Manchester United’s ability to define new sponsorship categories has left the club feeling “bullish” about the prospects for its sponsorship business, according to group managing director Richard Arnold.
Arnold delivered the comments during a call with investors that coincided with the announcement of the club’s disappointing Q2 earnings.
United’s second-quarter financial results revealed revenues dropped by £40.2m ($52.25m/€48.17m) to £168.4m over the three-month reporting period to December 31, 2019, primarily due to the club’s failure to qualify for the Uefa Champions League.
However commercial income rose 7 per cent over the three months, thanks to recent multi-year sponsorship deals with companies like Mondelēz and the Alibaba Group.
“We continue to be successful in segmenting and defining new, previously unexplored categories in terms of the work we’re doing,” said Arnold, referencing the club’s work with the Marriott hotel chain among other sponsors.
“The work that has gone on the Marriott affinity programs, the work that’s going on with Kohler, the bathroom and kitchens organization as well as generators, [demonstrates] the appeal of what we offer in categories that perhaps other people haven’t explored and been successful in,” he said.
Arnold said the club was also optimistic about the number of open sponsorship categories in its portfolio and its ability to fill them.
“If you look at soft drinks, consumer electronics, for example, as well as a number of the technology and software verticals, there continues to be a big opportunity in open, existing categories,” he said.
Arnold argued that investments in the club’s digital output and its ability to target and segment audiences had positioned it to “compete with the biggest platforms in the world”.
“The combination of the scale of what we offer globally, the ability to be a single solution on both live media across almost every TV set in the world, as well as having the most engaged digital footprint in the world, both in [the] Chinese ecosystem as well as Western ecosystems, means that we’re fairly uniquely positioned,” he said.
He said he was also heartened by the club’s “industry-leading” sponsorship renewal rate and its ability to leverage its IP to the benefit of sponsors without alienating fans. He argued all of these factors would help the club to benefit from a “polarization” in the sports sponsorship market.
“It is a competitive market in terms of the number of properties out there, but I don’t think it’s genuinely competitive in terms of the offering we have relative to others, and we’ve seen a sort of polarization in terms of the strong getting stronger with regard to that, and that’s benefiting us,” he said.
“And we’re seeing that in the general success rates we’re having across our sales process as a whole. So on the whole, we continue to be bullish in respect of the current and future prospects of the sponsorship business.”