Impacts of Globalization on Manchester United - Case Study Example

IMPACTS OF GLOBALIZATION ON MANCHESTER UNITED Student’s Name :( First, Middle, Last) Admission Number: Course/Subject Title: Institution: Instructor/Lecturer: Date of Submission: (dd, mm, yyyy) Globalization Globalization refers to integration of world economies, world media expansion, shared cultures and interdependence of societies around the world. Sport is a popular aspect of universal culture. It results in economic growth, social penetration of individuals and corporations. It surpasses nationality, ethnicity, sex and languages as both a leisure activity and professional business. Spectators watch sports as much as they play it which in turn invokes passion that surpasses any other experience. With technological advancement, sport has been localized as individuals watch and support their favorite teams in televisions. In the 20th century, sport became an international activity. Sport is significantly influenced by policies of individual nations as well as international trends that influence world economy. Currently, football is a global business and players are bought across the globe, international professional leagues are created and top football leagues such as the World Cup and the European cup finals is a top media event (Dolles & Soderman 2005: 5). The fact that same rules applies to skillful players despite of social background and ethnicity is a clear indication that football is a global sport. Players face similar challenges in the pitch and they include sponsorship, national versus league team, big teams employing young players and branding. Football has become the number one most reported and viewed game in the world. According to FIFA (the international football governing body), the 2002 finals between Brazil and Germany was viewed by approximately 1.1 billion people and it was broadcasted across 213 countries (Dolles & Soderman 2005: 5). In 2005, Manchester United brand name was prominent across the world. The club fame is linked to both its skillful on-field performances as well as its management strategies as the club took full advantage of globalization. The English Premier League had gained a lot of significance world wide and with advanced media technologies the club was reaping maximum benefits. Because of its undisputable top position as a global brand in sport, Malcolm Glazer, a United States business man took over financial control of the club. This process had started in May 2005 after the club announced that Glazer owned majority of the share in the club (John & John 2006: 35). Over the next few months, Glazer passed the 75 percent stake required for removing the club from the stock market and when he reached the 90 percent mark the club was forced to sell the remaining 10 percent to him. This was done despite the fact that the fans were opposed to change in club’s ownership. However, opposed fans did not have funds to redeem the clubs ownership and in retaliation they formed a new club namely FC Manchester United and it plays in North West Counties League Division Two (Dolles & Soderman 2005: 5). This is seen as a move to redress globalization impacts on Manchester United as the fans identify themselves as the authentic supporters of the club while fans outside Manchester city are considered as inauthentic consumers (Best 2009: 27). With the takeover, it will be hard to maintain the success of the club and the team is likely to face vast challenges in the future. Globalization has increased international rivalries that started in Olympics games of 1896. Over decades, sports have benefited from media exposure and sports such as golf, tennis, rugby, badminton, cricket, squash, boxing and lacrosse have thrived under international exposure. Other sports what have entered international market include American baseball and football but according to Giulianotti (2002), no single sport has benefited more from globalization than soccer. Soccer first appeared in Olympics in 1908 and since then it has attracted significant attention globally. After the first world cup in 1930, the sport has continued to draw more support world wide and in 1980s more professional soccer leagues and clubs were established as globalization trends accelerated. Club owners were trying to capitalize on the game’s global appeal but only two clubs namely Real Madrid and Manchester United became international brands. Although Real Madrid has the highest turnover worldwide and it has a very high global awareness, Manchester United’s marketing strategies and innovative branding are considered to have a leading competitive edge in global sports. In 2003, the club’s annual report recognized the global influence of the club in the world and it acknowledged the need to collect funds from its 75 million fans world wide(John & John 2006: 35). Regarding players, Manchester has players from all over the world and this has eradicated cultural barriers as diverse players have varying cultural backgrounds. Thus, it can be claimed that football is a unifying factor and it promotes peace and integration in the world. It bears noting that even nations with conflicting economic and cultural interests are likely to become friends when watching football (John & John 2006: 35). Premier league clubs are increasingly concerned about making profit hence the need to increase their fans base from their home ground. Most teams have neglected sporting ambitions and to this end they are making vast pre-season tours to China, United States and the Far East rather than engaging in friendly matches. This according to Castells is linked to the fact that transactional organizations put more emphasis on money, branding, people and technology. What’s more, football has become a commodity and it is part of a wider encourages consumption that is based on brand. As earlier depicted, Manchester takeover can be linked to the fact that globalization has created a global village (Best 2009: 27). The success and brand name of the club has enabled the club to maximize profits. It achieves this by ensuring a full stadium during home game as well as comprehensive marketing of the club to new market including the United States and the Far East. In addition, club merchandising of clothing and shirts is a major source of income although the club has not utilized this strategy maximally. This money can be used to re-invest in players which in turn will increase their salaries (Steriopulos 2010: 1). Individual teams are important in enhancing the brand of the team as fans want to watch their favorite players and they buy shirts bearing player’s name and number on the back. Teams can benefit from transfer bids such as the high profile transfer of Christiano Ronaldo from Manchester United to Real Madrid which to a large extent was influenced by marketing strategies rather than sporting reason (Martin 2005: 1). Sponsorship play a vital role in club’s acceptance in overseas market and it is also helps the team as well as the team to raise its brand name globally. Thus, sponsors are viewed as strategic tools to promote the image of football, the club and the partners. United’s primary goal regarding sponsorship is to develop a global sponsorship alliance that will encourage investment to the club to the mutual benefit of both the team and the sponsor. These partners include WAP service to provide club’s latest news while Nike replaced Umbro as United’s uniforms merchandising partner and promoter in the 2003/2002 season. The media on the other hand is a major stakeholder in professional football. National and international media pay extremely high amounts to national leagues or to international football events such as FIFA World Cup. The importance of football to media business is also evident in the increasing number of sports radio talk shows and TV oriented networks (Martin 2005: 1). Globalization has changed the way sports is consumed and produced. With increased integration between world economies, communication between producers and consumers has increased and businesses can access vast customers. English premier league are enjoying unprecedented coverage and for those who do not have the opportunity to attend live matches they can watch through the internet, cable TV, read the game analyses, subscribe for special updates through mobile phones or read about their favorite teams on magazines or newspaper. The sport market has numerous teams and leagues and it is up to the manager to understand the global environment in order to operate effectively (Hoye et al 2009: 56). Generally, globalization of sports has created a competitive environment where teams seek to show their skills but in reality only a few teams share the limelight and most of them are wealthy (Martin 2005: 1). With globalization, football has turned into a highly recognizable sport. In 2005/2006 season, the big five in the European football League had an income of $18.54 billion with the English premier League contributing approximately $2.9 billion. This is linked to the fact that football fans are viewed as customers and club revenue is used to buy the best players. Fans tend to show support for their national team and favorite team. This reflects the management structure as well as the composition of the team. The support for the team has also increased in other countries such as Brazil and China with the joining of international players such as Pak Ji Sung and Anderson. The global fan base of Manchester United can be counted in millions and their interest is likely to increase in the future. Although internal fan support might not be as strong as local support, it is no less strongly felt (Bridgewater 2007: 3). With respect to player’s salary, globalization results in an increase in club income hence players are earning million of dollars. Clubs are also reaping from competing sponsors and in this case Manchester United is sponsored by Nike which in turn pays the club a significant amount seeing that it is also benefiting from the global image of the team. Manchester is also involved in player development and they send their scouts across the world to discover young and talented players and to sign them into the team. David Beckham, for example, signed a trainee contract and at the age of 19 in 1995 he played in the English Premier League. The team has also been able to sell its players at a significant profit and this is linked to its global image. In 2003, Beckham signed a four year contract with Real Madrid worth 35 million Euros and the same case was repeated with Christiano Ronaldo. Thus, teams and players benefit from the global image of the club in the sense that the team can sell its players while the player can move to more prestigious teams and earn more (John & John 2006: 35). According to the club’s manager, Sir Alex Ferguson, the club appreciates the support of their fans regardless of whether they attend live matches or the primary goal of the club is to reach their supporters despite where they live (Martin 2005: 1).The club also developed a membership scheme. Some of the benefits that members can access include attending exclusive member events, buying home matches ticket and publications and merchandise. The club has approximately 150,000 members. With globalization revenue sources have changed. Richer clubs are experiencing a decrease in ticket sales as more people can watch the game on TV and internet but at the same time media and sponsor are investing highly on global brands such Manchester United. Given that the club owns its on TV, it is not susceptible to media revenue unpredictability and they can air lift their matches across the world. Other sources of revenue include developing leisure complexes, stadium enlargement and hotels. Old Trafford can accommodate approximately 79,000 spectators (Dolles & Soderman 2005: 5). In conclusion, football is viewed as an industry and its services are similar to those of entertainment business. Fans can either watch a match at home, in a cinema, in an amusement park or in a stadium. In countries where football is a national sport such as Britain, football ranking as an economic activity has risen significantly. The globalization of football industry has concentrated resources in South American and European cubs due to the fact that they have economic resources to face stiff competition from foreign leagues. References List Best, S. (2009). Leisure Studies: Themes and Perspectives. London: SAGE Publications Ltd, 27-89. Bridgewater, S. (2007). Globalization of the Premier League: A Debate Worth Having. RetrievedApril 9, 2011, from: http://docs.google.com/viewer?a=v&q=cache:fifkbTK38AMJ:www2.warwick.ac.uk/newsandevents/pressreleases/research_finds_eager/globalisation_of_football_brands.pdf Dolles, H., & Soderman, S. (2005). Globalization of Sports-The Case of Professional Football and its Management Challenges. Retrieved March 8, 2011, from http://docs.google.com/viewer?a=v&q=cache:NDEltGM2fgMJ:www.dijtokyo.org/doc/WP05_1GlobalizationOfSportsProfessionalFootballDollesSoederman.pdf Hoye, R. et al (2009). Sport Management: Principles and Applications. New York: Butterworth- Heinemann, 56-102. John, H. S., & John, V. (2006). Globalisation and sports branding: The case of Manchester United. International Journal of Sports Marketing & Sponsorship (2), 35-61. Martin, M. C. (2005). TheGlobalization of Soccer: A Look at the Growth of the World's Game and its Current Condition in the United States. Retrieved April 8, 2011, from http://docs.google.com/viewer?a=v&q=cache:CFpE0RGaqK8J:www.la84foundation.org/SportsLibrary/UCSD/UCSDMartin.pdf Steriopulos, C. (2010). Manchester United : The Future of a Soccer icon. Retrieved April 8, 2011, from http://www.suite101.com/content/manchester-united--the-futures-bright-a298749 Read More