How MUFC can get money's worth from Zlatan & Pogba

After the marquee signings of Paul Pogba and Zlatan Ibrahimovic this summer, Matt Monaghan examines whether Manchester United can earn back the money spent on them.

Matt Monaghan
by Matt Monaghan
15th August 2016

article:15th August 2016

Pogba and Zlatan.
Pogba and Zlatan.

Records have tumbled this summer whenever Paul Pogba has been involved.

The France midfielder was at the centre of this summer’s biggest transfer soap opera, a historic £89 million (Dh425m) fee taking him back to Manchester United four years after he ran down his contract to join Juventus. Yet for his new employers, an even-more telling figure was released on Saturday night.

Fuelled by the now ubiquitous #POGBACK, the Red Devils’ post which announced the world’s most-expensive footballer wearing the 2016/17 adidas kit captioned “Home” is the most retweeted from the club’s official Twitter account with 89.2k shares. They also happily revealed the 637k likes on their Instagram page of the same image put it at the top of their charts.

These announcements must have been music to the ears of executive vice-chairman Ed Woodward and group managing director Richard Arnold. Even better that the previous high-water marks had been reached by fellow fresh arrival Zlatan Ibrahimovic, the iconic Sweden centre forward recruited in July once his deal at Paris Saint-Germain expired.

The pair are now tasked with using the full might of United’s ceaseless commercial machine – which has signed industry-leading arrangements with shirt sponsor Chevrolet worth £357m (Dh1.7 billion) from 2014-2021 and kit manufacturer adidas for a minimum £750m (Dh3.6bn) from 2015-2025 – to recoup the cash laid out.

A key topic keeps appearing of whether Pogba and Ibrahimovic can earn back the money spent on them? For Professor of Sports Enterprise/Director of Sport Industry Collaboration Zone Simon Chadwick of Salford University, the truth lies in whether they can positively contribute to the club’s overall bottom line rather than earning cash directly attributable to themselves.

“In simple terms, United will be placing Pogba and Ibrahimovic at the centre stage of their social
media activities,” he tells Sport360. “United will be seeking to create a brand identity for each of the players, which the club will then push out through their social media channels.

“This identity will inevitably be linked to the sale of merchandise connected with each player. One should also expect United to utilise the players as a means of accentuating a set of core values.

“Directly attributing a revenue stream to a player is always going to be a somewhat spurious, unscientific exercise. More realistically, United (like other clubs) are seeking to create a constellation of player brands that benefit the parent brand by winning.

“I am not entirely sure that Ibrahimovic is a long-term commercial proposition. At one level, I think he will provide a short-term cash hit.

“As for Pogba, we should expect to see the club aligning him with urban millennials who are strong on image and attitude, and who spend big on their clothing – particularly their footwear.

“If United can get the brand proposition and positioning right, then so long as Pogba remains fit and is successful he is likely to become a cash cow for the club.”

The current year is looking likely to be a lucrative one for United and adidas. Deloitte’s hugely-respected Football Money League has predicted that the Premier League giants will end Real Madrid’s 11-year stay in first place thanks to booming broadcast and commercial revenues when their next report is published.

With this coming during a period in which Champions League qualification has been missed in two of the last three seasons and only the FA Cup was won, clear upsides still exist to boost this figure.

Herbert Hainer, the outgoing chief executive of adidas, cited a 17- per-cent jump in purchases of its football products as evidence of the “quality of our interactions with people on social media” as it looked on course to beat the overall sales target of €2.5bn (Dh10.3bn) in the sector for 2016.

Central to the use of these channels was the vibrant “blah, blah, blah” campaign which poked fun at the Pogba/United hysteria. It also tied into its popular #FirstNeverFollows series, with featurettes being made for each of the six biggest Three Stripe-sponsored clubs – Madrid, Bayern Munich, United, Chelsea (for whom a mutual early termination was agreed in May), Juve and AC Milan.

The worth of social media in proliferating the brand is huge.

A combined tally of 1.1m retweets and likes have been registered on tweets related to the @paulpogba, @ManUtd and @adidasfootball Twitter accounts alone since July 27. For sponsorship and marketing consultant Nigel Currie, this focus details how brands now want to aggressively promote elite partners in a selective manner.

He says: “I think it shows that the big kit manufacturers are adopting a new approach.  They are less concerned about securing all the best athletes and teams and are now looking more to secure fewer all encompassing partnerships which enable them to do more.

“For example, the Puma deal with the Jamaica athletics team is all about Usain Bolt, but has the ability to be used in a wider way.”

Only a small amount of this will come from shirt sales for either player, with United’s agreement with adidas granting them just five per cent of the monies earned from each purchased. With adult male jerseys priced at £68 (Dh322.9) on, to cover Pogba’s fee alone an unrealistic 26,200,000 shirts would need to be sold.

This figure is further weakened by the fact L’Equipe have stated an 80/20 split has been agreed between club and player on image rights, estimated to be worth €35m (Dh143.5m) per annum.

Extra sponsorships are the key, with the Sunday Times reporting that the Old Trafford-outfit expect to bring in £40m (Dh189.8m) more during the next year on the back of Pogba’s arrival. United generated €263.9m (Dh1.1bn) in commerical revenues during 2014/15, according to Deloitte.

Social media is again being used to build the hype, with Pogba and Ibrahimovic regularly interacting during the past few days to a combined following on Instagram and Twitter of nearly 32m.

New innovations have been made by those involved.

United announced the world record signing of Pogba at 00:35 UK time last Tuesday. The club insisted this was coincidental, but it happened to catch the early morning commute in East Asia and prime time in the United States.

A tie-in between the 23-year-old and emerging UK grime artist Stormzy has also provided positioning in the millennial market segment. Underpinning all these moves for adidas is the ongoing ‘brand war’ with Nike.

If Pogba can successfully be positioned as the heir apparent to football’s biggest cash generator in 29-year-old Barcelona and Argentina forward Lionel Messi, huge sums can be made.

“There’s a classic battle in the sportswear market, involving Nike and adidas – Barcelona v Real Madrid, Internazionale v AC Milan and now Manchester City v Manchester United,” Chadwick says. “It is highly likely that adidas exerted some pressure to ensure that United signed a high-profile adidas property during the transfer window.

“But adidas’ forward planning goes beyond this; what the company is essentially doing is to succession plan.

“That is, as Messi moves towards his 30s and inevitable retirement, adidas will want a new star to replace him.

“Pogba is adidas’ play; in five-year’s time, expect the Frenchman to be centre stage in the brand’s global marketing activities.”

Adidas have come through a period of recovery since they abandoned a target of €17bn (Dh69.7bn) sales for the next year in July 2014. Pressure has been placed on United to replicate this feat.

Hainer stated in January that the ponderous playing style under now-departed manager Louis van Gaal was “not exactly what we want to see”, with the Dutchman’s successor Jose Mourinho and his lavishly-assembled squad now requiring – at a minimum – a return to the Champions League.

For Philipp Vetter, economics correspondent for German daily Die Welt/Welt am Sonntag, success on the pitch – like that experienced across more than 20 years under Sir Alex Ferguson – is key to making this arrangement work.

He says: “The deal with Manchester United was widely reported in Germany and it is probably the most important for adidas in their football business.

“For adidas, it’s very important that their teams not only perform well in their national leagues, but in the Champions League as well.

“That’s probably why there is pressure on Manchester United to deliver better results.”