How to Screw Up a Monopoly: Manchester United Shirt Sales Decline 10%
The fact that Manchester United's shirt sales dropped 10 percent last year due to fan protests over the indebtedness of its American owners proves that it is possible to screw up a marketing monopoly. Most people don't regard sports franchises as monopolies, but that's what they are: customers cannot easily transfer their loyalties to other teams and the teams control all the official merchandise, which is why sports franchises are so lucrative.
Yet United, the most valuable sports brand on the planet, is somehow getting this wrong. Shirt sales have declined because hardcore fans want the current owner, Malcolm Glazer, out and are boycotting new shirt purchases until he leaves. They believe the club's debt service payments hobble its ability to pay for top players. They're wearing vintage shirts to games instead, or green-and-gold protest shirts. The only fans wearing the new shirts are children who are too young to understand the debt issue or rubes who don't know any better.
The club, in an email to BNET, disputed the numbers, saying research agency Sport+Markt used too small a sample to measure its shirt sales accurately. The club did not give its own numbers.
Regardless, this 
has a knock-on effect with United's lead sponsor, the insurer Aon. Aon paid £80 million for the rights to the front of this season's United shirt; in return it wants exposure from televised games and also from fans walking around with their new jerseys on. By rights, Aon should be celebrating: United are top of the Premier League and have only lost one game all season. They are on course for a record-breaking 19th league win.
Yet the club that has the third largest revenues of any football team on the planet, and the third most Facebook fans, has retail revenues that are only sixth among the big international clubs.
Other brands can sense the weakness: They are now using guerilla tactics to steal some of the Manchester United limelight. Former sponsor Sharp donated its logo for use on the fans' protest shirts.
Last weekend, when non-league Crawley Town F.C. was drawn against United in the fifth round of the F.A. Cup, News Corp. (NWS) tabloid The Sun bought out Crawley's shirtfronts for a David-v.-Goliath thriller that United only just won. Crawley's regular sponsor, real estate agent Alamo International, was "persuaded" (probably with News cash) to shift its logo to the back of the shirt. The Sun milked the United-Crawley game for all it was worth, even getting one of its notorious Page 3 girls to change her allegiance from West Ham United to Crawley just for the game.
United still has plenty of monopoly pricing power, of course. It expects to extract a 50 percent increase in its £302.9 million deal with Nike (NKE) to make the shirts in 2015. But the 10 percent headline decline is a warning flag to sports brand managers: Monopolies may be powerful, but they are not impregnable.
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