Manchester United make £3.3m financial loss in Third Quarter Fiscal 2020 Results
"We're well-positioned, both operationally and financially, to navigate this global crisis," says Ed Woodward
By Sky Sports News
Last Updated: 22/05/20 7:05am
Manchester United have felt the financial effects of the coronavirus crisis, with executive vice-chairman Ed Woodward vowing to navigate them through "one of the most extraordinary and testing periods" in the club's history.
Woodward last month conceded United are not "immune" to the financial ramifications of the ongoing pandemic, although said the club can remain "highly competitive" in the upcoming summer transfer window.
Fewer games have been played in the third financial quarter of 2020 due to the coronavirus crisis, with United making less money from broadcasting and matchday revenues.
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"Manchester United is a resilient club and a resilient company," Woodward said. "We're well-positioned, both operationally and financially, to navigate this global crisis and we very much look forward to returning to play and building upon the strong on-pitch momentum we experienced up to mid-March when we stopped."
Woodward also said the board "remain firmly optimistic about the long-term prospects [both on and off the field] once we have worked our way through what is undoubtedly one of the most extraordinary and testing periods in the 142-year history of Manchester United".
Ole Gunnar Solskjaer's team last played 10 weeks ago, when they thrashed LASK in a Europa League last-16 clash forced behind closed doors due to Covid-19 measures in Austria.
The Premier League was suspended the following day and that has taken its toll on the balance sheet, with United no longer predicting the revenues of up to £580m forecast in the second quarter of fiscal 2020.
Instead, United said in their third quarter result they were withdrawing their previous guidance "given ongoing uncertainty due to COVID-19 and the evolving related economic and financial consequences".
United recorded an overall loss of £3.3m between January 1 to March 31, which was primarily down to the 51.7 per cent decrease in broadcast revenue.
At £26m compared to £53.8m the previous year, United said that was "primarily due to an estimated £15m Premier League rebate due to broadcasters, following delay and broadcast schedule changes to the 2019/20 football season, non-participation in the UEFA Champions League, and the impact of playing two fewer Premier League away games".
United expect to pay a £20m rebate to broadcasters this year, with the £15m reduction mentioned in the results reflecting the 29 games played to-date.
Revenue has dropped 18.7 per cent over the prior year quarter to £123.7m as debt rose 42.2 per cent to £429.1m, but Woodward believes United are well placed to bounce back.
"Our focus remains on the health and well-being of our colleagues, fans and partners around the world and we are extremely proud of how those connected to the club have responded during this crisis," Woodward added.
"Since the start of the pandemic, Manchester United and our Foundation have provided assistance to hospitals, charities and schools in our communities, as well as support for frontline workers and vulnerable fans.
"These actions reflect our core values as a club and the resilience through adversity that we have demonstrated many times throughout our long history and will do so again to weather these current challenges.
"In that spirit, we look forward to the team safely returning to the pitch and building on the exciting momentum that Ole and the players had previously achieved, while taking all necessary steps to protect public health.
"Our thoughts remain with all those affected during this unprecedented time."
Premier League clubs have stepped up preparations for a return to action, with players back to team training this week.
"While it is too soon to know with any certainty if, or when, those measures can fully be relaxed, we are optimistic that it will soon be possible to resume playing football," Woodward said.
"Our men's first-team has begun a phased return to training this week, with rigorous medical protocols in place to manage risks.
"Subject to Government and Premier League shareholder approval, including input from medical staff and players, we anticipate domestic games could restart again in June. Furthermore, all indications from UEFA are that the culmination of the Europa League could be during August."
'A far more accurate picture with the next set of figures'
Analysis from Sky Sports News' North West reporter James Cooper...
Resilience is a quality that Manchester United as an organisation prides itself upon but it was a word mentioned frequently during this investor call, as Ed Woodward also spoke of "unprecedented times" and one of the most challenging and extraordinary periods in the club's 142-year history.
The fact that the club has taken the rare step of not making a forecast for their Revenues for the year, having stated in the last figures that they were expecting between £560m and £580m, shows just how uncertain things are right now.
Up until the global pandemic struck, United were on course for those sort of figures now they've announced a very rare loss of £3.3m in this third-quarter statement.
One of the problems of trying to get a real glimpse into the future financial implications from COVID-19 for United, and other clubs, is that these latest figures take us to March 31.
At that stage, United had missed just three games, last playing behind closed doors in Austria to take their unbeaten run to 11 in all competitions with a 5-0 win over LASK.
What the club has told us is that they estimate the cost to them of the pandemic so far is £23m, that's a figure made up of a rebate they expect to pay broadcasters plus the absence of matchday revenue and associated costs such as the temporary closure of the Megastore and Stadium.
We'll get a far more accurate financial picture with the next set of figures and while its clearly a challenging environment, the fact wages have fallen and sponsorship revenue has actually gone up will give those inside Old Trafford a small sense of optimism for the journey ahead.
Away from the financials, Ed Woodward confirmed the Premier League plan for games to return next month and that of UEFA, that their competitions must be completed by the end of August.
But he also revealed a strategy for the current domestic season to be finished in time for the next one, 2020/21, in order for it to be done and dusted by May next year.
And while the focus will clearly be on how COVID-19 has impacted on the financial might of one of football's biggest hitters, it shouldn't be ignored how the club's responded to the outbreak either.
Ed Woodward spoke proudly about United's staff and the Foundation whose actions have seen, among other things, 60,000 meals prepared and delivered for NHS staff and careworkers, 30,000 items distributed to local foodbanks, financial support for partner schools and the transformation of the famous Manchester United sign to become 'NHS United' on Thursday nights complete with blue lighting.
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