Test for record signing
Pogba deal: Gamble or good business?
Manchester United’s wooing of Jose Mourinho (pictured), the Portuguese former manager of Chelsea and Real Madrid, was itself a headline-filled drama.
His signings have eclipsed his own arrival at Old Trafford. The Swedish international Zlatan Ibrahimovic and now the Frenchman and world’s costliest footballer Paul Pogba underline a determination to regain the club’s dominance of English and European football.
Finishing the forthcoming season outside the Champions League is clearly not on the board’s agenda. The club will say its fans deserve only the best.
Its shareholders and its sponsors might just be a more demanding customer base.
In Ibrahimovic and Pogba the club has not only signed two of the world’s top players, it has brought in athletes who are global Box Office. They will sell merchandise and attract an audience wherever the club plays.
They already have a strong line in personal endorsements. In June 34-year-old Ibrahimovic released a range of sportswear, A-Z, and he also boasts his own fragrance, Zlatan. He is the 23rd best paid athlete on the planet, expected to earn an estimated $37.5m this year.
In March, 23-year-old Pogba was became the new poster boy for Adidas which just happens to be one of United’s biggest sponsors, pumping ££750m into the club.
Some claim the German company and other club sponsors including Chevrolet were instrumental in Pogba returning from Juventus for a second spell at Old Trafford. There is some doubt about this, although the sponsors clearly want a return on their investment. How better than to provide the sort of funds that allow the club to buy the top players.
Adidas alone is heavily marketing itself in six cities – Los Angeles, London, New York, Paris, Shanghai and Tokyo – where United has a strong fan base. Expect to see regular tours.
But even signing the world’s best players may not be enough. They must also have global appeal as personalities. Ibrahimovic ranks 72nd on the Forbes Celebrity 100 list while Pogba’s 13.2 million followers across social media has helped make him the most talked about player in the UK across social media.
What fans and financial analysts alike are now asking is whether the signing of such players is good business.
Manchester United will book around £500m in revenue for the 2015/16 financial year. A £100m deal for Pogba, including £89m transfer fee and add-ons, therefore amounts to 20% of turnover.
How does that compare to past signings?
In 2003 Manchester United paid Leeds United £30m (at today’s exchange rate of 1.3) for Rio Ferdinand. Turnover that year was £170m, representing 17.7% of annual revenue.
Go back to United’s hey-day when it featured the trio of Best, Law and Charlton and the figures are not that much different. Figures are difficult to come by, but in 1962, when United’s turnover was below half a million pounds, it paid Torino £115,000 to sign Denis Law, or roughly 20% of revenue, the same ratio shelled out for Pogba.
Manchester United, its fans and its sponsors can only hope that French international can achieve the same cult status on the pitch as the illustrious Scot.