in ticket revenues, with even more value in sponsorship deals, media rights and merchandising. The EPL realized upwards of €900 million in revenues during the year 2012/13, representing a 6% increase over the previous year, with a 4% increase in actual event attendance. With the total revenue for the top five football leagues in Europe amounting to €9.8 billion during the same season (which is close to 50% of all other leagues in Europe - €19.9 billion), the English Premier League is hugely successful. The average stadium attendance in the EPL is 36,695 people, which is not only a pointer to the popularity of the game, but also a huge source of revenues. In terms of relative revenues, the EPL realized the highest amounts of revenues with €2.946 billion, compared to €2.018 billion and €1.859 billion attained by the Bundesliga (Germany) and Spain’s La Liga respectively. Italy’s Serie A and France’s Ligue 1 had €1.682 billion and €1.2632 billion respectively.
Figure 1: 2012/13 Revenues for Top Five Football Leagues in Europe

Manchester United

Manchester United Football Club (and its subsidiaries) is one of the most successful professional football clubs in the UK, founded in 1878. It participates in the premier league, the FA Cup, the UEFA Champions League, the Europa Cup and the League Cup. Other than its on-the-pitch performance, the club draws revenues from merchandise (branded replica uniforms, training clothing, and memorabilia) through its more than 200 licenses across the world. The club also provides digital and television content under its brand, including MUTV, which broadcasts across more than 80 countries. With upwards of £363.2 million in 2013 revenues, the club had the highest returns, despite a dismal performance on the pitch. Manchester United’s attitude to the market is to ensure an excellent on-the-pitch performance, which in turn inspires a huge international following, which can then be leveraged to push its merchandize. To this end, the club spends heavily in buying proven player talents, who are on their own crowd-pullers, who have been responsible for the team’s 20 championships in England, several FA and UEFA Cups among others. Popularity and an excellent on-the-pitch performance are also important in increasing the club’s attractiveness to sponsors; its share broadcast royalties; gate collections and match day attendance.

Competitors

Manchester United’s direct competitors fall into two broad categories. The first and most direct competitors comprise the 18 teams in the top flight of the league (including Swansea, New Castle United and Chelsea FC), which can be further classified into top five clubs and the rest (determines whether the team plays in Europe). This group of competitors includes Arsenal Holdings, Chelsea FC Plc., Manchester City and Everton FC. Other competitors include clubs participating in domestic and European Championships in which the team participates, including Real Madrid FC, Barcelona, FC, Bayern Munich and AC Milan.

DRETS Analysis

Demographic & Social Factors - Football is the most popular sport across the world, as perhaps best shown by its universal reach and the runaway success of the FIFA World Cup. Globally brands such as Manchester United means that the club stands to benefit hugely from this popularity. The sport appeals to many people regardless of their demographic characteristics. However, the choice of the sport, the league and the specific football club depends on varying fan motivations, quality of the facilities (stadium and other infrastructure), gate prices, participation in the prestigious competitions, and even time zones (which affect the screening time for live matches). However, the increasing commercialization of football has given rise to a difficult balancing act between different stakeholder interests, with some wealthy clubs literary buying success without the slightest regard to sustainability, supporters’ welfare and corporate social responsibility.
Regulatory - Perhaps the biggest challenge for top flight clubs are the increasingly tight regulatory frameworks both domestically as well as internationally. FIFA has the ultimate control over international fixtures and calendars, which has proven disruptive for top-flight teams with busy schedules. The 2022 World Cup in Qatar, for example, could be played in the winter, right in the middle of the domestic league, forcing Manchester United to make do with a few players. Further, UEFA’s Financial Fair Play rules require that clubs participating in European competitions are not only solvent but are limited in their spending by their football income. While these rules can attain more viable and sustainable sport, the rising player transfer fees inflation across the world means that clubs, that make losses, are doomed to collapse because they cannot afford the best talents. The EPL falls under the regulation of the national football governing body (the English Football Association), the sport’s European governing body, UEFA and the world governing body, FIFA. The national, European and the World governing bodies are responsible for sanctioning the sport’s rulebooks, preparing fixture calendars, marketing, and foot development (Barclays Premier League, 2014; The FA, 2015).
Economic Factors – The market is growing. By the close of 2016, the global premium sports broadcast is expected to hit £16 billion in annual revenues, representing a part of the increasing revenue streams for clubs such as Manchester United. Expenditure on merchandize, cable television and match day attendance is heavily dependent on the economy’s performance. However, according to Mintel (2012), the spectator sports industry in the UK was unaffected by the global economic crisis. Since the UK and the global economies have recovered from the worst effects of the crisis, it is reasonable to expect and expansion in revenues across the board. However, the cost structure for Manchester United and other top-flight clubs is increasing changing with transfer fees, wages and infrastructure spending hurting profitability. In 2012/13 season, the wages to revenue ratio for championship clubs stood at 106%. By the close of 2016, the Premier League clubs are expected to spend £2.5 billion on the player/manager transfer market.
Technological – The on-going improvements in sports and media technology are contributing to greater quality and increased revenue streams. High-quality television coverage has resulted in the greater number of viewers, which is turn attractive to sponsors. Similar, the rise of the internet, and social media have given rise to new and profitable channels to deliver televised content, news and marketing materials. Social media remain instrumental in relationship marketing.
Threats & Opportunities For Manchester United, the biggest threat at the moment is its high indebtedness following its acquisition by the Glazer family and its high spending on player acquisitions present a massive challenge. The currently owes more than £350 million. The club spent upwards of £100 million on star players and a new manager, in an attempt to stem a run of the poor on-the-pitch performance. This is worsened by the fact that the on-the-pitch performance situation has not improved as expected. The rate of debt could bring the club into conflict with UEFA’s Financial Fair Play Rules, which would further constrain its ability to buy new players and remain competitive.
On the other hand, the greatest opportunity for Manchester United lies in its strong brand, solid past financial performance and the overall expansion of the number of fans following the English Premier League. With advancements in the media technology, marketing of the league and convergence of the sport and entertainment industry, the potential revenue streams are expected to increase with a considerable and Manchester United stands to gain considerably (Manchester United FC, 2015; Kotler, et al., 2006).

Commonalities and Differences in Marketing Strategies

Physical Evidence and Place – As a spectator sports industry player, Manchester United has one of the largest and best stadium in the country, with a sitting capacity of more than 60,000 people. Similarly, the club has invested in the team’s technical facilities (physical and human capital) to ensure high quality football, complete with great uniform designs, which makes for high match day attendance and merchandize sales. Other aspects of physical evidence include junior academies, club museums, memorabilia and branding (Yip & Hult, 2012; Manchester United FC, 2015).
Process – The process involved in the delivery of excellent service includes investment in the best players, manager, technical bench and facilities. This is coupled with the development of good stadium facilities for fans and tourists, merchandize shops and other infrastructure projects that make for better fan experience.
Promotion – Manchester United promotes its brand and services through its matches because of the large television and football audience across the world. Other forms of promotions include the use of social media, MUTV, branded merchandize (branding) and corporate social responsibility programs (De Mooij, 2005; Peter & Olson, 2005).
Price – The company has some control over the gate charges and merchandise pricing (also controlled by sponsors), which are, however, some of the most expensive in the industry. Opportunities for lowering merchandise prices and increasing the quantity sold exist. However, clubs design long-term contracts with firms that design, manufacture and distribute the merchandise, effectively losing the power to control pricing.
Strategic Service Marketing IssuesThe UK football industry has numerous players beyond the control of the clubs. These include the media, the governing authorities, and the ultimately, the fans (MarketLine, 2014; Kotler et al., 2006). Manchester United provides an experience or a service for the fans, from which all stakeholders derive value. The fans are, however, an inseparable part of the process (e.g. stadium atmosphere) and it really difficult to control the quality of the product. In addition, the experience is not storable and thus the club has to recreate it every single day. The global nature of the fan base is easily the main demographic issue, which the club must address. Relationship, service marketing strategies, are important for success (Williamsn & Page, 2005; Perner, 2011).

Recommendation

It is very important for the fans and other stakeholders to have a sense of ownership for the club, besides continually reinforcing the sense of reward through excellent on-the-pitch performance. To achieve these goals, Manchester United should:

Increase its involvement in corporate social responsibility in order to bolster a sense of ownership in the community

Improve the team’s performance on the pitch in order to keep fans and sponsors happy, while at once generating revenues that can be used to give the club a strong hand in the transfer market

Bibliography

Barclays Premier League, 2014. Who We Are. [Online] Available at: http://www.premierleague.com/en-gb/about/who-we-are.html[Accessed 15 Jan 2015].
De Mooij, M., 2005. Global marketing and advertising: Understading culturalparadoxes, Thousands Oaks: SAGE Publications,Inc .
Deloitte, 2014. Annual Review of Football Finance 2014, London: Deloitte.
Kotler, P., Bowen, J. & Makens, J., 2006. Marketing for Hospitality and Tourism. Upper Saddle River: Pearson Prentice Hall.
Manchester United FC, 2015. About Us. [Online] Available at: http://www.manutd.com/en/News-And-Features/Football-News/2015/Jan/louis-van-gaal-gives-update-on-robin-van-persie-injury-and-team-news-for-manchester-united-at-qpr.aspx[Accessed 17 Jan 2015].
MarketLine, 2014. Manchester United FC, New York: MarketLine.
Mintel, 2012. Spectator Sports - UK - April 2011. [Online] Available at: http://store.mintel.com/spectator-sports-uk-april-2011?cookie_test=true[Accessed 16 Jan 2015].
Perner, L., 2011. Consumer Behavior: The Psychology of Marketing. [Online] Available at: http://www.consumerpsychologist.com/[Accessed 12 Oct 2014].
Peter, P. & Olson, J., 2005. Consumer Behavior and Marketing Strategy, Seventh Ed. New York: McGraw-Hill Higher Education.
PriceWaterHouseCoopers, 2015. PwC Outlook for the global sports market to 2015. [Online] Available at: http://www.pwc.com/gx/en/hospitality-leisure/changing-the-game-outlook-for-the-global-sports-market-to-2015.jhtml[Accessed 15 Jan 2015].
Rugman, A. M. & Collinson, S., 2012. International Business (6th Ed). London: Pearson Education.
Sale, C., 2014. Manchester United's £350m debt could see them in trouble as UEFA step up FFP fight. [Online] Available at: http://www.dailymail.co.uk/sport/football/article-2787944/manchester-united-s-350m-debt-trouble-uefa-step-ffp-fight.html[Accessed 17 Jan 2015].
The FA, 2015. Take Part in Football. [Online] Available at: http://www.thefa.com/my-football/club-leagues/league-steps-1-7[Accessed 7 Jan 2015].
Williamsn, K. & Page, R., 2005. Marketing to the Generations. Journal of Behavioral Studies in Business 21 (2), pp. 1-8.
Yahoo Finance, 2014. Manchester United FC. [Online] Available at: http://finance.yahoo.com/q/pr?s=MANU+Profile[Accessed 17 Dec 2014].
Yip, G. & Hult, T., 2012. Total Global Strategy. New York: Pearson Education..

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