The effects of poor performance (by their standards) on the pitch are being felt by Manchester United. Revenue and profits are expected to fall in 2015 in the absence of Champions League income. Even so, the club’s revenues and earnings are still far in excess of Premier League rivals.
The effects of poor performance (by their standards) on the pitch are being felt by Manchester United. Revenue and profits are expected to fall in 2015 in the absence of Champions League income. Even so, the club’s revenues and earnings are still far in excess of Premier League rivals.
Revenue increased by 19 per cent to £432m in the 2013-14 financial year. In part this reflected the strength and sophistication of the club’s commercial marketing operation and the way in which it identifies ingenious sponsorship activities across the globe.
These efforts are not adversely affected by faltering performance in the short run, but could be if it persists. The Champions League is crucially important in terms of profile and prestige. As it is, revenues are forecast to fall to £385-£395m. There is unlikely to be a major spend on players in the January transfer window given the amount spent in the summer.
The club made £40.5m in pre-tax profits, helped by a 61.3 per cent fall in net finance costs to £27.4m. Adjusted earnings before interest, tax, depreciation and amortisation in 2013-14 were £130.1m. However, adjusted ebtida, a measure of underlying profit, is expected to be no more than £90m to £95m this season.
Employee costs rose 19 per cent to £214.8m. Total wages for 2014-15 should be down because of sales, retirements and the lack of Champions League bonuses. Net transfer spend for the season was £78.9m, up from £36.4m in 2012-13. That includes about £30m spent in the 2014 summer transfer window when United started to splash the cash.
The cost of compensating David Moyes and his coaching staff was £5.2m. This would appear to be an expensive mistake, although the fitful start to the season suggests that the problems were more fundamental than any shortcomings in Moyes’s ability to run a giant club.
Shares in the club were around $20 at the beginning of July, but yesterday they were down 3.2 per cent at $15.05 in New York.