Manchester United (NYSE:MANU) shares have dropped since the organization reported an expected revenue decrease in the first quarter from missing out on the Champions League this year. It always pays to check in on what management teams have to say following a quarterly earnings report, and Manchester United is no exception -- so let's examine five interesting nuggets this team offered during its most recent call.
News for January: "Low probability" of transfers
After spending roughly 150 million pounds in the transfer market this past summer, the team looked strong -- except that the defense still needed another strong center back. The situation has since worsened with the injuries to Marcus Rojo, Rafael, Phil Jones, and Jonny Evans, while Chris Smalling has looked unconvincing. Chairman Edward Woodward spoke on the upcoming transfer market, especially as it relates to strengthening that defensive squad:
We're not looking to enter the market for short-term fixes; however, we have targets that we are looking at for next summer. Should any of those become available in January, which is obviously rare, we will consider acting. But I think in terms of expectation setting, we will need to recognize that's a low probability.
Strong youth development
The one positive to come out of United's defensive injury struggles is the chance for academy players to step up. Tyler Blackett, Paddy McNair, and Tom Thorpe only have a combined 11 appearances so far this season, but that number is likely to increase, as the team will need their defensive talent. While the Manchester United Academy doesn't have the same cachet as Barcelona's La Masia, it has produced a number of strong players. Chairman Woodward noted:
Youth development is a key part of the club's DNA, and we continue to invest in our academy and scouting infrastructure to attract the most talented young players. According to CIES Football Observatory, Manchester United's academy has produced more footballers currently playing in Europe's top five leagues than any other club in the U.K., with a total of 36 players, over 60% more than the U.K.'s second club. This is a clear indication that our efforts have paid off.
Biggest global audience in the Premier League
Manchester United earns some of the highest sponsorship revenues in the league, based on the team's success and global audience. Woodward offered a stat that shows just how popular the team is in comparison with the rest of the Premier League clubs:
Manchester United commands more than 51% of the Premier League's entire global TV audience, which is watched in over 200 countries worldwide.
To put the audience size in perspective, 82 million people watched Manchester United's top match last season. For comparison, the most watched sports program in the U.S. is Sunday Night Football, which averages 21.7 million viewers.
Rising value of sports content
The value of sports content is high and rising, as live events and sports programming remain some of the few things that people want to watch live. The value of contracts to broadcast the Premier League and Champions League are on the rise, and that value is expected to rise further after the current deals lapse in 2016 and 2018. From Woodward:
Recent announcements demonstrate the value of content continues to rise. Last month alone, three new broadcasting deals were announced around the world: First of all, the Bundesliga four-year deal with 21st Century Fox is up 61%; the ITC deal with Star India and Star Middle East is up 150% versus the previous deal; and NBA, an eight-year deal with ESPN and TNT is up an incredible 187%.
Huge opportunity in the United States
Soccer has been growing in popularity on U.S. TV, and that could mean big things for the Premier League. It will also mean big things for the teams that get the biggest fan base, which can lead to better sponsorship deals, such as the record-sized seven-year kit deal Manchester United signed with General Motors' (NYSE:GM) Chevy brand. More from Woodward:
People are sometimes surprised when we say that the U.S. is the biggest emerging market when it relates to football. Let me give you some interesting stats from NBC this season. The opening weekend set streaming records, with over 8.9 million minutes watched, which is up 56% from the same weekend last year. This ranks as NBC Sports Networks' most-watched Premier League weekend, with unique visitors up 42% from last year.
Also, the game between Manchester United and Chelsea on Oct. 26 set an NBC record for the most viewed Premier League match across NBC Sports since a broadcaster began televising the Premier League. So as we've stated before, the value of content is rising, sports is the must-have content, and football is the No. 1 sport.
As long as Manchester United can resume its winning ways, the club's off-field financial performance should reward shareholders for years to come.
Find Dan Dzombak on Twitter, @DanDzombak; on his Facebook page, DanDzombak; or on his blog, where he writes about investing, happiness, the secret to success in life, what success means to you, the New York Lottery, and the Fortune 500. He has no position in any stocks mentioned. The Motley Fool recommends Apple, General Motors, Google (A and C shares), and Netflix and owns shares of Apple, Google (A and C shares), and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.