Football’s cash derby

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Manchester in the north of England has a number of claims to fame. The birthplace of the industrial revolution; a fountainhead of musical outpouring and two football clubs amongst the planet’s best-known teams in a sport often referred to as ‘The World Game’.

In the blue corner we have Manchester City; in the red Manchester United. Not only do the two teams have different coloured shirts, their business models are also very different, even if they both seek to maximise returns from the investments of their owners.

Raheem Sterling of Manchester City and Marcos Rojo of Manchester United during the Premier League match between Manchester United and Manchester City at Old Trafford on December 10, 2017 in Manchester, England.
Raheem Sterling of Manchester City and Marcos Rojo of Manchester United (Photo by Robbie Jay Barratt – AMA/Getty Images)

“The different models represent differences of opinion as to whether football clubs are to be ‘cash cows’ to fund other activities or long-term investments.”

‘City’ is well on top of ‘ManU’ this season having set an English Premier League (EPL) record for most consecutive wins and toppling their cross-town rivals in the process. But is their business model better?

The EPL has negotiated over 80 worldwide broadcasting deals on behalf of all 20 teams and the Manchester derby in December – won by City – was reputedly watched by an audience of around 900 million people in 212 countries.

The crowd in the stadium was over 75,000 including 2,000 Manchester United fans from Norway. Overseas fans who wish to enjoy the ‘atmosphere’ of an EPL game are increasingly seen in attendance.

Indeed, the UK’s official tourism body conducted a study in 2015 which revealed more than 800,000 international visitors went to an EPL match in that year, spending in total nearly £700 million.

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Steve Worthington is a Visiting Professor at the Business Research Institute

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