INTERNATIONAL - Manchester United parted company with coach Jose Mourinho after its worst Premier League start in 28 years, seeking to recapture the form that made it the world’s most valuable soccer team.
The club announced the departure two days after a defeat to arch-rival Liverpool left United 11 points away from the top four positions that will earn a place in the lucrative UEFA Champions League next season.
“When clubs change managers, there’s always a question about whether it’s a business decision or a footballing decision,” says Dan Jones, the global lead partner for sport at Deloitte. “In fact, these decisions are usually inextricably linked. There’s a virtuous circle, so if you make money off the pitch then you have more money to invest in the squad.”
There’s little evidence that United’s on-field woes have dented its financial position so far. A research note from investment bank Jefferies on Monday recommended clients buy the club’s shares, betting the team will continue to capitalize on a global fan base of 659 million people. The stock climbed as much as 5.4 percent in New York trading on Tuesday, paring this year’s decline to 8.3 percent.
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Manchester United led Deloitte’s Football Money League as Europe’s richest club by revenue for a 10th time in the 2016-2017 period, with the club’s success in the Europa League seen as critical in retaining the top spot. Revenue was 581.2 million pounds ($734.3 million), ahead of both Real Madrid and Barcelona. Its commercial income amounts to 48 percent of revenue and is more than 40 percent higher than the team’s closest domestic rival, Manchester City.
United has notched up new sponsors this season, such as the U.S. kitchen company Kohler, even amid mounting signs that not all is well on the pitch. Bust-ups between Mourinho, 55, and players including World Cup winner Paul Pogba have been in the spotlight.
Still, while most matches at the team’s 75,000-seat capacity stadium have been well attended, there have been occasions when seats have failed to sell out, an unusual occurrence over the past 30 years or so. What’s more, the team currently stands in sixth place in the Premier League, two places away from qualifying for the Champions League. Often sponsors have clauses that allow them to reduce payments if a team fails to reach the tournament. Adidas had such a clause in 2016.
Costly Exit
The departure is likely to come at a cost financially as Mourinho recently signed a contract extension until 2020 and could be set for a big payoff. United declined to say how much it would be paying for him to leave his position early, although a person with knowledge of the club said the amount will be between 12 million pounds and 16 million pounds.
Such a figure would put Mourinho in a similar league to Martin Sorrell, who left WPP Plc, the advertising agency he created, in April with an exit package worth as much as 20 million pounds.
Mourinho, who formerly managed Chelsea, Real Madrid and Inter Milan, joined Manchester United in 2016, winning the UEFA Europa League, the continent’s second-tier tournament, and the domestic Carabao Cup in his first season. But United’s 26-point haul after 17 Premier League games this season is its worst tally at that stage since 1990-91, according to soccer statistics firm Opta.
United’s coaching change comes just weeks before the opening of the crucial January transfer window, where teams can buy and sell players. Mourinho has already spent about 400 million pounds on players. One of the immediate challenges for the new caretaker manager, who will have the job for around six months, will be to get the most of the squad that Mourinho assembled at a high cost.
Manchester United is controlled by the Glazer family, owners of the Tampa Bay Buccaneers. The family bought the club in 2005 in an acquisition heavily financed by debt, a source of complaint at the time from fans who feared the club would be starved of investment. In 2012, the club was listed in New York, where its shares still trade.
Manchester United Plc shares rose 5.8 percent in New York on Tuesday after the company parted ways with Mourinho following the team’s worst Premier League start in 28 years. It was the stock’s biggest gain since early 2017.