By Tess Stynes
Manchester United PLC's (MANU) fiscal second-quarter earnings
fell 61% as the British soccer team posted higher operating
expenses and the year-earlier period included a tax benefit.
Manchester United last month acquired British Sky Broadcasting
Group PLC's (BSY.LN) one-third minority stake Manchester United
Television, giving the sports club complete ownership of the
unit.
The famed soccer club is owned by the Glazer family, headed by
American businessman Malcolm Glazer. The role of the Glazers, who
took on debt to purchase the team for $1.47 billion in 2005,
stirred the ire of some fans, who worried the new debt would
restrict the team's ability to keep and attract top talent. In an
effort to reduce its debt load, Manchester United went public on
the New York Stock Exchange in August.
For the quarter ended Dec. 30, Manchester United reported a
profit of 16.2 million British pounds ($25.1 million), or 10 pence
(16 cents) a share, down from GBP42.1 million, or 27 pence a share,
a year earlier. The year-earlier period included a tax credit of
GBP22.9 million. Revenue increased 8.7% to GBP110.1 million ($170.7
million).
Analysts polled by Thomson Reuters most recently projected
earnings of GBP15.83 on revenue of GBP111 million.
Operating expenses increased 11% as staff costs increased 14%
amid new player signings, player wage increases and growth in
commercial headcount.
Commercial revenue jumped 29% amid growth in sponsorship deals,
which rose 49%.
Matchday revenue, which includes ticket sales, was down 2.8%,
mainly because of one less domestic cup home game being played in
the period.
Broadcasting revenue rose 4.8%.
The company had gross debt of GBP366.6 million, compared with
GBP439 million a year earlier.
BSkyB is 39% owned by News Corp. (NWSA, NWS.AU, NWS). News Corp
also owns Dow Jones & Co., publisher of this newswire and The
Wall Street Journal.
Shares of Manchester United, which affirmed its fiscal year
guidance, closed Wednesday at $18.71 and were inactive premarket.
The stock is up 21% since the Manchester United Television
announcement.
Write to Tess Stynes at tess.stynes@dowjones.com
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