Man United Shares Fall as Sales Hurt by Lack of Champions League

(Bloomberg) -- Manchester United Plc shares fell to a two-year low as the English Premier League soccer team blamed failure to qualify for the Champions League for a full-year revenue guidance that fell short of analysts’ expectations.

The stock slipped as much as 6.2% in New York, its biggest intraday decline for eight months, after the English Premier League team predicted 2020 revenue of 560 million pounds to 580 million pounds ($699 million to $724 million). The average estimate among four analysts surveyed by Bloomberg was 618 million pounds.

“The reduction in broadcasting revenue has had more of an impact than people expected,” Gabelli & Co. analyst John Tinker said by phone, adding that rising player wages mean the profit outlook is also weaker than some expected.

“It’s part of the rebuilding process,” he said after United reported a 12% rise in employee benefit expenses. Tinker cited Alexis Sanchez moving on loan to Italy’s Inter Milan, with the English club subsidizing the Chilean’s wages, as one example.

Manchester United are eighth in the Premier League table after a 2-0 loss against West Ham on Sunday, leaving manager Ole Gunnar Solskjaer facing increasing criticism in the media.

“It’s important that we are patient while Ole and his team build for the future,” Ed Woodward, the club’s executive vice president, said on a conference call. “We will continue to focus on the long-term strategy and won’t be influenced by short-term distraction.”

The shares trimmed the decline by 11:19 a.m. in New York, falling 2.3% to $16.85 after earlier hitting the lowest since Sept. 19, 2017. Tuesday’s drop was the fourth consecutive day of declines for a stock that’s lost almost a third of its value in the past 12 months.

To contact the reporter on this story: Joe Easton in London at jeaston7@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Kasper Viita, Tom Lavell

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