On November 23, Manchester United Football Club officially announced: "Cristiano Ronaldo will leave the team immediately after consultation between the two sides." As soon as the news came out,$Manchester United (MANU.US)$The share price rose rapidly after falling to an intraday low.

Can it go up without Ronaldo? You know, when the World footballer of the year returned to Manchester United in August 2021, the company's share price rose by 11% at one point. Dozens of greetings from the capital markets prove Ronaldo's importance to Manchester United.

But the uptick this time is more due to another big news-"Manchester United may be for sale".

On the same day, after the news that the Glazer family might sell the club, Manchester United's share price rose by more than 17%, and the market capitalization at one point increased by nearly $400 million.

I. the commercial operation of football clubs

The news that Manchester United may be for sale has been officially confirmed.

"the board of directors will consider all strategic options, including new investments, sales or other transactions involving the company," the club wrote in a statement distributed on its website. "The purpose of this strategic choice is to expand the club's commercial operation around the world.

Yes, it is the business operation that echoes the club.

As an organizational form of football professionalization, the term "club" is far from as easy and pleasant as it sounds, and its establishment indicates that football has become a business that requires commercial operation.

1. Income

If you do business, you must have income.The income source of football club can be divided into match day income (Matchday), commercial income (Commercial) and broadcast income (Broadcasting).

First of all, the income of the game day needs to be based on a large number of fans.According to Deloitte Football Money League 2022, Manchester United has more than 74.9 million followers on Facebook Inc alone, with a total of 176.8 million followers on global social platforms.

As of June 30, 2022, 2021 and 2020, Manchester United's game-day revenues were £110.5 million, £7.1 million and £89.8 million, respectively, accounting for a large portion of the total revenue.

When there was no epidemic and there was no need to close the game, China's Evergrande Club also earned 57.26 million yuan from tickets in 2019.

The second is business income.

As of June 30, 2022, 2021 and 2020, Manchester United's commercial revenue accounted for 44.2%, 47.0% and 54.8% of the total revenue respectively, including sportswear, remote connectivity software, blockchain, spirits, cars, hotels, gaming and other industries.

Finally, there is broadcast revenue.

The greatest credit for the introduction of broadcast media into football should be attributed to Joseph S. Blatter. Despite the scandal, as the leader of FIFA, under his efforts, television organizations successfully participated in football matches, which had a considerable impact on the promotion of football.

According to Deloitte, four clubs accounted for more than 40% of their broadcasting revenue in the top five for revenue from 2016 to 2020, making it the most important revenue segment.

Of course, the involvement of broadcast media and streaming media not only benefits the club unilaterally, but also wins huge traffic for those platforms that have access to live broadcast, broadcasting and secondary creation.

Just like this year's World Cup, Douyin won the copyright, which is the only one in the short video platform, but can not see any World Cup content in the video account, which is already in a weak ecological and commercial content. Now it has been pinned down again. Douyin, on the other hand, will enjoy a full month of traffic dividend.

2. Cost

Three items of income support the daily operation of the club, and when athletes earn a living from football, as an employment agency, one of the main costs of the club is the wages paid to the players.

Lionel Messi, who works for Paris Saint-Germain, ranked first with an annual salary of $41 million, followed by Neymar da Silva with an annual salary of $36.5 million, according to 2022 statistics. Ronaldo's salary was $36 million a year before breaking up with Manchester United, ranking third.

According to statistics from Sportrac published by the Sun, the total annual salary of Manchester United players will reach 227 million pounds in 2021, far surpassing Chelsea Football Club, which ranks second.

You know, Manchester United's total revenue in 2021 is only 494 million pounds, but knowing that the performance and popularity of players are the main drivers of the club's business, Manchester United are willing to spend a lot of money and offer the most expensive salary in order to attract and retain key talent.

There is hardly much "technical content", and the input and exit of income and cost constitute the business operation model of the football club. But as non-traditional enterprises, how do they measure the investment value of those institutions or individuals who are running or intend to take over the club?

II. Investment value

1. The perspective of the Graz family.

From his point of view, the Greys, who are mired in a double crisis of trust and economy, may be more cost-effective to sell the club than to keep it.

Manchester United's last Premiership title remained in 2013 during the 17 years at the helm of the Greys family. The unsatisfactory performance of the stadium, coupled with Cristiano Ronaldo's "outspokenness" in the interview, made the fans almost lose their trust in the Graze family.

According to public information, the club's second largest sponsor has asked for an end of sponsorship, while the two sides just signed a contract worth 240 million euros last year, which will cause serious losses to the club once the partnership is terminated.

The sponsor revealed in an interview that the company's net profit in 2021 was 42 million pounds, but the sponsorship fee paid to Manchester United was as high as 45 million pounds. In addition to no economic return or even losses, Ronaldo's departure was also an important reason for the sponsors to terminate the cooperation.

If you choose to sell the club, it will not only make people happy, but also make a lot of money while stopping the loss.

Judging from the financial data for 2018-2022, Manchester United made a profit only in 2019, with a total debt of 636.1 million pounds as of June 30, 2022.

Malcolm Irving Glazer paid 790 million pounds for Manchester United that year, and not long ago, after receiving an offer of 6 billion pounds, the Greys family raised the target price for sale to 8.25 billion pounds, which is much higher than the market value of Manchester United, which can not only help the Greys family pay off their debts. Excluding acquisition costs, you can still get a sizeable income.

2. Purchaser's point of view

At present, Manchester United's potential acquisition clients include Jim Ratcliffe, the richest man in the UK, and Jim O'Neill, the former UK chancellor of the exchequer, both of whom are lifelong members of Manchester United.

Although the news that "Apple Inc will buy Manchester United" was widely spread, it was quickly denied by people in the industry. after all, Apple Inc seldom expands his business across the border. But whether the news is true or not, netizens are more supportive of real tycoons such as the Middle East or oil to buy Manchester United than Apple Inc.

They can be forgiven for these ideas, because buying Manchester United means that the acquirers face a club that is losing money for a long time, and a "mess" that has lost its star players and has to spend a lot of money to fix the stadium.

So why does Manchester United need a real football-loving tycoon? "Love football" means having a minimum respect for sports and not degenerating it into a marketing tool; "true tuhao" means being able to accept short-term or even long-term financial results and provide a perfect Old Trafford stadium.

And even if there is no debt, the operation of football clubs is a money-burning project. According to publicly available data, Evergrande spent more than 13.7 billion yuan on the club by 2021, and the investment in Evergrande Lotus Football Stadium is as high as 12 billion yuan. Who can afford such a huge expense if it is not a real tuhao.

But as the most influential and popular sport in the world, the investment value of football clubs is destined to be far-reaching.

British companies play an important role in the Saudi government's "Vision 2030" reform plan, and on October 7, 2021, the Saudi crown prince announced the formal acquisition of Newcastle United, which is self-evident. In addition, the acquisition of Newcastle will not only drive the local tourism and entertainment industry in Saudi Arabia to break the risk of a single oil economy, but also seek higher international influence for the royal family.

If a Newcastle can help a country transform, then as Manchester United, which has a better reputation and better economic and social benefits than Newcastle, the acquirers also have higher expectations for its investment value. this is also the main reason why the club's bidding can continue to rise.

III. Conclusion

In the 2022 version of the Financial Agreement Index of Chinese Super League clubs, new restrictions have been made on the salary of players and the investment of Chinese Super League clubs. Among them, the total annual investment of Chinese Super League clubs is limited to 300 million yuan, and the maximum salary of domestic players is limited to 3 million yuan before tax.

It is 2 million less than the top salary of 5 million a year ago.It may be difficult to measure whether the investment club will make money, but it is certain that the amount of sea cucumbers will be reduced in the future.