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Is Man U’s new hardline boss bad for business?

Manchester United's new hardline boss, Louis van Gaal, has put his first stamp of authority on the club by cutting the length of the team's pre-season soccer tours, a potential source of promotion and sponsorship.

While unlikely to affect the club's revenue immediately, analysts said scaling back from foreign tours will be damaging, particularly at a time when soccer is taking off in the U.S thanks to the recent FIFA World Cup.

"Longer-term it would be damaging in as much as it would limit their universe of places to expand in terms of their fan base," Richard Hunter, head of U.K. equities at Hargreaves Lansdown, told CNBC in a phone interview.

"Given the fact that the interest in the States has taken off from World Cup, I can't imagine that commercially the club will want to shun the U.S."

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Before the English Premier League begins in August, soccer clubs often have warm up games in other countries. If Man United reach the final of the U.S. tour, the club will only have 11 days before they play their first game of the Premier League. Van Gaal has argued the jet lag and extensive travelling in pre-season tours will have an effect on how the players perform on the pitch.

Manchester United manager Louis van Gaal is shown during an open training session as part of the team’s pre-season tour to the U.S., at the Rose Bowl in Pasadena, Calif.
John Peters | Manchester United | Getty Images
Manchester United manager Louis van Gaal is shown during an open training session as part of the team’s pre-season tour to the U.S., at the Rose Bowl in Pasadena, Calif.

"We have to prepare the season and when you have commercial activities and dreadful distances, having to fly a lot and the jet lag, it is not positive for a good preparation," van Gaal said at a press conference at the Pasadena Rose Bowl in California.

Commercial revenue is the driving force behind Manchester United's spending power. Sponsorship revenue for the third quarter was £30.7 million ($52.3 million), a 43.5 percent rise from the same quarter last year.

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The North England-based club signed a record-breaking £750 million for Adidas to make its kits for the next 10 years. Chevrolet's logo will be on the shirt after the U.S. car company signed a seven-year deal with Man United for £53 million.

The former Netherlands national team coach is at loggerheads with Ed Woodward, United's executive vice chairman who said on Tuesday that players were not fulfilling their six-hour-a-week commercial duties stated in their contracts.

But not all analysts are concerned about the impact of a shortened pre-season tour. Michael Jarman, chief market strategist at H20 Markets, believes the club's long-term sponsorship deals with Adidas and Chevrolet, as well as the strong brand, will keep Man United's commercial revenues healthy.

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"I don't think it's huge because the attraction of Man U as a club is that you'll follow them wherever they are," Jarman told CNBC in a phone interview.

However, van Gaal's performance on the pitch is key for revenue growth and in that sense, he has a good point of wanting to scale back touring, Jarman added. "Business on the pitch drives revenue off the pitch."

- By CNBC's Arjun Kharpal

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