Manchester United 4th-Quarter Loss Widens on Lower Broadcasting, Matchday Revenue

   By Melodie Warner 
 

Manchester United Ltd.'s (MANU) fiscal fourth-quarter loss widened as the English soccer club saw a sharp decline in broadcasting and matchday revenue.

The 134-year-old club is owned by the Glazer family, headed by American businessman Malcolm Glazer. The role of the Glazers, which took on debt to purchase the team for $1.47 billion in 2005, stirred the ire of some among its fan base. In an effort to reduce its debt load, Manchester United went public on Aug. 10.

In promoting its roughly $234 million debut, Manchester United emphasized it is a globally recognized brand. Analysts have said the club's future earnings growth will most likely stem from sponsorships and merchandise sales. Manchester United signed a multimillion-dollar sponsorship deal with General Motors Co. (GM) to have the Chevrolet brand adorn its jerseys starting in 2014.

For the quarter ended June 30, Manchester United reported a loss of 14.9 million pounds ($24.2 million), or 10 pence a share, compared with a loss of GBP351,000, or less than a pence a share, a year earlier. The most-recent quarter included a tax credit of GBP5.43 million, while the year-earlier quarter included impairment charges of GBP2.01 million.

Revenue dropped 25% to GBP74.5 million ($45.9 million).

Analysts polled by Thomson Reuters had most recently forecast a loss of one cent a share on revenue of $117 million.

Commercial revenue rose 5.2% as new mobile partnerships and increased payments from existing partnerships helped to offset a decline in retail, merchandising, apparel and product licensing.

Broadcasting revenue dropped 37% as its elimination at the group stages of the Champions League resulted in no participation fees this year. Matchday revenue fell 35%, reflecting two fewer home games than in the prior year.

The company had total debt of GBP436.9 million as of June 30, down 4.8% from a year earlier.

The company also estimated fiscal 2013 revenue at GBP350 million to GBP360 million, while analysts surveyed by Thomson Reuters were expecting $576 million (GBP354.5 million).

Write to Melodie Warner at [e-mail]

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