Manchester United Revenue Falls On Disappointing Season

By Chelsey Dulaney 

Manchester United Ltd. posted lower revenue across all segments for its September quarter as the team failed to qualify for the Champions League during one of its worst seasons in more than two decades.

Still, Manchester United cited a newly-signed sponsorship deal with Adidas AG worth GBP750 million over the span of a decade, on top of five other sponsorship deals announced in the quarter, as future drivers of revenue growth. The company backed its outlook for the year.

Manchester United is owned by the Glazer family. The role of the Glazers, who took on debt to purchase the team for $1.47 billion in 2005, stirred the ire of some fans, who worried the new debt would restrict the team's ability to keep and attract top talent. In an effort to reduce its debt load, Manchester United went public in 2012.

Manchester United's seventh-place finish in the English Premier League this year disqualified it from the Union of European Football Associations' Champions League for the first time since the mid-1990s.

For its fiscal first quarter, revenue fell 9.9% to GBP88.7 million, from GBP98.5 million a year earlier. Analysts polled by Thomson Reuters had expected revenue of GBP86.1 million.

Broadcasting revenue fell 13% to GBP16.8 million, due to Manchester's disqualification from the Champions League. Matchday revenue fell 22% to GBP15.1 million on one fewer domestic cup home game.

Commercial revenue, which accounted for 64% of Manchester United's revenue in the quarter, fell 5.2% to GBP56.8 million, as higher sponsorship revenue was offset by reduced Nike guaranteed revenue and the expiration of mobile partnerships.

Overall, Manchester posted earnings of GBP8.94 million, or GBP5.45 a share, from a prior-year loss of GBP0.29 million, or GBP0.18 a share.

Adjusted for foreign exchange losses and other items, per-share earnings surged to GBP2.59 a share from GBP1.37 a share a year earlier.

Meanwhile, operating expenses grew 2.9% to GBP2.6 million.

Write to Chelsey Dulaney at [e-mail]

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