Manchester United’s failure to qualify for the Champions League last season has had a sizeable impact on their finances, with the club announcing an 8.8% drop in revenues for the year ended May, 2015.
The major reason for this is their absence from Europe’s most elite club competition, after finishing 7th under David Moyes in the 2013/14 season. The Red Devils are back in the big-time this year, but lost their first group game against PSV Eindhoven on Tuesday. Manager Louis van Gaal must make sure his side at least get to the knockout stages, while also ensuring that they finish in the top 4 in the Premier League.
As stated in this report by Sky Sports, the club’s Matchday revenues fell by 16% and broadcasting income came down by 20.7%. The total revenue that they recorded for this accounting year was £395.2 million, down from £433.2 million for the same period last year.
The club’s sponsorship income though, increased by 14.1% and Executive Vice-Chairman spoke of a bright and exciting future while announcing the results.
“As we look to the new season, we are enthusiastic about our strong position, both on and off the pitch”, he said.
“In recent weeks we have further strengthened our squad with an exciting mix of experience and youth, qualified for the group stage of the Uefa Champions League, and seen an impressive launch of our partnership with adidas. Our record revenue and EBITDA guidance for 2016 reflects the underlying strength of our business and our confidence in its continued growth.”
The Glazer-family also announced that they would raising a further $400 million on the New York Exchange, issuing a total of 24 million new shares in the primary market. It is a possibility that the club’s revenues for the current year exceed £500 million, and this would make them the first English club ever to break the half-a-billion barrier.
Caution to the wind
Last year, UEFA distributed a total of around €1.34 billion to participants in the Champions League and the Europe League combined, according to this report on their official website. The winners of the former pocketed a whopping €37.4 million. The participants in the group stages took home at least €8.6 million each, with a further €1 million for a win and €500,000 for a draw. Qualification to the last 16 added €3.5 million to each kitty.
United have spent big in the last two summers in their attempt to re-establish themselves as a force in England and Europe. While their finances are still very strong, they need to make sure that the level of performance on the pitch sustains and then improves.