United issue Champions League warning

LONDON: Manchester United’s owners yesterday warned investors the club may struggle to keep their best players if they miss out on Champions League qualification for a second consecutive season.

“Because of the prestige associated with participating in the European competitions, particularly the Champions League, failure to qualify for any European competition, particularly for consecutive seasons, would negatively affect our ability to attract and retain talented players and coaching staff, as well as supporters, sponsors and other commercial partners,” owners the Glazer family said in the club’s prospectus.

United also revealed that income from their new 10-year kit deal with Adidas will fall by 30% to £52.5million per year if they miss out on the Champions League for two seasons in a row. Former manager David Moyes was sacked by United in April for failing to secure a Champions League place last season and his successor Louis van Gaal will be expected to steer the club back into the lucrative competition.

The Glazer family have also announced plans to sell five percent of their 90% stake in the club – eight million shares – for around $150 million. The announcement comes two months after Malcom Glazer, who led the family takeover of United in 2005, died. His six grown children control the club.

The proceeds will go to the Glazer’s investment vehicle, Red Football LLC, rather than the club itself.

After rising steeply following the announcement of the Adidas deal earlier this month, United’s shares closed at $19.31 in New York on Wednesday.

United said success on the pitch is key to “the value and strength of our brand and reputation,” with a global array of sponsorship deals helping the club generate an estimated revenue of around $727million for the year to June 30, 2014.

Claiming to have 659 million followers around the world has helped to drive up turnover in recent years, but United has conceded that “our popularity in certain countries or regions may depend, at least in part, on fielding certain players from those countries or regions.” – Reuters