I actually doubt it is to do with fan protests. But let us assume it is. Is it actually good? No.
Firstly, future cash flows are taken into account with investments. The club will need to know they can afford signings before they actually make them. If the sponsor was as close to signing as was claimed, it would have played a role in how much can be spent in one transfer window and the relative wages. Losing a sponsorship deal like this will have an impact on the transfer window.
Another point is that 94% of all out goings are club related. If we assume the dividends will also take a hit (interest won't and will remain at 4% of out goings), that means club-related outgoings will be hit by 98% of that £200m. So, £19.6m loss in revenue per year to go on the club.
Where is the easiest place to save money in football? Transfers. Not signing anyone or reducing transfer purchases is the best way to deal with money shortages. The next best is selling players. This will impact our transfer ability and competitiveness. And it will potentially impact sponsorship deals long term e.g. losing big players through having to sell or not bringing in any new big names.
This will also set a precedent in how sponsors behave with us. This will have a long term impact on revenue through sponsors if it happened multiple times. Demand lowers and so does price. Risk heightens and price lowers.
The other issue with this is, if it was really due to the fans, this will be alarming to potential buyers. The very fact that sponsors will pull out based on fan behaviour will make this a very high risk investment as revenue will be seen to be under threat. This will further limit an already limited pool.
Cutting down the value of the club won't have much impact as it will still cost billions. There are only 2, 755 billionaires in the world and the vast majority wouldn't be able to afford it even if the club's value dropped by a billion due to fan protests. Just an example; it likely won't drop this much based on only losing this sponsorship deal. The precedent could be an issue, though.
Also, the Glazers would still be, essentially, $2.4bn in profit from their initial investment (before taxes) even if it did drop by a billion and then they sold the club. Honestly, I don't think that would trigger them into selling. I think you will start to see how much damage would need to be done to the club to really pressurise their profit, and get them sweating.
In the end, you could damage the club long term and still not get rid of the Glazers.
There are other issues, also, but this post is long enough.
Good post, interesting read. Thank you.
I think there's a valid point on the activist side of the argument that nothing is going to change unless you create some real financial damage for the Glazers. But the same steps will cause damage to the club, more or less inevitably. And, that damage must be weighed against the probability that something positive will come out of it all. It seems obvious that the likelihood of the Glazers selling is very low.
Other positives may be more attainable: A greater restraint in taking out dividends, a willingness for fan representation in governing structures, increased investment in OT or the squad as a measure to seek goodwill, a realisation that the financial side eventually isn't going to work if the on-pitch success isn't there.
In the end, there's got to be a viable calculation of cost and benefit, risk and reward. Fans have to decide what's worth pursuing and what isn't, and just what should be attempted achieved, because not all aims call for the same methods.
For my part, I'm not buying into forcing the Glazers out as a strategy. It's just way too unlikely to happen, and it can only be pursued by means that are wholly destructive to the club. Far too much risk and cost, far too little prospective gain. To just go full tilt in pursuit of that aim as if there was no other choice and on no better basis than let's see how far we get is just irresponsible, and likely to damage the club for little gain. So enough with this total war shit.
I would argue that any continuation of this should settle on the second set of aims, ie, behavior change. The Glazers won't change, so that's a question of affecting
their calculation, which I think may be attainable. That will also require some disruption of some sort, with some negative consequences. But there's got to be a defined way out for the owners: Do certain things, and the troubles will stop.
Maybe they could stop taking their dividends of 20M every year. Have you even considered that? They have been completely useless owners and guess what? This is how protests work, and this is how we drive them out of the club.
