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SBD Global/February 13, 2014/Finance

ManU Posts Second-Quarter Revenue Record With £123M Despite On-Pitch Struggles

ManU Exec Vice-Chair Ed Woodward announced that the club has "posted a record second-quarter revenue" of £122.9M ($204M), but admitted that "everyone from the team manager down" has acknowledged that the start to Manager David Moyes' "career at Old Trafford has been disappointing," according to Jack De Menezes of the London INDEPENDENT. ManU published figures "showing an 18.8% rise in commercial income" to £42.3M ($70M), which "pushes the year total up to a 30% increase." In the quarter leading up to Dec. 31, the club activated six new sponsorship deals "with more to follow, although the wage expenditure does show a 17% increase" (INDEPENDENT, 2/12). BLOOMBERG's Ben Priechenfried reported "adjusted profit for the three months to Dec. 31" was $32.7M, or "12.08 pence per share," compared with £19M, or 11.60 pence, in the "year-earlier period." Higher sponsorship income "helped to boost total revenue" 12% to £122.9M. ManU said in a statement that the profit figure was "adjusted for factors related to the club's initial public offering in 2012, the repurchase of senior secured notes and other items." In "unadjusted terms," profit rose to £19M from £16.2M (BLOOMBERG, 2/12). In London, Roger Blitz reported ManU "brushed off any suggestion that failure to qualify for next season's Champions League could affect commercial income." Lying "seventh in the Premier League, its prospects of qualifying for next season's Champions League look increasingly uncertain." Asked on an "analysts call whether failure to qualify for the Champions League would harm commercial revenue plans," Woodward said that he had "not seen any impact on wider performance" from United’s on-field form. Woodward: "It takes a long, long time to build up a huge fan base, to have the equity values of what we are as a business and as a club projected out there so that people can understand from a commercial perspective why it makes sense to partner with us. I don’t think that will go away for a long time" (FT, 2/12).

BROADCAST, COMMERCIAL SALES UP: REUTERS' Neil Maidment reported "broadcasting and commercial sales both rose" almost 19% in the quarter. The club's finances could "soon be further boosted by a new kit supply deal." The club, "owned by the American Glazer family," said that it was in talks with "several sportswear companies, including existing supplier Nike, about replacing their current contract that expires next year" (REUTERS, 2/12).

OVERHAUL POSSIBLE: In London, James Ducker reported Woodward raised the prospect of a "significant overhaul of Manchester United's squad this summer by claiming that the club could flex their financial muscle 'in a way that perhaps we haven't seen in recent years.'" Woodward also said that he was "awaiting with interest" to see how UEFA's new FFP rules are going to "bite" and "impact the industry" as he "responded to a question about the financial position of Manchester City, United's local rivals" (LONDON TIMES, 2/12).

SIGNING SPREE: REUTERS' Neil Maidment reported Woodward said that he "could not give the likely range of spending, but added that some players would be sold this summer and that youth players would continue to be nurtured at the club" (REUTERS, 2/12).
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