SBD Global/November 15, 2013/Finance

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  • ManU Attributes Record-High Quarterly Revenue To Soaring Value Of TV Rights

    Manchester United was valued at $2.6B at the close of Wednesday's trading.

    ManU highlighted the "soaring value of television rights for live games on Thursday after broadcast and sponsorship deals pushed quarterly revenues to a record high," according to Keith Weir of REUTERS. Premier League clubs are "benefiting from a battle" between pay-TV company Sky and BT for "supremacy in the sports market." ManU Exec Vice-Chair Ed Woodward said, "The value of content is rising. Sport is the must-have content and football is the world's No. 1 sport." Woodward added that the new BT deal would be worth upwards of £10M ($16M) a season to "English clubs playing in the Champions League, the most prestigious European competition." The club's shares, listed on the N.Y. Stock Exchange since Aug. '12, closed at $15.75 on Wednesday, valuing ManU at $2.6B. The stock has "risen from its market debut price of $14 and has defied critics who argue that soccer clubs are a risky investment best left to fans." Staff costs rose 31% to £53M, reflecting a "playing staff that includes international stars such as Dutch striker Robin van Persie and England forward Wayne Rooney" (REUTERS, 11/14). In London, Jack De Menezes reported ManU saw its revenue rise to £98M ($157.4M) -- an increase of 29.1%. A broadcasting income rise of 40.9% "was dwarfed by the club's growth in commercial income," which stands at 62.6% (INDEPENDENT, 11/14). BLOOMBERG's Christopher Elser reported "adjusted profit for the three months" ended Sept. 30 was $3.5M compared with a loss of £600,000 ($963,400) in the "year-earlier period." ManU said Thursday in an email that the profit figure was "adjusted for charges related to the club's initial public offering, the repurchase of senior secured notes and other items." Woodward: "Our unique approach to the commercial business will continue to drive future growth" (BLOOMBERG, 11/14).

    A DOZEN SPONSORSHIPS ACTIVATED: The BBC reported ManU said 12 new "sponsorship deals were activated in the quarter with a range of companies, including Russian airline Aeroflot" and PepsiCo. Licensing of "clothing and other products" brought in £10.7M ($17.2M), a rise of 13.8% on last year. Hargreaves Lansdown Stockbrokers Head of Equities Richard Hunter said, "Manchester United's stuttering start to the domestic season is in stark contrast to its performance off the field. There are some causes for concern, such as the steep percentage rises in operating expenses generally, and staff costs in particular." Hunter added that while the "share price would inevitably be affected by the on-field performance," there is no sign of the ManU "marketing machine beating a retreat" (BBC, 11/14).

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  • Bayern Munich's Annual Turnover Of $529M Best In 113 Years, Reduces President To Tears

    Bayern Munich President Uli Hoeness, facing trial for tax evasion next year, "broke down in tears as the club posted their best financial results in 113 years," according to Karolos Grohmann of REUTERS. Hoeness, who "received several standing ovations, could not hold back his tears as club bosses heaped praise on him following a treble-winning season." Turnover stood at €393M ($529M), up from €332M in '11-12. When turnover for the Allianz Arena Stadium Ltd. was "taken into account," the club said at its annual general assembly that the figure cracked the €400M ($538.7M) mark for the first time and stood at €432.8M ($583M). Hoeness, at the club for "more than 40 years as player, manager and president, addressed his legal woes, saying he had made a mistake in relation to a Swiss bank account." Hoeness: "I made a big mistake by not having investment income abroad taxed. I did not take hundreds of millions out of the country. I will face this mistake" (REUTERS, 11/14). The DEUTSCHE WELLE reported Bayern said its group operating profit rose 11% to €95.6M ($128.8M), with net profit increasing 30% to €14M ($19M). Shareholder dividends "will also be a record" €8.25M ($11.1M), or "30 cents per share." The club also "announced a dramatic increase in sponsorship and marketing revenues," which jumped to €102M ($137.4M) compared to €82M last season. Club membership, "already the highest of any team in Germany, swelled from 195,689 last season to 223,985" (DEUTSCHE WELLE, 11/13).

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  • National Team's Potential Failure To Qualify For 2014 World Cup Could Cost Portugal $269M

    A study by Portuguese marketing school IPAM indicated Portugal's economy will lose "at least" €200M ($269M) if its national team does not qualify for the 2014 World Cup, according to LA AFICION. The study is "based on a score of indicators, including consumer tendencies, restoration, advertising, airlines and online betting." With Portugal in the World Cup, the study shows that at least €400M ($539M) would be generated for the country's GDP, while "if it is eliminated, the impact would mean a loss" of at least €200M (LA AFICION, 11/14).

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