Lack of Champions League football is hurting badly for Manchester United, as the club’s revenue dropped by almost 10% in the first quarter of this financial year.
United executive vice-chairman Ed Woodward confirmed the fall in revenue was mainly due to the absence from Europe. He said as quoted by The Guardian:
“While we recognise that the 2014-15 fiscal year financial results will reflect our absence from the Champions League, we signed the largest kit sponsorship deal in the history of sport in the first quarter and, with that concluded, we are excited to focus our efforts on the meaningful growth opportunities in sponsorship, digital media and retail and merchandising.”
United’s revenue for the for the three months ending September 30 was £88.7million, which is £9.8million short of what they achieved same period a year ago.
The fall in income could have been even greater had United not compensated with increase in sponsorship money and a lower wage bill.
“United’s spending on employee benefits for the quarter fell by 3.5m, or 6.6%, to 49.4m, “primarily to lower player wages”, said the club in a statement.”
Furthermore, United sold several high earning players in the summer including Nemanja Vidic, Rio Ferdinand, Patrice Evra, Ryan Giggs, Danny Welbeck, Bebé, Javier Hernández, Tom Cleverley and Shinji Kagawa; hence a significant drop of wage bill.
Louis van Gaal has made several big signings this summer, including record breaking signing of Angel di Maria, but overall he has kept the wage bill lower than his predecessor David Moyes.