Manchester United set a record for a British football club for full year sales in the year to June 2008. Turnover was up sharply in its three main areas of activity. Matchday receipts rose by 10 per cent to £101.5m. Commercial income – sponsorship, merchandising and licensing agreements – rose by 14 per cent to £64m. The biggest increase was in TV revenue which, on the strength of United’s Champions League truimph, surged 48 per cent to £90.7m. Even so, matchday revenue from the enlarged Old Trafford stadium makes a bigger contribution to turnover.
Manchester United set a record for a British football club for full year sales in the year to June 2008. Turnover was up sharply in its three main areas of activity. Matchday receipts rose by 10 per cent to £101.5m. Commercial income – sponsorship, merchandising and licensing agreements – rose by 14 per cent to £64m. The biggest increase was in TV revenue which, on the strength of United’s Champions League truimph, surged 48 per cent to £90.7m. Even so, matchday revenue from the enlarged Old Trafford stadium makes a bigger contribution to turnover. The sale of players boosted profits by £21.8m. Pre-tax profits rose from £60m to £66m in spite of a larger total staff and payments to agents of £15m.
However, interest charges on borrowings of £524m dragged its holding companies into the red. Interest payments by the holding companies are influenced by the use of ‘payment in kind’ loans or Piks on which no interest is payable until the end of the loan term. The club’s immediate and ultimate holding companies, Red Football Joint Venture and Red Football, both based in Nevada and controlled by the Glazer family, reported losses for the year. Red Football Joint Venture trimmed its pre-tax losses from £62 to £40m with interest payments of £69m down from £81m in the previous year. At Red Football, the ultimate holding company, pre-tax losses fell slightly from £24m to £21m. The vehicle absorbed £45m of interest payments under the complex structure of borrowing used by the Glazers to acquire the club in 2005 in a highly leveraged £790m deal backed by JPMorgan.