* Wage bill restrained in big-spending game
* Early exit from Champions League to prove costly
By Keith Weir
LONDON, Feb 21 (Reuters) – A rise in commercial and
media revenue helped English Premier League champions Manchester
United to report growth of almost 8 percent in first half
earnings on Tuesday, underlining the cash-generating power of
the American-owned club.
United, the most successful soccer club in the English game,
said earnings before tax, interest, depreciation and
amortisation (EBITDA) increased 7.7 percent to 64.2 million
pounds ($102 million) in the six months to the end of December.
Though United’s on-field supremacy is being challenged at
home by crosstown rivals Manchester City, backed by cash from
Abu Dhabi, and they suffered an early and costly exit from the
Champions’ League, Europe’s premier club competition, their
brand remains attractive.
Deals with kit supplier Nike, shirt sponsor Aon Corp
and delivery company DHL, which sponsors the club’s
training kit, contributed to a 16 percent rise in commercial
revenue to 58.6 million pounds.
Total revenue grew to 175 million pounds in the period, up
11.8 percent. Media revenues contributed 60.9 million pounds, up
13 percent, while matchday revenues at 55.5 million made up less
than a third of the total.
United now employ almost 700 people, up almost 100 on a year
ago. However, staff costs account for only 43.7 percent of
revenue, a relatively sober figure in the spendthrift world of
British soccer.
A recent report by Deloitte put United in third place for
soccer revenues in 2010-11, behind Real Madrid and European
champions Barcelona.
FANS TARGET GLAZERS
United declined to comment on plans for a stock market
flotation after putting plans for a $1 billion listing in
Singapore on hold last September because of volatility in global
markets.
The American Glazer family, who bought the club in a
leveraged buyout in 2005, had been expected to use some of the
proceeds from the listing to bring down debt, which supporters
believe has held it back.
A group representing United supporters criticised the way
the Glazers had run the club, saying they had taken 225 million
pounds out of it since 2009 to cover debt payments and interest.
“What could the club have done with that extra 225 million
pounds? Cheaper tickets for loyal fans, investing massively in
the squad and stadium, developing and retaining the best youth
players, competing on an equal basis with the very best teams in
Europe,” said a spokesman for the Manchester United Supporters’
Trust.
Gross debt was 439 million pounds as of the
end-December, down from 508 million pounds a year earlier.
United are second in the English Premier League, behind
Manchester City.
United’s second-half financial performance is certain to be
hit by their early exit from the Champions League this season
after they reached the final last May. They have also been
eliminated from the FA Cup, the main domestic knockout
competition.
“On-pitch performance always has an impact on revenues, but
the underlying strength of the business is there for all to see
with the continued growth on the commercial side, which we
expect to continue in the next few years,” a club spokesman
said.
United are now playing in the Europa League, the secondary
European tournament, and media income for their last 32 tie with
Ajax Amsterdam was only 200,000 euros, against 3 million euros
($4 million) for the first knockout stages in the Champions
League.
Article source: http://www.reuters.com/article/2012/02/21/soccer-manutd-earnings-idUSL5E8DL8KS20120221
