Manchester United’s financial results explained: Back to profit, but money owed close to £1bn
Manchester United have recorded a net profit for the first time since the COVID-19 pandemic hit three years ago — but money owed is close to £1billion ($1.2bn).
The club’s quarterly accounts for the three months ending December 2022, released on Thursday, reveal they posted a £6.3million ($7.8m) net profit, even though total revenue fell when compared to the same period a year earlier.
They also show that United owe £969.9million ($1.2bn) through a mixture of gross debt, their revolving credit facility and outstanding transfer payments.
These figures come at a time when United’s owners, the US-based Glazer family, are exploring a possible sale, with the primary objective of their “strategic” review being how to meet the club’s long-term capital investment needs.
With success returning on the pitch in the form of a Carabao Cup final triumph in February — the club’s first trophy since 2017 — plus plenty happening off the field, The Athletic analysed the latest set of accounts…
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What are the standout numbers from these latest figures?
It is hard to get past the fact United have recorded their first net profit since the COVID-19 pandemic forced football into lockdown in early 2020 and then to play games without crowds for more than a year despite total revenue decreasing due to several mitigating factors.
Commercial revenue was the outlier, growing £14.3million to £78.7m in the three-month period which ended last December. That is a 22 per cent increase on the same figure for 2021, a rise that ultimately stems from United’s training-kit agreement with Tezos, along with a one-off sponsorship credit.
United’s failure to qualify for this season’s Champions League meant their broadcast revenue dropped from £86.4million to £58.7m in the second-tier Europa League. Had they qualified for Europe’s elite club competition, the expectation was that overall revenues would be at record levels and among the highest in world football.
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<!– END OF BODY CODE –>As a result of playing two home games fewer in this most recent financial quarter, due to the club season being put on hold for six weeks in November and December to allow for the playing of the World Cup in Qatar, United’s matchday revenues also fell. In December 2021, they totalled £34.6million, but in these latest figures, the number is £29.9m — a drop of £4.7m.
Operating expenses for the quarter fell £12.1million to £167.6m, while the wage bill decreased £20.4m to £77.3m. This drop of 21 per cent is a result of both squad turnover and the fact the men’s first team are not playing in the Champions League.
Cash reserves have shrunk to £31million — having been at £87.4m at the end of December 2021 — as a result of the significant investment in the squad last summer following the appointment of new manager Erik ten Hag. There is not thought to be an issue with short-term liquidity as cash levels are expected to increase over the next two quarters, with sponsorship money and season-ticket income coming into the club.
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<!– END OF BODY CODE –>United spent £61million in the three months ending December 2022, with almost of that (£29.9m) going on instalments of transfer fees.
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