United’s season to forget impacts on financial performance
18 May 2012
Manchester United’s under-performance on the pitch has seen its revenues fall in the three months ending March 31.
United was pipped to the Barclays Premier League title by bitter rival Manchester City on Sunday and has also endured an early exit from the UEFA Champions League and FA Cup this season. United was knocked out of the lucrative Champions League at the group stages and left the FA Cup at the fourth round. These factors have contributed to the club’s revenue falling from £75.2 million to £70.8 million year-on-year, according to its quarterly financial results.
Over the three-month period, media revenue dropped £3.8 million to £16.9 million, matchday revenue by £4.1 million to £26.6 million and wages increased by 9.9% versus 2011’s figures. These figures were cushioned somewhat by a £3.5 million increase in commercial revenue to £27.3 million thanks to higher income from United’s profit share agreement with kit manufacturer Nike, along with its new training kit sponsorship with DHL and other commercial deals. United’s power in the commercial field is still expected to see the club record an overall increase in revenues for the whole financial year. Regarding the club’s quarterly revenue fall, a United statement read: “Media income has been impacted by our exit from the UCL, thus no Round of 16 match played and our subsequent participation in the UEL (Europa League), for which, despite one extra game, the income per game is lower than for the UCL. In addition, we earned lower revenues for the FA Cup in 2011-12 due to our fourth-round exit, compared with reaching the semi-final in 2010-11.”
United’s quarterly report comes amid speculation that it is poised to reactivate its plan to float a significant stake in the club on the Singapore Stock Exchange. Reports last month claimed that improved market conditions have led the club’s owners, the Glazer family, to resume the plan after postponing it last year due to market volatility. The Glazers are reportedly seeking to raise up to £600 million by selling 25 to 30% of the club via an initial public offering (IPO) that would value it at up to £2 billion.