Manchester United announces record quarterly revenues
Manchester United says it remains on track for record revenues for the current financial year, after making record quarterly revenues.
The Premier League’s new TV deal meant broadcast revenues were up 40.8% in the last three months of 2016, while match day income rose 27%.
Total revenues were £157.9m, up 18% from £133.8m a year ago. The club now expects revenues of £540m this year.
The Red Devils currently lie sixth in the Premier League.
“The robustness of our business model continues to be reflected in our strong quarterly financial results and we remain on track to deliver record revenues for the year,” said Ed Woodward, executive vice chairman.
While broadcast and match day revenues were strongly ahead, commercial revenue was largely unchanged at £66.8m. They had enjoyed a strong boost this time last year with the commencement of the Adidas kit deal.
The club also said that in the quarter three major sponsorship deals were signed, new partnerships with Deezer and Mlily, and the renewal of one with Concha Y Toro.
Operating profit for Q2 was up 15% at £37.6m, and net operating profit was up 23% at £69m.
Analysis: Simon Stone, BBC football correspondent
In, out, in, but ultimately out.
Bastian Schweinsteiger’s status as a Manchester United player can be shown by his position as an “exceptional item” on the club’s balance sheet.
The 32-year-old was back in today, albeit at a reduced £4.8m, but it is not expected he will still be at Old Trafford when the summer transfer window closes.
Of major interest in today’s investors conference call was executive vice-chairman Ed Woodward’s admission that the huge growth in United’s commercial revenues will be hard to maintain.
Instead, it seems attention is turning to increasing media revenues.
The MUTV app Woodward announced today will not be available in the United Kingdom but it is expected to be available in China, India and Indonesia.
At a cost of between £1.99 and £4.99, it is not going to be a “game changer” but it does represent the first steps in what will become a major advance into the digital word for United, at that is where their next drive for increased revenues will come from.
Coy on tour plans
However, the weakening of the UK pound across the US dollar over the year meant that United’s net debt as of 31 December 2016 was £409.3m, an increase of £87.2m over the year.
“The gross US dollar debt principal remains unchanged,” said a club statement.
“The increase in net debt is due to the strengthening dollar, with the USD/GBP exchange rate moving from 1.4747 on 31 December 2015, to 1.2293 on 31 December 2016, resulting in an £88m increase in gross debt.”
Meanwhile, one quirk of the latest financial results has been an exceptional credit of £4.8m being applied to the accounts during the quarter, after German international Bastien Schweinsteiger was “now considered to be re-established as a member of the first team playing squad”.
The Old Trafford club had taken a financial charge of £6.7m in September after the player was considered surplus to squad requirements.
In addition, in a conference call the club said it was to launch an app for its in-house TV station, MUTV, in more than 160 countries.
But it would not confirm widely-reported stories that it plans to tour the US this summer, except to say that the tour would be “larger than last year” – a rain-hit trip to China.
United are in the final of the EFL Cup on 26 February. In addition, later this month the club faces Blackburn Rovers in the FA Cup fifth round and Saint Etienne in the Europa League round of 32.
The club also remains in contention for a Champions League place finish, being two points behind fourth placed Arsenal.
The results come a day after Manchester United and its official timekeeper partner, TAG Heuer, unveiled a pair of club special-edition watches. The first of the watches, the F1, is on sale for £1,300.
Earlier this week the club, majority-owned by the American Glazer family, also announced it was freezing season ticket prices for the 2017-18 season, the sixth season in a row it has kept prices on hold.
It also announced price reductions for young season ticket holders.
Source: BBC – UK News