The Premier League has outdone itself once again, as one of its famous clubs, Manchester United, signed global superstar, Paul Pogba, at a record breaking £89 million. He will be transferred from Juventus to his once home stadium of Manchester United, in what will go down as one of the largest transfer deals in soccer history to date.
Already one of the richest soccer leagues in the world with massive TV signing deals and commercial cash reeling in, this record transfer fee only reinforces what is already well-known: the soccer world is turning into a business empire. With their ever increasing commercial power, Manchester United looks to be at the forefront.
According to ESPN, the previous record transfer deal was set by Real Madrid when they acquired Gareth Bale from Tottenham Hotspur for a then record €100 Million, another deal criticized by many at the time. So why has the soccer world gone mad, spending copious amounts of money for players? Is this move by Manchester United understandable from a business perspective? Was the record amount necessary? Absolutely. Some players and fans are even praising the signing of Pogba, as they rush to social media to support the club's decision with #POGBACK sweeping the Twitter world. With a club that has so much commercial power, it makes absolute sense why they've able to make such hefty investments in talent they deem worthy (from a business perspective). It coincides with their highly valuable brand of being the most lucrative soccer club in the Premier League.
Manchester United is a world renowned soccer club, taking the title of the second highest earning soccer club in the world for 2014-2015. Their million dollar deals with sponsors like Chevrolet, Aon, and Adidas helped win them that title. But not only that. It's the brand they've been building along with the capital they've acquired that allow them to make these sort of investments in talented stars. If you take it back a decade, you'll understand a little bit more about why this club has grown to unprecedented financial success, and why the Premier League has grown into such a large business.
Manchester United solidified their status as the top-tier competitor back in 1992 when the Premier League, England's competitive soccer league, began. That's when Manchester United made its mark as one of the most successful English clubs, both on the pitch and financially. The club would go on to win four of the six titles in the Premier League and win the FA cup twice. Their track record on the pitch is undeniable, they've earned the title as the best and that's when the financial success would start to roll in.
According to London Business School, "between 1992 and 1997 the club generated income of £249m, of which £69m was spent on its wage bill and £66m reported as profit," and sponsorship deals would only come to increase the already profitable club. Further resources would pour in for the club when in 2005, Manchester United would be bought by the Malcolm Glazer family, an American businessman, for $1.47 billion. The Glazers would go on to take Manchester United
From their success on the pitch, commercial revenues escalated through the several new sponsorship deals that Man U acquired, as well as broadcasting and match-day revenue. Their commercial success was unprecedented. Big moments included the club's lucrative shirt sponsorship deal with Chevrolet and "record breaking" kit supply deal with Adidas, which was signed in 2014 and is worth £750m to United over 10 years. Man U is a huge part of the Premiere League, which has a record breaking £5.1 billion deal for the UK broadcast rights, according to the BBC.
"United is a club long associated with glitz and glamour, known as 'Moneybags United' by the FA over a century ago, bankrolled by benefactors and frequently setting spending records in the non-stop pursuit of glory. This is a club steeped in opulence and prone to dramatic, big-name transfers" (fan-blog). Acquiring a player like Pogba, who's a strong midfielder Man U so desperately needs, yet has enough spice on the field for their brand, makes him a perfect fit for a club that's all about showing off its big names and bold ambitions.
Pogba has established himself as one of the most highly rated soccer players in the world when he won four consecutive Serie A titles at Juventus, his previous club. He's an obvious talent to be reckoned with and both his fans and team mates know that. He'll fit right in with the likes of Zlatan and Rooney and feasibly lift Man U out of its championship drought. Pogba surely will prove his value both financially and on the pitch. And as Man U is set to make millions in the coming years, investing in players like Pogba will turn into a bargain deal. Pogba is poised to increase advertising for Manchester United and Adidas, their main sponsor, and help the club stay at the top of the competition. The burst in social media posts is yet another indication of the success this deal has already made the club, putting them at the top of the headlines in the soccer world.
Manchester United's brand likes the attention and record setting headlines they've seen in the past couple weeks. They are the more prestigious club, they have the money, and they'll get the star studded talent for anything. These high-profile deals uphold their brand strategy of being at the top of their league and their not backing down anytime soon.
Consequently, Paul Pogba was necessary to keeping its lucrative status and continuing to ensure success on the pitch with young talented global superstars. This seemingly crazy deal will surely increase Man U's brand as being one of the most exclusive soccer clubs in the world, following the likes of Real Madrid, Barcelona, and Bayern Munich, who spent millions for some of their own players as well. The reputation boost of acquiring these talents for so much will leave a lasting impression in the soccer world. Yes, the Pogba deal is mind-boggling, but it makes perfect sense for a glamorous club able to spend the cash necessary to keep a lasting impression in their fans minds. So with the soccer business booming, it looks like these transfer deals will only continue to skyrocket.
SOURCES:
http://www.bbc.com/sport/football/37045474
http://www.theglobeandmail.com/sports/why-did-manchester-just-pay-a-world-record-159-million-for-paul-pogba/article31333687/
http://www.standard.co.uk/sport/football/paul-pogba-worldrecord-transfer-makes-sense-because-manchester-united-will-get-return-on-89m-a3315786.html
http://www.campaignlive.co.uk/article/1373051/manchester-united-will-become-highest-grossing-football-club-ever
