Manchester United confirm loss in revenue after Champions League absence
Thursday 17 September 2015 17:03, UK
Manchester United are counting the cost of a year away from the UEFA Champions League, with the club confirming a £37.8m loss in revenue for the past financial year.
United published their annual accounts on Thursday, revealing the full extent of their failure to qualify for European club football's premier competition during the 2013/14 season. A seventh-place finish in the Premier League saw United - then under the management of David Moyes - miss out on European competition for the first time since 1989.
The club announced a turnover of £433m for the year ending in June 2014, but delivered an advisory notice when confirming their third-quarter results last May that the final figure for the 2014-15 season would be down on the previous year's amount.
And United have now confirmed the loss for the year ending May 31, with the club's absence from the Champions League the main factor behind this financial loss. The club's total revenue is down 8.8 per cent to £395.2m.
"As we look to the new season, we are enthusiastic about our strong position, both on and off the pitch," United executive vice-chairman Ed Woodward said.
"In recent weeks we have further strengthened our squad with an exciting mix of experience and youth, qualified for the group stage of the UEFA Champions League, and seen an impressive launch of our partnership with Adidas.
"Our record revenue and EBITDA guidance for 2016 reflects the underlying strength of our business and our confidence in its continued growth."
Matchday revenues fell by 16 per cent to £90.6m, while income from broadcasting dropped by 20.7 per cent to £107.7m, a decrease of £28.1m.
The blow of this loss has, however, been softened by the 5.5 per cent drop in the club's wage bill to £203m. With United not participating in the Champions League last season, the players were not entitled to any bonuses inserted into their contracts in relation to progression in the competition.
United also announced a 14.1 per cent increase in sponsorship revenue to a record £154.9m and that they are paying a dividend to shareholders for first time since IPO in 2012. Shareholders will get 4.5 cents per share.
Manager Louis van Gaal led United to a fourth-place finish last season, earning a return to the Champions League following August's play-off victory over Club Brugge.
The club also signed a record-breaking 10 year deal with Adidas in July 2014, worth a minimum of £750m, although the partnership only began this August and the figures relating to that deal have not been included in the latest financial accounts.
It is understood United's hierarchy are bullish that their turnover for the current financial year will be over £500m. If United do achieve this, they will become the first English football club in history to make half a billion pounds in a year.
Football finance expert David Bick says United's continuing ability to reduce its debt is one of the key factors in their latest financial statement.
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Speaking to Sky Sports News HQ he said: "One of the things that stood out for me is they keep getting the debt down. This was one of the big concerns of the fans.
"You have to say in the context of the overall value of the club the net debt now looks more than manageable and the other thing that really stands out is that they are predicting over 25 per cent increase in revenue to over half a billion pounds next year and profits up something like 40 per cent.
"You have to say that they are in pretty good shape."
