Manchester United fans will be rooting for the club when they play Turkey’s Galatasaray in the opening match of the European Champions League on Wednesday night. But the ones cheering the loudest may be the club’s shareholders — after all their investment depends on it.
In its earnings report, released Tuesday, the club forecasted 2013 revenues will rise 10 percent to between 350 and 360 million pounds ($565 million and $582 million). It also sees adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) being 107 million to 110 million pounds, an increase of around 17 percent from this year.
However, the company said the forecast assumed the team would reach the quarterfinals of the UEFA Champions League and both domestic cups - the F.A. Cup and the League Cup.
British bookmaker William Hill are offering people willing to make a bet six-to-one odds on that happening, or a 14.3 percent chance.
The lucrative broadcasting deals generated by the Champions League are only too clear. TV revenue dropped in the last three months of the season by nearly 40 percent for the club between 2011 and 2012. In 2011 the club reached the final of the competition whereas in the last season it failed to move on from the group stages. That impacted its earnings, which dropped 25 percent last quarter.
Manchester United's income for the year ending 30 June fell by 3.3 percent to 320.3 million pounds ($519.3 million). Profits for the year rose from 13 million pounds to 23.3 million pounds, but the club state that this was “primarily as a result of the increase in our tax credit.”