ManU's Sponsorship Success Offsets Rising Wage Costs, Resulting In Record Revenue
New EPL champions ManU recorded a 30% "increase in revenues in the third quarter on the back of more sponsorship deals," according to Roger Blitz of the FINANCIAL TIMES. However, the club "also saw its wage bill rise" by 25% from player signings and wage demands. ManU reported revenues of £91.7M ($142M) in the three months through March 31, and increased its full-year projections by £10M ($15M) to £360M ($559M). It also "notched up its full-year projection for adjusted earnings before interest, tax, depreciation and amortisation" by £3M ($4.6M) to £110M ($171M) after lifting third-quarter operating profit 22.5% to £25M ($38.8M) (FINANCIAL TIMES, 5/2).
BALANCING THE BOOKS: In London, James Ducker reported the dramatic rise was "driven in part by a staggering 52.2 per cent increase in sponsorship income." That figure "did not take into account the eight-year deal" worth £160M ($249M) that ManU signed with sponsor Aon. It includes "naming rights to the club’s Carrington training complex and sponsorship of the training kit and overseas tours'' (LONDON TIMES, 5/2). The PA's Simon Stone reported the broadcast and matchday sectors show a 21.7% and 34% "increase on the corresponding three months respectively." Gross debt stands at £367.6M ($570M), which represents a decrease of 15.9% since June 30. Wages have also risen 25.1% to £44.9M ($69.7M) "due to the impact of new signings" and the growth of ManU's commercial team, which also has a base in Hong Kong (PA, 5/2). ManU Exec Vice Chair Ed Woodward said, "Each of our three primary sectors -- commercial, broadcasting and matchday -- delivered strong top-line gains and helped us achieve a record third quarter for both revenue and adjusted EBITDA [earnings before interest, taxes, depreciation and amortisation]" (London GUARDIAN, 5/2).
NEW FRONTIERS: In London, James Ducker wrote the club has "identified about 80 untapped markets in which to strike sponsorship deals" as it seeks to expand its "burgeoning commercial operation." ManU believes it has "yet to scratch the surface in commercial terms," with such revenues expected to account for more than 50% of turnover within the next two years. Exec Vice-Chair Ed Woodward, who will succeed CEO David Gill in July, told investors on Thursday that the club was "targeting 94 sectors commercially," only “13 to 14” of which they currentloy operate in (LONDON TIMES, 5/3).