Ground Floor: It's all gone a bit pear-shaped for Manchester United lately. The Red Devils' defeat last Saturday at the hands of a determined Liverpool adds the FA Cup to the Premier League and Champions League in the list of titles the club won't win this season.

Alan Smith's horrific injury in the last minutes of the game only served to depress the United faithful even more. The message boards are full of postings from despairing fans who want to know where it's all gone wrong.

Malcolm Glazer probably wants to know that too. Having saddled football's wealthiest club with debt of almost a billion euro, he discovered last week that Real Madrid has taken the top spot in the wealthiest club league away from United. According to the Deloitte Football Money League report, the Spanish club saw an increase in revenue of 17 per cent in the season ending May 2005, while Manchester United's fell 5 per cent in the same period. If you take the longer term view - over the past five years - Real Madrid has increased revenue from €138 million to its current level of €276 million, while United started from a revenue stream of €217 million in 2001 to earn €246 million in 2005.

Real's off-pitch performance over the past five years has probably been more impressive than anything on the pitch. What's interesting is that they haven't done it through ticket sales or broadcasting fees but through merchandising and sponsorship.

They recently negotiated a new shirt sponsorship deal with BenQ - owner of Siemens mobile devices - worth €25 million a season, a significant increase from their current €14 million deal, while the increase in match day revenue is up a mere 3 per cent.

Moreover, this growth was due more to an increase in home match attendance rather than price increases - the average attendance at a Real home game is now 72,000.

The escalation in off-pitch commercial activity is evident through the increase in commercial revenues totalling 34 per cent over the past five years to account for 45 per cent of the club's total revenue.

It's quite clear that the management team at Real have rebranded the club as a commercial business and that this has met with extraordinary success.

By contrast, over a five-year view, the Manchester United business model has been a good deal less exciting. The club generates significantly more in attendance money - €103 million from an average attendance of 69,700 - and capacity is set to increase to 76,000. Their shirt sponsorship deal, currently with Vodafone, is worth around €13 million a year and ends at the end of this season.

But unlike Real, United's commercial revenue is just 29 per cent of its total income stream - surprising for such a significant global brand.

Yet it offers a whole range of United products to the devoted supporter - you can get a United credit card, apply for a United mortgage, save money in a United account, all of which help to support the financial base of the club.

It's not supposed to be about the revenue, of course, but about the glory and the titles.

However, you don't usually have one without the other, unless you happen to have a team full of brand-name players whose shirts are bought around the world.

That's what's happened for Real despite a lack of silverware. Last year, Barcelona finished in top spot in La Liga, and Real were knocked out of the Champions League by Juventus. But the stable of players assembled by Florentino Perez has kept the tills ringing. David Beckham might have been judged surplus to Sir Alex Ferguson's footballing requirements, but sales of his number 23 shirt keep pulling in the cash. Real's policy is obviously to pack the team full of recognised brand names like Beckham and Zidane, so that even people who don't care that much about football will still have heard of the players.

In fact, the main bonus for Real has been from its overseas income. Estimates for the 2004/05 season are that 40 per cent of merchandising revenue accrued from domestic Spanish sales and 60 per cent came from abroad.

Five years ago, 80-90 per cent of merchandising revenue was Spanish in origin.

So Perez has successfully shifted the focus of Real Madrid from a domestic brand name into a global one and helped the club outstrip its English rival.

Meanwhile, Real failed to beat an Arsenal team whose biggest on-pitch brand was Thierry Henry on Tuesday.

They'll get another chance, but the money men will be watching the result as anxiously as the fans.

It's a funny old game!

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