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Investing for a Man United revival

Profiting from a turnaround in fortunes.

A recent win over arch-rivals Liverpool at Anfield has propelled Manchester United to within one point of third-placed Arsenal in the English Premiership and if they can continue their current form, then the club is in for a financial windfall as they get back into lucrative top-flight European football. 

Following the departure of legendary football manager, Sir Alex Ferguson, the club’s fortunes waned in 2014 and a poor league position meant that it could not generate revenue from participating in the top European club competitions which generate significant revenue for the top-level clubs. 

Last year the club finished seventh, its worst performance since 1992. 
 
The share price of this New York Stock Exchange-listed club has reflected the results of the club to some degree. Since hitting a high of $19.73 when current manager Louis Van Gaal was appointed, the share price has slid and the English giant has had a less than auspicious start to its 2014/15 campaign and battled through the early round of league and domestic cup competitions. The company is now trading at around $16 per share trading.
 
A recent report from Deloitte however shows that the strong brand enjoyed by the club translates into good revenue and as reported on Bloomberg earlier in 2015 the club could topple Spanish giants Real Madrid as the richest club in the world. 
 
When Manchester United released results in February 2015 for the quarter ended December 31 2014, the club showed total revenues of £105.7 million and a profit before tax of £42.4 million. While announcing sponsorship deals in Nigeria and China, the real kicker came from television rights. The Domestic Premier League Live Broadcasting rights are to increase by 70% with BSkyB and BT paying £5.14 billion for the 2017 -2019  EPL seasons compared with £3.0 billion for the 2014-16 seasons. 
 
Ed Woodward, Executive Vice Chairman told shareholders at the time: “The recently announced Premier League broadcasting rights package for 2017 -2019, representing an increase just over 70%, once again demonstrates that we are part of the top football league in the world. Notwithstanding no European football this season, our Revenues and EBITDA remain strong and demonstrate the underlying strength of our business model, with commercial revenues up year over year. On the pitch, the team is well positioned to challenge for a top four finish in the Premier League and we look forward to the rest of the season.”
 
Importantly broadcasting revenue for the second quarter was £28.4 million, a decrease of £18.5 million, or 39.4 %, over the prior year quarter, primarily due to non -participation in the UEFA Champions League in the current season. On top of this no European football plus few home games in domestic cup competitions meant that the club lost out on ticket revenue from fans at the game.
 
If United finish strongly then financial fortunes could turn around quite significantly and this may end up reflecting in the share price.   
 
Investors looking to invest in a Manchester United revival can invest through the Standard Bank Webtrader platform amongst others. Offshore investing enquiries can be sent to marc@moneyweb.co.za. 

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COMMENTS   1

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Would not invest in this – or any other football club.
Not an investment worth having!
Don’t like the red shirts either.

End of comments.

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