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Manchester United projects another revenue record
LONDON (AP) - English soccer champion Manchester United PLC projected Wednesday that it will generate more than $660 million this season after breaking its revenue record while winning a 20th league title.
United, which is listed on the New York Stock Exchange, pointed to the enduring success of its commercial operation in helping to maintain the club as a force globally. It hopes further expansion in the United States will help it capitalize on soccer's growth there.
However, the club is in a transition period as David Moyes has replaced Alex Ferguson after more than 26 years as manager. The 71-year-old Ferguson retired in May after the club won the Premier League for the 13th time in 21 years.
Moyes will be hoping the club's financial strength will help him replicate the success of his predecessor. Controlled by the American-based Glazer family, United posted record revenue of 363.2 million pounds ($578 million) in the year to June 30, up 13 percent from the previous year.
The club said it expects revenue to soar further to between 420 million pounds ($669 million) and 430 million pounds ($686 million) in 2013-14. That would push United closer to Real Madrid, the biggest money-maker in world sport, which reported revenue of 520.9 million euros ($695 million) in 2012-13.
United reported a net profit of 17.2 million pounds ($27 million), up from 4.5 million pounds ($7 million) the year before, while the cash balance rose by a third to 94.4 million pounds ($151 million).
Despite the financial improvements lauded by the management, some United fans remain angry with the Glazers for heaping debt onto the club during their 2005 leveraged takeover. The cost of servicing the 389.2 million pounds ($622 million) debt stood at 71 million pounds ($113 million). United's debt has fallen from a peak of 716.5 million pounds (then $1.1 billion) in 2008-09.
"We are comfortable with the leverage levels where we are," executive vice chairman Ed Woodward said on an investor call. He said the club delivered on its targets and objectives during its first year listed on the New York Stock Exchange.
"Our commercial business continues to be a very powerful engine of growth enabling the team to continue to be successful," Woodward said.
Commercial income alone grew by 30 percent during the year to 152.5 million pounds ($244 million) as 20 sponsorship deals were announced.
United hopes to profit from the appeal of the Red Devils branding in the U.S. where Woodward claims the number of TV viewers watching the team is growing 30 to 35 percent each year.
"It's underpenetrated ... it's the most developed sports market in the world," Woodward said. However, he said the club doesn't want to do deals that "are quick and wrong and tie us up."
Manchester United shares were trading 0.9 percent higher in early trading at $17.26.
"The stock is thinly traded and researched on Wall Street, but of the handful of analysts which cover the stock, the consensus is that the shares are a strong buy," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers in London.
Manchester United has been one of the biggest beneficiaries of the explosion of interest in English soccer. The Premier League has been buoyed by new television deals which are set to generate $8.5 billion over the next three seasons.
United received 60.8 million pounds ($97 million) in broadcast revenue from the Premier League last season while winning the title. On the back of new TV deals, Woodward expects a 35 to 38 percent increase for the club this season.
Despite its healthy finances, United made just one major signing during the summer transfer window, bringing Belgium midfielder Marouane Fellaini from Everton for 27.5 million pounds ($43 million).
"It's not just a strong squad but a deep one," Woodward said.
Rob Harris can be followed at http://www.twitter.com/RobHarris.
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