Football hits bottom for Greater Manchester economy

If further proof of Greater Manchester’s preeminence in English football was needed, next weekend’s FA Cup final will provide it.

Some 200 miles on the motorway, and just two weeks after Manchester United sealed their 20th league title, Manchester City will meet Wigan Athletic at Wembley to contest the trophy.

But it is the financial impact in the Northwest that is perhaps more remarkable. New research has revealed that Manchester enjoys the economic equivalent of an Olympic Games every four years thanks to its local football clubs – without the need for large investments in infrastructure.

The study – carried out by the Sport Industry Research Center at Sheffield Hallam University and Cambridge Econometrics – found that football contributed around £ 330million in “gross value added” to Greater Manchester’s economy in 2010 -11, while it had another Premier League club, Bolton, than now.

For example, the global profile Manchester has acquired through its football teams has been valued at over £ 100million per year, in terms of equivalent ad spend.

Sir Richard Leese, head of Manchester City Council and fan of the city, says this profile can translate into jobs.

“In a global environment where we compete with cities around the world for investments and jobs, this is a huge competitive advantage,” he says.

Today, football directly supports 8,500 jobs, many of them part-time, or the equivalent of 5,000 full-time jobs.

United, owned by the Glazer family, last week increased its projected annual adjusted profit before interest, taxes, depreciation and amortization from £ 3million to £ 110million, on expected revenue of 360 Million pounds sterling. It alone employs 800 people. The city employs nearly 500 people.

However, it is Manchester’s football product audience that has the potential to generate the most economic activity.

The Manchester derby last May, when the top two clubs competed for the league title, was watched by around 600 million spectators worldwide, including 1 million in the United States, a record for a Premier League game.

As companies try to reach these audiences, club sponsorship deals have mushroomed.

After Standard Chartered, the Asian bank, has paid Liverpool £ 20million a year for jersey sponsorship as of 2011, Chevrolet, the American automaker, has reportedly paid £ 50million a year for a deal with Manchester United.

In addition, the Old Trafford club signed an eight-year contract worth nearly $ 240 million with Aon, the U.S. insurance broker, to sponsor their training ground and training kit. – a contract unimaginable a few years ago.

In Manchester City, Abu Dhabi’s Etihad Airways – which is also home to the club’s owners – has entered into a sponsorship deal estimated at £ 350million over 10 years covering the stadium, kit and a new training ground.

The £ 100million Etihad ‘campus’ aims to create a Barcelona-style football academy to develop young players and regenerate one of Manchester’s most disadvantaged areas.

Plans for the city have already attracted stores such as WM Morrison, the retailer, and Subway, the sandwich chain, in the region. Etihad also opened a customer service center near Manchester Airport which provides 200 jobs.

Alex Roy, a researcher at the Commission for the New Economy, also points to the group of clothing companies still based in the northwest. Umbro, now on sale by Nike, was founded in the region, as was Reebok in Bolton. Adidas is headquartered in the UK in Cheshire.

James Dow, founder of Dow Schofield Watts, a professional services firm, has seen the money in football swell since the 1990s, when Manchester United floated, and as a young accountant he helped Francis Lee take over a Manchester City in trouble.

He points out that even player salaries can benefit the region. “The money sticks,” he says. “He goes to golf clubs, restaurants and car dealerships. These players also have their own business interests. It gives investment managers a job.

Their performance also increases the revenue of hotels and tourist attractions. When Manchester United hosted Real Madrid in the Champions League in March, hotel rooms in the city were full. On regular match days, the average occupancy rate drops from 70% to 85%.

These international visitors spend an average of £ 800 on their trips.

Mr Roy believes that companies should also seek to exploit the “Manchester brand”, by inviting foreign partners to matches. It has already helped local universities become some of the most popular with Chinese students, he said.

For smaller clubs in the region, meetings with United and City therefore take on a value far beyond the sale of tickets. If Wigan could choose between an FA Cup victory and avoid relegation from the Premier League, Mr Roy is unequivocal on what would be worth the most. “From an economic point of view, it has to be the Premier League.”

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