Manchester United Shares Fall On Earnings: How Champions League And Tezos Partnership Could Help Boost The Stock

Zinger Key Points
  • A new broadcast deal takes effect in the 2022-2023 season and is expected to increase international revenue for Manchester United by 30%.
  • The team announced a new training kit partnership with cryptocurrency Tezos in February, the deal was worth an estimated 20 million British pounds.

Soccer powerhouse Manchester United PLC MANU reported fourth quarter and full fiscal year earnings Tuesday morning. While shares are falling on the report, there could be good news ahead.

What Happened: Manchester United reported a 7.3% year-over-year increase for total revenue in the fourth quarter. The quarter saw gains of 2.9% year-over-year and +2,206.7% for the commercial and matchday segments in the fourth quarter respectively. The broadcast segment reported a 20.5% year-over-year decline in the fourth quarter.

Two matches were postponed in the fourth quarter due to COVID-19. The team also played four fewer home and away games across all competitions in the fourth quarter, which greatly affected broadcast revenue.

All eight games in the fourth quarter were played in front of full crowds, versus ten in the prior year’s fourth quarter with no fans.

Related Link: Could Manchester United Increase Valuation With Offering Fans More Shares Or Selling The Team?

What’s Next: One of the most prestigious soccer tournaments remains the UEFA Champions League. The top four teams in the English Premier League, where Manchester United plays, automatically qualify for the tournament in the following season.

Manchester United topped Group F in the group stage of the 2021-2022 Champions League, which sent the team on to the knockout stages. The team is tied 1:1 with Athletico Madrid with the deciding game coming on March 15, 2022. The game will be televised by CBS Sports and Paramount+, both owned by Paramount Global PARAPARAA.

Manchester United is a favorite to move on in this first round and is currently the seventh favorite to win the Champions League out of 16 teams with odds of +2000 at DraftKings Inc DKNG.

Last season, Manchester United failed to get out of the group stage of the Champions League, which means the comparables for broadcast and matchday revenue could be higher in the first quarter with more games being played.

Manchester United sits in fourth place in the English Premier League season and can qualify for next year’s Champions League if it doesn’t move down the standings.

The team announced a new training kit partnership with Tezos XTZ/USD in February. The deal was worth an estimated 20 million British pounds and was one of several large partnerships announced in the first quarter that could be reflected in the next quarterly report.

A new broadcast deal for the international rights for Premier League games takes effect in the 2022-2023 season and is expected to increase international revenue for the company by 30%, which could provide a future boost to financials as well.

Another item to watch is the Fans’ Advisory Board, recently launched by the team to create a dialogue with fans. There has been a push over the years for Manchester United to sell the team. This board launch could increase the odds of this happening. A sale could increase the value of shares, with the company having an enterprise value of $2.8 billion and the team valued at over $4 billion in most reports.

MANU Price Action: Manchester United shares are down 4% to $12.93 on Tuesday.

Photo: Courtesy of O.Taillon on Flickr

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Posted In: EarningsNewsSports BettingSportsTrading IdeasGeneralCBS SportsChampions LeagueEnglish Premier LeagueManchester UnitedParamount+public sports teamsTezos