The club today announced a record second quarter revenue of £122.9m, with commercial income up 18.8% aided by six new sponsorships. Much to the fans frustration the club did, however, pay £6m of interest on the still standing £341m of debt from the Glazer takeover.
Speaking to us before the publication of the latest results, Woodward said he is “optimistic about the future financial prospects of the club.”
Tell us about your background
I was born in Chelmsford, Essex, just outside London in 1971. I played football until 11, when I got juvenile arthritis, which still affects me. That knocked me sideways as I was massively into sport.
After school, I did physics at Bristol University. I wasn’t going to use physics for my work, so I became an accountant. A friend suggested that I should look at a bank and I got in at Flemings. Flemings was bought by JP Morgan and a lot of people lost their jobs. I kept my head down, but it would wind me up when people moaned about losing their jobs there. Part of the high rewards were the high risk. You don’t whinge at losing your job at an investment bank when you’ve been given a chance to work for one.
At JP Morgan, I was involved in the United takeover as an adviser. That was 2004/05. I jumped at the chance of working on that as I love sport.
Before you got the top job, you were involved in building the sponsorship side from £48m in 2005 to £117m in 2012. Tell us a bit more about that I took responsibility over the commercial side in 2007
The first thing I did was bring in Richard Arnold as the commercial director. He’s now group managing director. I’d worked with him 20 years ago. I know what his capabilities and skills are.
We did six months of desktop work with the Glazers. We’d go over there every few weeks and have a big strategy session. They had expertise around the NFL, they could only sell Tampa [Bay Buccaneers] on a regional basis. That gave us the idea that we could sell Manchester United on a regional basis around the world. We’re the only team who can try and do that.
We brought in a huge new structure of operations, research and design people. We invested a lot of money on materials. We’d send out shirts, brochures or gifts embedded with the logo of the company we were sending them to. Often they were desk gifts so that the people were always looking at the Manchester United crest. We tickled peoples’ interests.
All we’re doing is selling diamonds. We don’t make the diamonds. The diamonds have been made by the 135-year history of the club and the players.
We tried to be a bit smarter with how we defined the rights, like with the AON deal. We held back some of the rights for the training kit, that kind of thing.
People ask how they can replicate it. They have to go back 135 years and speak to the Lancashire & Yorkshire Railway company in Newton Heath. You can’t replicate Manchester United.
Do United need to win trophies to keep attracting sponsors?
No. If you fight hard and just fail, people will still watch you on television, still turn up and buy shirts. There’s still a lot of affinity with the club. The reality is that you can’t always win.
Take Liverpool. They still sell an incredible number of shirts and have the second biggest shirt deal in the Premier League. They have one of the biggest technical partner deals. And Liverpool haven’t won the league since 1990.
If we have a bad year, we have the financial strength to change the team.
Why do United have an office in London and Hong Kong?
Someone may say that they’re flying from the Middle East to New York via Heathrow. We can ask them to pop in and not inconvenience them too much. There are more people to hire from in London.
Conceptually, we had sales and servicing in the same team. The head of sponsorship may be responsible for selling, renewing and looking after a partner. So you end up with a deep relationship with the sponsors.
We wanted to make sure that the people who looked after the sponsors were only looking after them. We wanted to improve our service levels and keep the more aggressive sales people away from those relationships. It has worked well.
When did you get offered the top job at United?
At the start of 2013. I couldn’t turn it down.
I’ve been at the club eight years. I see something amazing every day, whether it’s an email or a story about how we are, beyond doubt, the biggest sports team in the world. What we do has a ripple effect around the world.
How was David Gill with you when he found out that you were taking over?
We’ve worked well together for a long time. In 2007, we both had two parts of the business and had to report directly into Joel Glazer. David and I needed to work well together. I would speak to him at least once a week.
More recently, I had weekly sessions with him. Having been at the club eight years and involved with transfer decisions and understanding with Joel where we should go with numbers, price and so on, I had that knowledge.
Can you understand the frustration of fans who see you haggling over relatively small amounts of money for players, yet £70m is used to pay off the club’s debt each year?
I do. The decision about how much we’re willing spend isn’t just mine, it’s also the manager. Spending more than you should on a player can have negative consequences. It can have negative consequences on other players in the team and also on the player who has the burden of being the most expensive player in Manchester United’s history.
It also has a knock-on effect on the salaries of the other players. A perception that we overpay is not a good thing either.
On the £70m, that number was because of a number of things we did during the year that were one-offs. The annual interest on the debt is down to £21m. That will continue to decline.
To the point that the club will be debt free?
I can’t say as we haven’t communicated to our investor base about our leveraged targets. I can say that I’m optimistic about the future financial prospects of the club.
If Barcelona’s numbers are accurate, we’ll go past them this year. We will continue to grow and because our revenue is growing so much faster than anything else, it does allow us to be able to spend a lot more on players. Our revenues were £323m two years ago, £360m last year. This year we’re saying £420m-430m on guidance.
Are there plans to expand Old Trafford further?
It’s not something that we’re thinking about.
We sold out all the boxes for the first time in several years. We’ve experienced greater demand for tickets than any of the last six or seven years. We’ve also kept ticket prices flat for three or four years.
Other clubs price their tickets to supply and demand.
We don’t want to penalise people who only want to go to a few games. We don’t want to use ticketing exchanges either, which clubs are increasingly using. Tickets get bid up. What is the right price for United against City in the second half of the season? People might pay £500 for a ticket but that doesn’t mean they should.
Prices had risen considerably in the three or four years before that. Why the change in strategy?
I’d rather get sponsorship in than raise ticket prices. I’d rather have a full stadium creating the atmosphere than empty seats.
So it’s not going to be Old Trafford with a sponsor attached?
No. It’s important that Old Trafford is Old Trafford. People have asked us if we’d consider selling naming rights. We won’t.
Would you consider the words ‘football club’ going back on the United badge?
It’s on my list of things to look at. We’re a football club. Yes, there is a commercial business, but that exists to fund the ever-increasing player costs. We want to continue that.
Andy Mitten is a freelance journalist who has reported on football from 85 countries for a range of publications across the world. This interview first appeared in United We Stand