Manchester United scores big as sponsorship, retail and eCommerce revenue jump

Manchester United witnessed a 8.1% increase in its sponsorship revenue to about US$69.4 million for the first quarter of its 2020 financial year ended 30 September 2019 (Q1 2020). This was due to its new sponsorship deals with LEGO, Visit Malta, Konami, and Yabo Sport, and additional tour revenue. Its retail, merchandising, apparel and product licensing revenue also rose 1.9% to about US$34.7 million year-on-year (yoy). Overall, commercial revenue for the quarter was about US$104.2 million, a 5.9% yoy increase.

In response to the sponsorship revenue,?group MD and director, Richard Arnold, said during the recent conference call that "the phenomenal engagement that it is driving" is the direct result of its "continuous improvement and investment in data analytics, as well as superior digital and content capabilities". He added that it will "continue to be strong, pipeline is good, and new categories are constantly being derived as the world evolves", especially in the digital setting.

According to Arnold,?eCommerce has also experienced a strong yoy growth in Q1 2020, with growth coming from all major markets benefiting from the earlier launch of the replica kits during the summer, including Asia Pacific. The football club also achieved several milestones across its digital platform, including its highest ever number of daily active users of its free global mobile app during the opening day of its season against Chelsea.

As for its mobile app, Manchester United also saw?increases in monthly active users and average time spent per user per month versus the same quarter last year. According to Arnold, those are metrics that confirm its content is compelling and it is delivering the access that the highly engaged fan base actively seeks. The club also witnessed increasing engagement for its Match Centre app feature?during the quarter, which provide live game stats to fans, second screens through its mobile app.

Arnold explained during the call that its focus has been primarily on fan engagement and quality, in terms of the design of the app and its user experience. The next phase of the app is to grow at scale and is something that will be done in conjunction with the work it is doing on its existing social media platforms and TV audiences worldwide. These form its integrated solution and offers scale for commercialisation.

"Our Megastore turnover year-to-date is ahead of our expectations on higher traffic, basket and conversion, due in part, two additional home matches played in the first quarter relative to last year. In addition, our first home match against Chelsea drove a record single day turnover," he added.

Meanwhile, its documentary featuring the Manchester United women's team on its first successful season also led to more than 800,000 social connections online, and on Instagram alone. Arnold said the women's channel has more followers than eight?of the men's Premier League Clubs.

On the other hand, the club saw a 23.1% dip in broadcasting revenue to about US$42.6 million yoy, due to non-participation in the UEFA Champions League. According to the financial statement, guaranteed UEFA broadcasting revenues are typically recognised evenly over the course of the competition's group stages. The majority of the full year revenue impact of non-participation in the UEFA Champions League will therefore occur in the second quarter, when five of the size group matches will be placed, the statement added. Meanwhile, it garnered approximately US$28.6 million in matchday revenue, a 35.6% yoy due to playing two additional home games during the quarter.

Edward Woodward, executive vice chairman and director, said the significant investments that it has made in recent years in areas such as transfers, recruitment infrastructure, analytics and its Academy are already beginning to bear fruit.

"We are very proud to be shortly approaching a milestone 4,000th game featuring an Academy player, and we are particularly optimistic regarding the considerable young talent currently coming through. Our ultimate goal is to win trophies by playing exciting football with a team that fuses graduates from our Academy with world-class acquisitions," he added.

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(Photo courtesy: Manchester United's Facebook page)