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Wednesday February 12, 2014 MYT 11:52:06 PM
Wednesday February 12, 2014 MYT 11:52:06 PM
by neil maidment
LONDON (Reuters) - English football champions Manchester United will ramp up spending on new players to improve their ailing squad and boost the team's chances of winning the trophies that have been key to their financial success.
United, slumped in 7th place in the Premier League in a tough debut campaign for new manager David Moyes, on Wednesday posted an 11.6 percent rise in second-quarter revenue showing their on-pitch difficulties had not yet effected business.
The club said they would invest to ensure they could compete for top honours and the TV and sponsorship windfalls that come with them. United signed Chelsea midfielder Juan Mata for a club record fee of 37.1 million pounds ($61 million) in January but need reinforcements in defence and a commanding midfielder.
"We aren't afraid of moving in the market in a way that perhaps we haven't seen in recent years ... Historically we've had roughly three sales and three purchases each year and it's possible that we will do more than that," Ed Woodward, Executive Vice Chairman said on a conference call, adding everyone from Moyes down had acknowledged their poor league position.
"Over the medium term we would expect annual net player capex to track higher than our historical average as we invest in our squad as needed in order to make sure we're competing at the highest level," Woodward said.
He said that he could not give the likely range of spending, but added that some players would be sold this summer and that youth players would continue to be nurtured at the club.
The club, which last year won a record 20th Premier League title in Alex Ferguson's last season as manager, are 16 points off leaders Chelsea with more than half the season gone and are in danger of missing out on a place in the lucrative UEFA Champions League for the first time since 1995.
Asked what financial impact missing out on a Champions League spot this season would have on the club, Woodward said its global fan base and commercial pull would see them cope.
United's second quarter results provided a bright spot in the team's gloomy season, with revenue for the last three months of 2013 rising to 122.9 million pounds, in line with analyst forecasts, thanks to rising TV and commercial deals.
Adjusted core earnings before charges such as interest and tax was 1.6 percent ahead at 51 million pounds for the period, the club said, adding it was on course to hit targets for the fiscal year to end-June.
Broadcasting and commercial sales both rose almost 19 percent in the quarter, with the club activating six sponsorship deals in the period including with Fuji TV and Banif Bank.
Despite the poor form, United are set for a big rise in turnover as benefits roll in from improved Premier League TV contracts and new sponsorship deals. The club is forecasting revenue for the current season of between 420 million pounds and 430 million, up from 363 million last season.
Their finances could soon be further boosted by a new kit supply deal. The club, owned by the American Glazer family, said they were in talks with several sportswear companies, including existing supplier Nike, about replacing their current contract that expires next year.
Shares in United, which claim to be the world's best supported football team with more than 650 million followers, were down 0.6 percent on the New York Stock Exchange at $15.14 at 2:41 p.m. British time.
(Editing by Kate Holton and Jane Merriman)
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