Broadcasting income limits hit to revenue at Manchester United

Pandemic stadium and store closures see club report fourfold increase in pre-tax loss to €108m

A young fan wearing the shirt of Manchester United’s new signing Cristiano Ronaldo outside  Old Trafford stadium in Manchester.  Photograph:  Paul Ellis/AFP via Getty Images

A young fan wearing the shirt of Manchester United’s new signing Cristiano Ronaldo outside Old Trafford stadium in Manchester. Photograph: Paul Ellis/AFP via Getty Images

 

Manchester United football club’s annual losses widened this year after the pandemic kept fans out of stadiums and prevented the team from taking part in lucrative pre-season tours

Reporting its full-year results for the 12 months to June 30th, covering the last football season, the New York-listed group announced revenues had fallen to £494.1 million (€578.6m), down about 3 per cent compared with a year earlier.

The club blamed the loss of ticket income, with fans unable to attend matches because of the pandemic, the related closure of its stadium megastore hitting merchandising sales and a fall in sponsorship money because the team was unable to go on a summer tour of exhibition matches around the world.

The club reported a net loss of £92.2 million (€108m), widening from £23.2 million in 2020, though it blamed this mainly on accounting changes related to an increase in the British corporate tax rate.

Manchester United said its operating loss of £36.8 million, compared with a £5.2 million operating profit the year before, was a better reflection of the impact of the pandemic on its business.

The club appears to have weathered the crisis better than many other leading European clubs, with an increase in broadcasting income partly because of the team’s return to the Champions League and the strength of long-term sponsorship deals.

Manchester United’s net debt – a figure that fans’ groups have argued is too high ever since the club’s £790 million leveraged buyout by the US billionaire Glazer family in 2005 – fell 11 per cent to £419.5 million.

Resilience

“Everyone associated with Manchester United can be proud of the resilience we have shown through the challenges created by the pandemic, and we look forward to the rest of the season and beyond with great optimism,” said Ed Woodward, Manchester United’s executive vice-chair.

The club’s wage bill, its largest cost, increased 13.6 per cent to £322.6 million, reflecting contractual increases for players because of participation in the Champions League and goodwill payments to other staff during the pandemic.

That wage bill is set to rise again next season with the signing of Cristiano Ronaldo, who will be the highest paid player in the Premier League, along with Raphael Varane and Jadon Sancho. – Copyright The Financial Times Limited 2021