Manchester United PLC reported that revenue from its Nike managed retail and merchandising business slipped again in the third quarter ended March 31.
MAN U reported Retail, Merchandising, Apparel & Product Licensing revenue was £7.6 million ($11.5 mm) during the period, a decrease of £0.8 million, or 9.5%, over the prior year quarter, primarily due to reduced Nike guaranteed revenue due to the club's failure to qualify for the UEFA competitions in the current season.
The club was still able to boost it Commercial revenue to by £5.0 million ($8 mm), or 11.7%, over the prior year quarter thanks to a £6.8 million ($10 mm), or 22.1%, increase in sponsorship revenue that came primarily from selling ads on the team's jerseys. The company's overall revenues slipped £20.5 million ($31 mm), or 17.7 percent to £95.0 million ($144 mm) on steep declines in Broadcasting and Matchday revenues.
Nike's contract to manage the business expires Aug. 1 , when Adidas will take it over under a 10 year contract that guarantees the club £750 million in revenue. Nike had held the contract since 2002, when it agreed to pay a minimum of £303 million over 13 years plus half of annual profits from the club's merchandising and licensing operations.
