Bharath Rammr
Manchester United announced one of the biggest shirt sponsorship deals in the history of the game only last year. The contract with the Adidas is worth around £750 million over a period of 10 years, thus giving United £75 million each season. However, the club are reportedly facing an income loss of around £20 million from this figure if they fail to qualify for the Champions League next season, reports BBC.
United have confirmed that a clause in the contract allows Adidas to drop the sponsorship amount if United failed to qualify for the Champions League in successive seasons. After having already missed out on the premier European competition for this campaign, the club are struggling in a disappointing sixth place under the regime of Jose Mourinho. Even though it is still far from being decisive, there is a danger of the Red Devils being absent from the top-level European competition once again. United’s chief financial officer Cliff Baty said:
“There is a clause in the Adidas contract that applies if we are missing from the Champions League for two years in a row.
“An example would be if we [were due to receive] £70m [in a given year], we would not receive £21m.”
Barcelona recently signed a four-year shirt sponsorship contract worth around £50 million each season, but it is still way short of United’s record deal. Chelsea comes third in the list with £40 million being offered per season by their sponsors Yokohama.
A decade ago, United would not have panicked about a top four place when the season has not even reached the Christmas fixture schedule. Now, though, the scenario is completely different with a lot of competition in the Premier League meaning that finishing in the top four is far from certain. The top four is occupied by Liverpool, Arsenal, Manchester City, and Chelsea. Tottenham and United closely follow these four clubs. Going by recent form, United are probably the weakest amongst the six clubs.
Manchester United have some of the highest revenues in world football and they are consistently placed in the top three richest clubs around the world by Deloitte. Yet, even a club of such a magnitude cannot afford to be without the Champions League revenue stream.
Apart from providing more than £30 million just for participation in the group stages, there is the associated prestige that becomes very crucial when it comes to attracting top players. Combined with the prospect of losing £20 million just from the shirt sponsorship, United could be easily without £75 million – when factors like matchday income and commercial revenue are taken into account – for each season they spend outside the top European competition.
United are currently in the Europa League, and manager José Mourinho reckons that it is a competition that should be taken seriously since it provides the opportunity to directly qualify for the Champions League group stages.
The club takes on Arsenal this weekend looking to build on their 3-1 win over Swansea before the international break.
