- Manchester United’s stock tanked about 4% on Tuesday after it reported a net loss of $US27.7 million (£22.2 million) in the fourth quarter.
- The British soccer club struggled on the pitch last season, failing to gain a spot in the coveted Champions League competition.
- Manchester United’s global brand has historically allowed it to underperform on the field while still performing financially, making the loss a tough pill to swallow for investors.
- The group’s share price has plunged about 31% in the last 12 months.
- Watch Manchester United trade live.
Manchester United’s stock tanked about 4% on Tuesday after it reported a net loss of $US27.7 million (£22.2 million) in the fourth quarter.
The British soccer club struggled on the pitch last season, failing to gain a spot in the coveted Champions League competition. Its stock has plunged 31% this year as the team has fallen behind domestic rivals such as Liverpool, Manchester City, and Tottenham.
“Everyone at the club, the board, the manager, the squad, and all of the staff remains resolute in that desire to get Manchester United back to the top of English football,” Ed Woodward, the club’s executive vice-chairman, said on the group’s earnings call.
Woodward highlighted positives such as the signings of Aaron Wan-Bissaka, Harry Maguire, and Daniel James, contract extensions with key players including Marcus Rashford and David de Gea, and new talent coming up through the club’s academy.
The club is “committed to delivering on our primary objective of winning trophies,” Woodward said in the earnings release.
Manchester United, which has a market cap of $US2.75 billion, is among the few publicly traded sports teams. The club was valued at over $US3.8 billion by Forbes last year, making it the sixth most valuable sports franchise in the world.
Its revenue climbed 6% to a record $US783 million (£627 million) last financial year, driven by an 18% rise in broadcasting sales and a flat $US343 million ($US275 million) of sponsorship, retail, merchandising, apparel, and product licensing revenue. It also posted $US23.6 million (£18.9 million) in net profit for the period, but recorded a loss in the fourth quarter as operating costs outstripped revenue.
Manchester United’s revenue has proven resilient to past underperformance on the pitch, as its global brand allowed it to still profit from lucrative partnerships and sponsorships around the world. However, investors may be fearful that continued underperformance could tarnish its reputation and threaten its profits.
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