Manchester United vs. Real Madrid: Big Business at the Big House

On  Saturday, Manchester United defeated Real Madrid 3-1 at Michigan Stadium in Ann Arbor, MI.  The match was attended by 109,318 spectators – a new record for the highest attended soccer contest held in the history of the United States.  A few takeaways and their implications, below:

Winning: Despite the result, both Manchester United (“United”) and Real Madrid (“Madrid”)  come away winners from their clash at “The Big House.”  Packing a hallowed ground to the max in Middle America is a tremendous feat that speaks to the truly global presences of both clubs.   Ed Woodward, Manchester United Executive Vice-Chairman, said it best in calling America the top developing market, and a core location to which the club strives to deliver.  A packed venue in Ann Arbor, capitalizing on energy from the World Cup in Brazil, speaks to the opportunities available to the best clubs around the world to build in America.

American Payday: Last week, Roger Bennet of Men in Blazers commented on how Manchester United was rumored to be looking to collect US$20M (£12M, €15M) from their travels in the United States.  That amount translates to roughly 3.5% of their 2013 annual revenue – not a huge piece of the pie by any means, but not bad for a few weeks of work in the States.  Clearly, that’s a figure that’s not inclusive of any disconnected sales stemming from the tour and its promotion (i.e., fans around the world watching the match, and purchasing a United jersey as a result watching).  At the tour’s conclusion, United will have had a very profitable time in America.

Knowing their rumored payout, it’s safe to presume that Florentino Pérez would be looking for a similar sum in return for bringing this season’s Champions League winners to America.  Mr. Perez declined to comment on my inquiry in the mixed zone after the match on Saturday, but make no mistake about it, especially in a World Cup year: this preseason tour is a business trip, for every side involved.

Photo courtesy AP

Photo courtesy AP

Manchester Money Machine: Just about every aspect of Manchester United’s 2014 US Tour can be traced back to a financial motivation, or said differently, a means to further build Manchester United’s presence in the states.

In Michigan, they stayed in Detroit, opting over a stay closer to the stadium, perhaps in connection with General Motors’ global headquarters, where they made an appearance during their stay.  It’s possible that the Manchester United front office spoke with United Manager Van Gaal after his bemoaning of the preseason tour in the United States a few weeks ago; in Michigan he sang a different tune, highlighting the great experience they’ve had in America, connecting with their fanbase, playing in front of 300K fans in just a few matches, and squaring off against the world’s best.  There was no further mention of the lengthy travel, the grueling schedules, and the lack of rest for players, as he noted in Los Angeles.  Both United and General Motors used this tour, and this stop in Motor City, to showcase their presence and partnership for the world to see.

Promise in Middle America: Relevent Sports, the match’s organizer, did their homework in recognizing the region’s enthusiasm for soccer, despite the lack of an MLS franchise.  As a result, they put on an unforgettable display.  It’s a match that almost didn’t happen at the Big House; originally announced, then recalled, then reconfirmed.  It’s possible that Stephen Ross, owner of Relevent Sports & the NFL’s Miami Dolphins, pulled a few strings to make it all work.  It’s entirely speculative, but he’s a University of Michigan graduate and major donor with his name on a building or two around campus; stranger things have happened.  However it transpired, a calculated risk paid off.

MLS is surely aware of the potential for some of the soccer markets in Middle America – like Detroit and St. Louis- where sports teams are the main attraction and embedded into the culture of the city.  There’s an opportunity out there – the crowd at the Big House proved it.

Ann Arbor, a Soccer Town: With the crowd that showed up to the match, it poses the question as to what future lies in soccer at the Big House, the third largest sporting venue in the world.  For the county of Washtenaw, where Ann Arbor is located, the estimated economic impact for the past weekend was US$15-20M (~€12M, ~£10.5M).  That translates into a worthy investment for the state of Michigan and local economies, and something worth considering in the future.  Time will only tell, but at a glance, the biggest negative in attracting top clubs is the surface.

In Friday night’s pre-match press conference, both Van Gaal and Rooney noted the poor conditions of the pitch, a temporary sod surface instead of Michigan Stadium’s usual turf.  To their point, a few pitch related difficulties were evident during the contest.

Other than that, the venue has tremendous potential for more matches: a large capacity, a clear interest in the sport in surrounding areas, and a city that’s accustomed to handling a hundred thousand people trying to access the city simultaneously.

A World Cup qualifier at The Big House?  Maybe even a host city in the event the United States receives the 2022 bid amidst controversies in Qatar? With the pitch, who knows, but for sure, any major soccer event in the future at Michigan Stadium can be incredible, from both a sporting and economic perspective.

Silver Lining: United will be absent from European competitions this year – however, Van Gaal noted after the match that he sees both sides of the coin.  With a lighter schedule on his hands, Van Gaal will be able to focus on rebuilding the side and steering the club back to prominence.  Those efforts will be facilitated by easier travel schedules and more rest for players; it should strike the right balance to bring the squad back to Europe, and challenge for a Premiership crown.

Financially, no Champions League will mean a loss of revenue, but their lack of participation in Europe might go unnoticed in light of their lucrative endorsement activity, most notably kit sponsors General Motors (currently) and Adidas (starting in 2014-2015).

Going forward:  By the looks of it, and as a surprise to no one, preseason tours  in the States should be around for the foreseeable future.  Both managers, Van Gaal and Ancelotti, praised the environment and overall tour after the match.

For United, a return to the States next summer wouldn’t be a surprise, especially given the overwhelming response they had this go-around, and perhaps in connection with the General Motors relationship.  For United and Madrid, it’s not a matter of “if” a preseason tour will be successful, it’s “where.”

Marca reports that Madrid will head to China next summer for their preseason preparation in collaboration with Relevent Sports, potentially with a number of other large European sides.  Conflictingly, Ancelotti noted during his post-match comments that he expected Real Madrid to return to America in the upcoming summers.  Time will tell.

In America, pay special attention to the opportunities for large, natural grass field venues, as players largely prefer the surface over artificial turf and temporary sod arrangements. With that in consideration, stadiums like the Rose Bowl in Pasadena, the Cotton Bowl in Dallas, and Sun Life Stadium in Miami make for ideal locations, with strong ethnic influences in metropolitan areas, and the potential to host high capacity crowds.  These are revenue maximizing characteristics that can send a bigger payout to all participating parties, all while catering to a naturally inclined local population.

Eyes on the Prize: Naturally, Manchester United and Real Madrid will continue their preparations for their upcoming campaigns.

The Spanish side has already arrived in Madrid, where the entire squad is reuniting in the coming days ahead of the UEFA Super Cup versus Sevilla.  The match is tabbed for August 12, in which, Ancelotti noted, new acquisition James Rodriguez will be looking to make his debut.

United wrapped up the their US tour with a 3-1 victory in the Guinness International Champions Cup final versus Liverpool last night in Miami.  A week from today they’ll face off against Valencia in the REUNITED match in Manchester, a welcome home party for the side after a busy summer.  The Premiership kicks off on Saturday, August 16, when they’ll host Swansea at Old Trafford.

 

What do you think about the financial implications from the Manchester United vs. Real Madrid game at The Big House? Let us know in the comments section below, or via Facebook or Twitter.

 

Reporting on the business side of the world's game.