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David Moyes Sacked as Manchester United Manager

On April 22nd, Manchester United finally brought an end to the unhappy and unfruitful 10 month reign of manager David Moyes.

Moyes took over from Sir Alex Ferguson in June 2013 after the Scot had led the club to its 13th Premier League title, but in truth looked overawed by the size of the job from day one. Moyes struggled to cope with the intense media scrutiny and the expectation levels at one of Europe’s elite clubs. While the playing squad undoubtedly needs a major overhaul, Moyes must take some of the blame for presiding over a season which has seen last season’s champions fail to qualify for the UEFA Champions League for the first time since 1995.  A record of 27 wins, nine draws, and 15 defeats in 51 games is never going to cut it at a club of United’s stature, especially given the abject performances in many of those defeats and Moyes has paid the ultimate price.

There appears to be a realization that the playing staff needs to be overhauled and this will come at a significant cost in an era in which world class players cost north of £40m ($62.5m). If United, as is rumoured, is preparing a £200m ($312.6m) transfer war chest for the summer, it must be certain that it is giving it to the right man. The club’s American owners, the Glazer family, evidently decided that Moyes was not that man and are now seeking a replacement to oversee the mooted spending spree.

Fan discontent will have played a role in Moyes’ demise, but the cold truth is that this was a business decision. For all sport’s romanticism, it is now a numbers game and the Glazers will have feared a terminal decline.

The club can stomach a lack of Champions League football and the resultant reduction in broadcast income for a year or two, but any prolonged absence will have a catastrophic effect. The club received £31.1m ($48.6m) in Champions League broadcast revenue for FY2013, and when this is combined with matchday revenue and sponsor clauses that mean they reduce payments in the event the club does not play Champions League football, the financial impact becomes clear. Much of the club’s financial success, and indeed its business model, is built on the assumption that the club will remain successful on the field. The Glazers clearly felt that Moyes presence as manager represented a threat to this and so decided to pull the trigger.

The markets reacted positively to the news as the club’s share price rose to an 11 month high. The shares opened on April 22nd at $17.82 and peaked during the course of trading at $19.00, before finally settling and closing at $18.78. This 5.98% increase is a clear sign that those interested in the business aspect of the club felt the sacking was a shrewd decision. They now await news of the next manager, but whoever he is, he will now know that business dictates that there is no room for failure.

For more information on Manchester United and the monetization of on-field success, see our case study:

Manchester United: Monetizing a successful football club

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