By Andrew Warshaw
February 13 – When Manchester United drafted in Louis van Gaal as manager after their embarrassing seventh-place Premier League finish last May, there was one over-riding priority: to get back into the Champions League.
Now we can see why.
The loss of Champions League income for the competition’s three-time winners has been cited as the major reason overall revenue slumped from £221.4 million to £194.4 million for the six months to 31 December – including a 14% drop to £106 million in the final quarter.
With broadcast and match-day revenue tumbling, profits for the six-month period were down by 52 %, at £8.9 million.
The 20-time domestic champions also lost around £1.2 million in merchandising due to the terms of their existing deal with Nike that includes penalties for non-participation in the Champions League.
United have spent around £150 million on new players to try and restore past glories. But even under the experienced van Gaal, and a squad packed with expensive stars, their displays have been distinctly unconvincing, leading one rival manager to describe them mischievously as a long-ball team.
But the bottom line is that they are getting the job done by consistently maintaining a top-four position. The style may not be to the liking of diehard purists but getting back into Europe’s elite competition at any cost is all that ultimately matters.
United vice-chairman Ed Woodward reacted to the latest figures by accentuating the positive.
“‘Notwithstanding no European football this season, our revenues and EBITDA remain strong and demonstrate the underlying strength of our business model, with commercial revenues up year over year,” he said. ” On the pitch, the team is well positioned to challenge for a top four finish in the Premier League and we look forward to the rest of the season.’
Being Manchester United, new commercial partners are always queueing up. The decline has been offset by a 23% increase in sponsorship revenues to £35.8 million. The club said it expected to hit its target revenues for the whole year of between £385 million and £395 million.
Despite the lack of European midweek football, there is no denying the power of United’s brand as the world record £750 million kit supply deal with Adidas, which takes effect next season, illustrates.
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