The club had previously backed the manager who came in to replace Sir Alex Ferguson after 26 years in charge of the Red Devils, despite a turbulent first term that broke all the records for it’s disappointing return on the club’s investment.
Club owners, or rather Manchester United PLC owners, the Glazer family backed the manager hailed as the ‘Chosen One’ as did chief executive Ed Woodward. Reports in February suggested the owners were indeed disappointed at the team’s poor performance but were ‘calm’ over the impact this season would have on the club’s future.
Ed Woodward repeatedly took the same stance publicly, backing Moyes to turn it around and insisting the club was not going to panic and sack the Scot after just months in the job – they had after all handed him a six-year contract in June 2013.
Back in October of last year, Woodward stated that Moyes had the full support of the club and the same power that Ferguson had been given before him.
“We have a manager who we want to give our full support to make his decision about the players and the decisions about the academy. He has the same power that Alex did,” he explained.
However, whilst all the commentators and pundits throughout the press and news rooms could see Moyes was not leading the club to success on the pitch, perhaps the real reason the Scot was sacked was down to the club’s success in the financial markets.
"His appointment is a victory for common sense and stability," the club stated matter-of-fact upon Moyes’ appointment "United are in safe hands."
Soon enough, down the line, the losses on the pitch started to pile up on the balance sheets in the accounts office too – the failure to qualify for the Champions League alone had not seemed to concern the chief executive all that much back in February when he stated four main points which are, now in hindsight, somewhat contentious.
The first was that the club was focusing on a ‘long-term strategy’ for success by way of building a ‘competitive squad’ capable of winning trophies. The second was that ‘it takes time’ to build up a huge fan base that gives the brand, in effect, the ‘equity values’ of Manchester United and here he directly stated he didn’t think that would ‘go away for a long time’. He then stated in his third point that the club could still sell shirts even if they hadn’t won the title in a ‘long time’ and insisted he wasn’t concerned about that and his last point was to insist the club would make signings in the summer.
I’m sure Ed Woodward likes his job and I would expect once the Glazers started counting the cost of David Moyes (the cost so far and the potential cost in the future) it likely became apparent that Moyes would have to go and that would be best for the owners, best for the chief executive (who could deflect his share of the blame), the club, the team, the fans and, most importantly, the shareholders.
In January, the BBC reported that between May last year when Moyes was confirmed as the new manager and the turn of the year, Manchester United’s share price had fallen by 16%, wiping a massive £300 million off the club’s market value and that was just over the course of six months. Imagine the kind of losses that could be suffered if he stayed for six years. The Glazers took over the club for £800 million so, in effect; Moyes’ first six months in charge cost them a minimum of 37.5% of their original outlay in 2005.
Add, on top of that, the cost of not qualifying for the Champions League which (in accordance to what they earned in Ferguson’s final season in charge) is roughly £31.3 million per year from broadcasting alone, plus the £800,000 per win UEFA pay in prize money (Chelsea earned £48 million in prize money in 2011/12, for example), totaling an estimate of around £40-50 million according to the BBC, which represents around 10% of their expected total revenue.
However, whilst 10% losses this season and a 16% share price plummet isn’t going to destroy Manchester United PLC, it could have gradually a disastrous affect on the club as a brand – the brand that is the Premier League’s most popular football club across the world and the brand that was declining on the pitch and in the stock markets under David Moyes.