Manchester United, the record 19- time English
soccer champion planning an initial public offering later this
year, has climbed above Real Madrid in a survey of Europe’s
top 30 teams by brand value.
The annual report published by Brand Finance Plc gives United a brand valuation of
412 million pounds ($644 million), up 11 percent from last year.
Real, which has a policy of signing some soccer’s biggest names
like Cristiano Ronaldo and Kaka, has a brand estimated to
be worth 401 million pounds, with European champion Barcelona third
at 392 million pounds.
United’s strength has been underpinned by its success on the
field, where it’s won the Premier League in four of the last five
seasons, and the results of a commercial division that enjoyed an
annual increase of 27 percent to top 100 million pounds for the
first time. Earlier this month the team announced a sponsorship
agreement for its training apparel worth 40 million pounds with
logistics company DHL.
“The commercial team at United have developed such a compelling
and well-protected brand that global partners are willing to pay
premium sums to be affiliated with the champions,” said Brand
Finance, which advises companies like brewer SABMiller Plc and bank
Standard Chartered Plc. “In the upcoming IPO, we would expect the
brand strength of United to feature prominently in the investment
story.”
United is planning to raise $1 billion later this year by
floating as much as 30 percent of the club in an IPO on the
Singapore stock exchange.
While United may have a stronger brand than Real, the team owned
by the U.S.-based Glazer family isn’t making the most money. It’s
behind both Real and Barcelona in terms of revenue, according to a
list published by accountant Deloitte LLP in February. Real last
week announced record sales of 480 million euros ($654 million),
more than any other team in professional sport. United had revenue
of 331.4 million pounds, according to a Sept. 1 filing.
Brand Finance said the most improved soccer brand in the past 12
months is United’s cross-town rival Manchester City. The team owned by billionaire
Sheikh Mansour Bin Zayed Al Nahyan has lavished millions of pounds
on talent to make it a contender at home and abroad and has
qualified for Europe’s lucrative Champions League for the first time.
In August, City signed the biggest partnership deal in sport, a
decade-long agreement worth more than 350 million pounds with Abu
Dhabi-based airline Etihad. The report ranks City 11th, up from
19th, with a brand value that’s almost doubled to 106 million
pounds.
City’s rise can be attributed to a combination of “huge
sponsorship deals, star signings, Champions League football and a
first trophy in 35 years,” the report said.
Bayern Munich, Germany’s
richest and most successful team, is fourth on the list, ahead of
London teams Chelsea and Arsenal. The Italian trio of AC Milan,
Inter Milan and Juventus and Liverpool complete the
top ten. The total brand value of all 30 teams is worth 1.5 billion
pounds, according to the report.
Still, that figure “alone has little immediate application to
football clubs,” according to Brand Finance. Clubs must invest in
“servicing the brand” if they are to monetize the strength of the
brand. Manchester United’s commercial division has grown from two
to more than 40 since the Glazers bought the team in 2005.
“Within the branding industry they are not doing anything
unique,” Dave Chattaway, one of the report’s authors said in an
interview. “They are just taking best practice from companies like
Apple, Prada, heavily branded industries and bringing it into the
sports industry.”
The report, which is in its 6th edition, defined “brand” as the
teams’ trademarks and intellectual property. Of the team’s that
make up the top 30, Brand Finance has undertaken paid consultancy
work for Manchester United and Portugal’s Benfica.