By Paul Nicholson
May 15 – Manchester United’s third quarter financial results announcement was all about looking to the future as the club looks forward to the financial importance of a return to Champions League football and an expectation that it will be competitive in all competitions.
Management of the estimated £50 million loss of revenue from being outside the Champions League has been key to the Man Utd financial year to date. While the company’s total revenue is down 14.1% to £298.4 million for the nine months to March 31, the club highlights the bright spot of a rise in commercial revenues of £47.8 million up 11.7% for the quarter (up 4.1% to £151 million for the nine months).
While sponsorship income was up, merchandising was down slightly by £800,000 and content revenue (mainly from mobile) dropped £1 million.
The biggest hit on income was from the inevitable drop in broadcast revenue, down 39% (£13.9 million) for the quarter to £21.7 million. The club blames this on fewer live Premier League matches (it missed out on facility fees) and no Champions League.
The positive, looking forward, is that Champions League revenue for the 2016-18 cycle for clubs will rise to €1.257 billion, a 25% increase. The new £5.14 billion TV deal with BT and Sky kicks in for the 2017-19 seasons – this compares to £3 billion for the 2014-16 seasons.
Matchday revenue for the third quarter was down £11.6 million to £25.5 million – a result of two Premier League home games in the quarter and, of course, no Champions league football.
Ed Woodward, Executive Vice Chairman, said: “We remain confident about the future of our business. Our commercial revenues were up year over year and we are raising EBITDA guidance for fiscal year 2015 from £90m-£95m to £103m-£110m.”
The loss of £50 million of Champions League revenue is offset by increased sponsorship and a reduction of the club’s wage bill by 6% (£3.2 million).
In a note to the accounts, gross debt had increased to £395.4 million (12%) “primarily because of movements in USD/GBP exchange rate from 1.6662 at 31 March 2014 to 1.4861 at 31 March 2015.”
Contact the writer of this story at moc.l1734935699labto1734935699ofdlr1734935699owedi1734935699sni@n1734935699osloh1734935699cin.l1734935699uap1734935699