Manchester United Quarterly, Fiscal Year Results Improve Despite Lower TV Revenue

Wayne Rooney - P 2012

The English soccer club, which has a global following and is the most valuable sports franchise in the world, is controlled by Malcolm Glazer and has George Soros as an investor.

LONDON – English soccer powerhouse Manchester United on Wednesday reported improved fiscal fourth-quarter and full-year financials driven by growth in its commercial business, which offset lower broadcasting revenue.

The most valuable sports franchise in the world went public last year, and famous investor George Soros soon after reported owning a 7.9 percent stake.
The family of U.S. businessman Malcolm Glazer, who also owns the Tampa Bay Buccaneers NFL team, bought Manchester United, known as the Red Devils, in 2005 and continues to control it via voting shares. The team has a global fan base that follows its stars on TV and on the Internet and buys its popular merchandise.

Manchester United reported adjusted earnings for its fiscal year ended June 30 of $27.5 million (£17.2 million), up 282 percent. Revenue grew 13.4 percent to a record $580.0 million (£363.2 million) helped by record commercial revenue. 

The company also reported a fourth-quarter loss of $4.3 million (£2.7 million), down from a year-ago loss of $16.9 million (£10.6 million). Revenue rose 14.2 percent to $135.8 million (£85.1 million).

Broadcasting revenue for the full year decreased 2.3 percent to $162.2 million (£101.6 million), with the team citing its weaker share of revenue from the annual UEFA Champions League tournament that features Europe's best teams due to its lower English league ranking. Manchester United finished runners-up in the league year that finished in 2012 after winning in the preceding year and this year.

For the fiscal fourth quarter, broadcasting revenue decreased 3.3 percent to $42.5 million (£26.6 million) for the same reason, "but were offset slightly by higher merit revenue from the English Premier League as a result of finishing in first place in 2013 compared to runners-up in 2012," the club said.

Commercial revenue, including sponsorships, merchandising, product licensing and new media and mobile results, for the year jumped 29.7 percent to $243.5 million (£152.5 million) driven by several new sponsorship partners, an increase in profit share from Nike, new mobile and financial services agreements and higher renewals from existing partners. For the fourth quarter, commercial revenue rose 34.9 percent.

Executive vice chairman Ed Woodward said: "It has been a little over a year since our IPO and in that time we have delivered on our targets and objectives. Our commercial business continues to be a very powerful engine of growth enabling the team to continue to be successful."

He added: "We won our 20th English league title last season…We look forward to a successful 2013/2014, both on and off the pitch."

Twitter: @georgszalai