Moyes’ Sacking – Football or Financial?

February 2014, David Moyes, at the helm of Manchester United F.C. for almost 7 months now, had been finding it increasingly difficult to replicate the high standards set by his predecessor, the legendary Sir Alex Ferguson. High profile losses to Chelsea and Stoke followed by an agonising draw to Fulham (at home) had left the reputation of the most successful English football team in tatters. Many reasons were put forward but it was ultimately a combination of factors that had contributed to the unexpected decline of a team that had won the league just a year ago – and convincingly by 13 points. Fast-forward two months to April 22nd and David Moyes had been removed from the most prestigious job in club football before he even got to learn all the names of the staff roster. It was 10 months! 10 months (of a 6-year contract), that’s all it took for the board to realise that this had been a costly mistake and it was time to cut losses. Evidently, the results on the pitch were a major factor in making this decision but, obliquely, it was the detrimental effects off it that led to this brutal decision.

The Glazer family, after their takeover in 2005, had relied heavily on sponsorship deals to recover the major debt (£700 million) that they had brought to the club with them. Although, this seemed a ridiculous gamble, with Ferguson at the helm, it was an intelligent and reliable process that had been relatively plain sailing for years but after the dramatic collapse of Moyes’ United team, its flaws had been established. Major sponsors such as Nike – who had been negotiating a record breaking £600 million deal with a club they had been with for 13 seasons began to question whether it was economically viable to invest a hefty sum into a club which seemed to be on the decline; Stock shares had fallen to $14.21 (per share) on the Ney York stock exchange and with United not participating in next year’s Champions League for the first time in 19 years, there was a £37.8 million loss in revenue for the accounts published in the following year. Match day revenues had fallen by 16 per cent to £90.6m, while income from broadcasting dropped by 20.7 per cent to £107.7m, a decrease of £28.1m. Despite these figures being recorded for the 2014-2015 financial year, it was the failures of the season under Moyes in 2013-2014 that had resulted in this. Of course, Ed Woodward, CEO of Manchester United F.C., had anticipated this and thus, consciously made the decision to terminate the contract of David Moyes by paying £5.2 million in compensation in order to avoid another disastrous campaign that simply couldn’t happen.

For most football fans, it was simply the on field factors that led to David Moyes’ abrupt dismissal but to the more vigilant person, it had in actual fact been the potential economic consequences that faced a club of Manchester United’s stature that led to the inevitable sacking of David Moyes.

 

 

Contributed by Haider Ajaib 12MB

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