Man Utd to benefit from rising value of TV deals
LONDON (Reuters) - English soccer champions Manchester United (MANU.N) highlighted the soaring value of television rights for live games on Thursday after broadcast and sponsorship deals pushed quarterly revenues to a record high.
English Premier League clubs are benefiting from a battle between pay TV company BSkyB (BSY.L) and former state telecoms company BT for supremacy in the sports market.
BT, expanding aggressively into a market long dominated by BSkyB, last weekend agreed to pay 900 million pounds for rights to Europe's Champions League and Europa League competitions for three years from 2015. That is more than double what BSkyB and ITV (ITV.L) currently pay.
"The value of content is rising. Sport is the must-have content and football is the world's No. 1 sport," said Ed Woodward, United's executive vice-chairman.
Woodward said the new BT deal would be worth upwards of 10 million pounds a season to English clubs playing in the Champions League, the most prestigious European competition.
United generated revenue of 98.5 million pounds in the three months to September 30, the first quarter of its financial year and a period that included the start of the soccer season.
The figure was boosted by new sponsorship deals with Russian airline Aeroflot (AFLT.MM) and U.S. soft drinks company PepsiCo (PEP.N), businesses keen to associate with one of the world's best-known sports teams.
United, controlled by the American Glazer family, reported core profit (EBITDA) of 22 million pounds in the quarter, up 36 percent year on year and ahead of forecasts.
The club is forecasting full-year revenue of 420-430 million pounds, closing the gap on European rivals Real Madrid and Barcelona, who benefit from negotiating their own TV deals rather than the pooled deals agreed by the Premier League.
United stand fifth in the Premier League but their form under new manager David Moyes has improved in recent weeks and they beat leaders Arsenal on Sunday.
The club's shares, listed on the New York Stock Exchange since August 2012, closed at $15.75 on Wednesday, valuing United at $2.6 billion. 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 percent to 53 million pounds, reflecting a playing staff that includes international stars such as Dutch striker Robin van Persie and England forward Wayne Rooney.
United have long been good at keeping wage costs to about half of its revenue, a relatively low ratio in a spendthrift industry.
"If you look at the top 10 teams in Europe or the top players, we are seeing inflation at that top end," Woodward told analysts on a conference call.
A vocal group of United fans have criticised the Glazers for saddling the club with excessive debt after a 790 million pound takeover in 2005.
Debt stood at 361 million pounds at the end of September and repayments meant the club made a small net loss of 300,000 pounds after finance costs and the bill for player transfers were taken into account.
German team Bayern Munich, whose membership-owner model is the envy of many English fans, this week reported revenue of 433 million euros in 2012-13 after winning the Champions League and a domestic double.
(Editing by David Holmes and David Goodman)
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