The recent financial figures published by Manchester United highlight once again just what an immense cash cow that football club has become.
While the sports pages have been dominated by headlines concerning the retirement of Sir Alex Ferguson, the lack of big-name signings in the summer and the shaky start to the season made under new boss David Moyes, the off-the-field activities at the Manchester club have been going from strength to strength.
Hot on the heels of news in September that the club raked in more than £360m during the financial year to the end of June, United have just announced a near-30 per cent rise in revenue during the first three months of 2013-14.
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Commercial revenue was up by nearly 40 per cent during those three months compared with a year earlier, while money from television rights – due mainly to the latest Premier League arrangement with Sky and BT Sport – shot up by a similar amount.
The champions are now forecasting revenue for the year of between £420m and £430m, and that would close the gap on Barcelona and Real Madrid.
As is good business practice, United are basing their forecasts on what would be – for them – a disappointing season.
Their financial estimates for the year are based on a third-place finish in the Premier League in 2013-14 and reaching the last eight of the Champions League. In years gone by, they would have expected to do better than that in at least one of those two competitions.
Today, although they are not exactly in crisis on the pitch, the jury remains out on whether they will beat those targets – but if the rest of the year continues as it has started, it is going to be another record-breaking one for the bean counters, no matter what happens on the pitch.
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The end of the Sir Alex Ferguson era has done nothing to lessen the appetite of the club’s commercial partners. United revealed 12 new sponsorship deals during the first quarter, including tie-ups with Aeroflot, Pepsi, MBNA and Emirates Bank.
These sponsorship arrangements brought in a record £98.5m, up from £76m a year earlier.
And there could be yet more to come.
The club is locked in talks with its kit manufacturer, Nike, over a new contract.
It is thought that the deal will be worth in the region of £300m for five years – another £60m a year in commercial revenue.
To put that figure into context, it is double the £30m-a-year deals that the likes of Arsenal, Chelsea and Real Madrid have got with their kit suppliers. As United have done in so many ways before, both on and off the pitch, it would take things to a completely new level.
So things are looking fairly rosy at the club, despite the slow start to life under Moyes.
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“We are pleased to have achieved another record first quarter, driven by the strength of our commercial business and increased broadcasting revenues,” said executive vice-chairman Ed Woodward.
“Our unique approach to the commercial business will continue to drive future growth. We are also excited by the continuing rise in the value of sports content.”
That last sentence was a reference to the recently-announced three-year BT Sport deal for Champions League and Europa League football, which comes into force the season after next.
The new package will be worth more than double the existing agreement – meaning tens of millions of pounds more for perennial participants such as United.
“This deal represents a meaningful increase over the current arrangement, which should translate into higher broadcasting revenue for the participating clubs,” Mr Woodward said.
But analysts raised a few concerns over some of the detail in United’s first-quarter figures, such as the rise in operating costs. These were up more than £15m to £90.2m, in large part due to staff costs (ie, wages).
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, told the BBC: “There are some causes for concern, such as the steep percentage rises in operating expenses generally, and staff costs in particular.”
And there was a more stinging rebuke in the US, with Brian Bolan – a stock strategist for Zacks.com – labelling the club’s stock as “bear of the day”.
“Performance on the field is one thing, but investors care more about the bottom line than the goal line,” he wrote in a briefing note.
“Manchester United has missed each of the last three quarters, reporting earnings that came in below the Zacks Consensus Estimate.”
In other words, the figures were record-breaking – just not record-breaking enough.
Mr Bolan said he thought the club’s share price was too high at the moment.
“Over the last few months, estimates for Manchester United have been kicked all over the place,” he wrote.
“You might think that all these misses have resulted in a reasonable valuation.
“That is not the case. The stock trades at a premium to the industry average for trailing and forward PE, a wildly-used measure to value a stock.”
But there is a sting in the tail, and it all comes back to the blind loyalty shown by football supporters.
Although Mr Bolan said “investors might be wise to look elsewhere to get their kicks”, he added: “The rabid fan base may be more than willing buy stock should they see a dramatic decline in share price.”
Whatever factors (on or off the field) affect the performance of the company’s share price, there is likely to be enough blind loyalty from the club’s tens of millions of supporters to help shield it from the share prices falls experienced in other sectors.
The army of potential shareholders who will buy into the project, come what may, gives it an advantage that other businesses can only dream of.
That safety net – and with “no sign of the Manchester United marketing machine beating a retreat”, according to Mr Hunter at Hargreaves Lansdown – we can expect many more ceiling-smashing results from Old Trafford in the future.