Wednesday, 7 April 2010

Business as usual?

Big game tonight, dare I say “massive”.  Just like the big game on Saturday.  And yet what’s this popping into my inbox yesterday?

Yes that’s right, twenty four hours before a tense quarter final tickets are knocking around on United’s official touting site ticket exchange.  A week before the Chelsea game, the club was taking out discreet adverts in the Guardian offering hospitality packages which it had failed to sell.

Roll back to February and thousands of normal season ticket holders applying for the Carling Cup final in February were pretty dismayed to be told they had not been successful in the ballot, this was despite an allocation of 31,000 and the fact that only around 40,000 season ticket holders were eligible to apply (those in the Automatic Cup Scheme who hadn’t opted out of the Carling Cup).  With odds like those, the huge number of “chubbings” (that’s a United supporters’ term for rejection in a ticket ballot) was very odd.  The mystery was solved when this missive from the ticket office was sent to executive ticket holders (I’ve removed the sender’s details as it isn’t his fault and underlined the key paragraph):
From: ****************
Sent: 17 February 2010 10:21
To: ****************
Subject: Chance to get Wembley Tickets
Hi there,
I hope you are well and business is going strong. After last night's great result against AC Milan, Manchester United have a very strong chance of progressing at least to the Quarter Final stages of the Champions League.

We have therefore hospitality options to guarantee a place not only for the AC Milan game, but also the Champions League Quarter Final game, Liverpool, Chelsea (potentially the Premiership title decider), Spurs, West Ham, Fulham and Stoke with one seasonal ticket. Prices only start from £673 + VAT subject to availability which equates to just £75 + VAT per game.
If and when Manchester United progress to the quarter finals and then the semi finals of the Champions League, your place will also be guaranteed for these at no extra charge.
This is a great option to not only trial the Hospitality facilities at Manchester United, but also gives you the chance, in a very cost effective way, to strengthen your relationships with new and existing clients, reward your staff, network with other Executive Members and if relevant, use them for your own personal use. 
As a further incentive, if you decide to get seats by close of play on Friday 19th February, you will have access to buy the same amount of Wembley Carling Cup final tickets which is on Sunday 28th February.
I have attached a link to our microsite which highlights all the facilities here at Manchester United for your perusal. 
If you are interested or would like to find out more information, please contact me on 0161-8688530.
Many thanks,
***** ******
Senior Business Development
Seasonal Hospitality
T +44 (0) 161 868 8530
F +44 (0) 161 868 8456
E ************
When the club failed to shift many (any?) of these hospitality packages, there was a “second ballot” of Carling Cup Final tickets for normal season ticket holders.  My little group of eight, all of whom had been “unlucky” in the first ballot experienced an amazing reverse of fortune in the second ballot and we got eight tickets.

My sources inside the ticket office say that the club’s top brass are desperate for United to get to the CL final so tickets for the game can be offered to executive ticket holders in exchange for renewals for next season.  These are just stories at the moment, but if we do make it to Madrid it will be interesting to see if the club tries to leg over supporters in the same way it did with the Carling Cup.

There is a whiff of panic about all this.  A quick look at United’s website shows the Europa Suite and Museum still available for hospitality for both the Spurs and Stoke home matches.  United’s most recent results presentation described match attendances as “robust” (hmmm) and hospitality as “challenging”.  The JP Morgan report reminds investors that executive hospitality is “highly discretionary” and sees only a very slow recovery from a forecast 2009/10 capacity utilisation rate of 85%.

Adding to United’s fears of course is the looming threat of season ticket holders and executives not renewing for next season.  As JP Morgan say, “We note that the coming two quarters will be important to gauge demand for 2010/11 season tickets and Executive Hospitality seating in light of the negative MUST PR campaign.”  The club is very keen to stress the season ticket waiting list, the existence of which was rather undermined by the experience of one supporter who spoke at BBC Radio 5Live’s United “Fan’s Forum” on 27 March 2010.  Having received an email from the club asking if she wanted to join the list, she duly did so as an experiment (despite already having a season ticket) and was amazed to receive another email from the club the very next day saying she had been very lucky and was now at the top of the list!

For all the talk of 333m supporters around the world, United are well aware that around 40% of revenue comes from “matchday”.  Furthermore, the timing of ticket revenue receipts is very beneficial to cash flow, which is already under pressure from the pre-payment of the Aon sponsorship monies (which has the effect of reducing free cash flow by £9m per annum compared to EBITDA).  This all puts huge power in the hands of match going fans whether they are executives, local companies who use hospitality facilities (two thirds of the club’s hospitality clients are based in the north-west according to my ticket office source) or normal season ticket holders.

The green and gold protests are clearly already causing concern inside the club.  The increasingly heavy handed actions of the club’s security contractor CES – searches at the turnstiles to look for banners, stewards deliberately blocking gangways in the Stretford End to prevent banners being unfurled (surely breaking health and safety rules) and the ejection of fans allegedly involved in blocking gangways at previous matches (a little ironic?) all point to increasing worries about the supporters’ campaign (details and photos here).  A leading contributor to a United forum reports staff on the official programme and magazine “desperately scouring pictures to source those with minimal exposure to gold and green”.

If a bid is forthcoming in the next few weeks or months, the Glazers will have to decide whether to cash in now, or risk holding on in the hope of more in the future.  Right now the risk level is high and rising.