Manchester United’s net debt has skyrocketed by a staggering £73.6 million according to the newly published quarterly accounts.
In another disappointing set of figures, matchday revenue was down 15%, total revenue down 19% and operating profit down 17% on the previous quarter.
Whilst to some extent the results were expected due to the lost TV revenue arising from the Red Devils’ absence from this season’s Champions League, that alone does not explain the figures, with question marks still remaining as the full version of the accounts wait to be made public.
Despite the dreadful results, shareholders such as majority stakeholders the Glazer family and executive vice chairman Ed Woodward were still issued a dividend of nine US cents per share.
Commercial revenue increased by 7.1% to $70.6 million as a result of commercial director Richard Arnold’s new contracts with Mondelez International, the multinational group behind Cadbury’s and Oreos, and Chinese multinational technology company Alibaba.
The PLC’s commercial side is now depressingly Manchester United’s largest revenue stream and represents 41.9% of all incoming money. Matchday revenue is now only 19.7% of the total.
One of the biggest sources of income is the sponsorship deal with Adidas, which contributes $25 million of the total (35%). However, due to a penalty clause in the contract with the sports outfitters, that total will be reduced by 31% next season if the Reds fail to qualify for the Champions League.
This would reduce commercial revenue by approximately 10%.
The club’s stock price has also taken a tumble in recent days, dropping from $19.50 on Tuesday to $18.74 yesterday. $2 has been wiped off the price of shares over the course of the last 12 months.
The results are expected to put further pressure on Woodward, who has already come under fire this season for a number of botched transfer deals and player contract negotiations and from Bloomberg’s report highlighting the poor IPO (stock) performance of the club.
The director hosted a conference call to present the results to shareholders this afternoon and suggested that there would not be major investment on the transfer market in the summer. ‘Despite being linked in the media to 111 players in January, our acquisition of just one of them – Bruno Fernandes – is an important step in that direction, demonstrating our commitment to adding experienced, world-class recruits to the exciting crop of Academy graduates that are at the heart of this developing team. We will take the same planned, disciplined, approach this coming summer.’
With all the recent publicity about whether some of the current squad is good enough to play for Man United, why not remind yourself of some of the worst flops to ever appear at the Theatre of Dreams by doing our quiz below?