Will U.S. Fans Boost Man U Earnings?

Updated
Will U.S. Fans Boost Man U Earnings?

Manchester United will release its quarterly report on Wednesday, and investors are bracing for modest losses for the quarter. Yet, in the long run, Man U earnings could benefit greatly from increased exposure for the soccer club if a greater broadcast presence in the U.S. builds more interest in the sport.

Manchester United has been a powerhouse of England's Premier League, with 20 league titles, and numerous other victories at the national and international level. Yet, with longtime manager Alex Ferguson having announced his retirement after 26 years, both fans and investors have to wonder whether the team's dynasty will continue. At least on the business end, though, a recent move to heighten viewership could pay dividends for Man U shareholders. Let's take an early look at what's been happening with Manchester United over the past quarter, and what we're likely to see in its report.

Stats on Manchester United

Analyst EPS Estimate

($0.02)

Year-Ago EPS

($0.11)

Revenue Estimate

$134.7 million

Change From Year-Ago Revenue

13.5%

Earnings Beats in Past 4 Quarters

2


Source: Yahoo! Finance.

Will Man U earnings win or lose this quarter?
Analysts have had mixed views of prospects for Man U earnings recently, narrowing their loss expectations for the June quarter slightly, but also cutting back on their earnings projections for the 2014 fiscal year. The stock has climbed modestly, gaining about 8% since mid-June.

Manchester United has many different ways to earn revenue. Promotional advertising from sponsors provides some income for the club. Among U.S. companies, Nike and the Chevrolet brand of General Motors are among the most prominent partners Man U lists on its team page. Also, in July, Man U broadcast its first online pay-per-view event, with a modest charge offering access to most of the team's 659 million global followers.

But a potentially transformative move could come from the decision by Comcast's NBCSN network to deliver much more complete coverage of England's Premier League. NBCSN invested $250 million over three years, and while that's a pittance compared to what it and rival Disney's ESPN pay for sports that are more popular in the U.S., it represents a move in the right direction that could lead to further revenue for the league and Man U in the future.

Still, Manchester United raises bigger-picture concerns about the conflicting interests of stakeholders in the team. Above all, teams seek to win at all costs, and the drive for obtaining the best players, even as salaries skyrocket, can lead to moves that look smart from a competitive standpoint, but are nevertheless bad business decisions in terms of purely financial considerations.

In the Man U earnings report, watch to see how company management balances the needs of investors against the needs of the team. If you see signs that leadership is willing to sacrifice financial strength for victories on the pitch, you'll want to be very careful investing in the stock.

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The article Will U.S. Fans Boost Man U Earnings? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends General Motors, Nike, and Walt Disney. The Motley Fool owns shares of Nike and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:RelyOnVML/> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]Manchester United (NYSE: MANU) will release its quarterly report on Wednesday, and investors are bracing for modest losses for the quarter. Yet in the long run, Man U earnings could benefit greatly from increased exposure for the soccer club if a greater broadcast presence in the U.S. builds more interest in the sport.

Manchester United has been a powerhouse of England's Premier League, with 20 league titles and numerous other victories at the national and international level. Yet with longtime manager Alex Ferguson having announced his retirement after 26 years, both fans and investors have to wonder whether the team's dynasty will continue. At least on the business end, though, a recent move to heighten viewership could pay dividends for Man U shareholders. Let's take an early look at what's been happening with Manchester United over the past quarter and what we're likely to see in its report.

Stats on Manchester UnitedSource: Yahoo! Finance.Will Man U earnings win or lose this quarter?
Analysts have had mixed views of prospects for Man U earnings recently, narrowing their loss expectations for the June quarter slightly, but also cutting back on their earnings projections for the 2014 fiscal year. The stock has climbed modestly, gaining about 8% since mid-June.Manchester United has many different ways to earn revenue. Promotional advertising from sponsors provides some income for the club. Among U.S. companies, Nike (NYSE: NKE) and the Chevrolet brand of General Motors (NYSE: GM) among the most prominent partners Man U lists on its team page. Also, in July, Man U broadcast its first online pay-per-view event, with a modest charge offering access to most of the team's 659 million global followers.But a potentially transformative move could come from the decision by Comcast's (Nasdaq: CMCSA) NBCSN network to deliver much more complete coverage of England's Premier League. NBCSN invested $250 million over three years, and while that's a pittance compared to what it and rival Disney's (NYSE: DIS) ESPN pay for sports that are more popular in the U.S., it represents a move in the right direction that could lead to further revenue for the league and Man U in the future.Still, Manchester United raises bigger-picture concerns about the conflicting interests of stakeholders in the team. Above all, teams seek to win at all costs, and the drive for obtaining the best players even as salaries skyrocket can lead to moves that look smart from a competitive standpoint but are nevertheless bad business decisions in terms of purely financial considerations.In the Man U earnings report, watch to see how company management balances the needs of investors against the needs of the team. 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