How much profit do we actually make?

ExecutionerWasp001

Full Member
Joined
Mar 3, 2019
Messages
277
We are turning over £550 Mill. We pay roughly 50% in wages. I presume this is for all staff rather than just playing staff. We have the debt repayment, dividends & taxes. The running of MUTV & the yearly policing costs will also be fairly substantial.
 

Kostur

海尔的老板
Joined
Mar 8, 2012
Messages
28,599
Location
Poland, Kraków
We need some in-depth analysis of our finances here and I know that there's only one economics expert here who can do it for us due to his massive interest in our finances for years now and his groundbreaking cutting edge proprietary economics branch.

@GlastonSpur
 

Revan

Assumptionman
Joined
Dec 19, 2011
Messages
38,727
Location
CA
Net loss of 50m USD in 2018, a profit of 53m USD in 2017.
 

Leftback99

Full Member
Joined
Jan 11, 2015
Messages
5,236
It should be announced this month i think. Last year £26m before tax. This year wages will have gone up, a £20m pay off for Mourinho will be shown, probably offset by a profit on player sales for Fellaini and Lukaku. The profit will be lower than people think.

 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
EBITDA down 11% is a bad year.

Revenue didn’t increase, which answers why we offloaded players and didn’t replace them. Unless revenue increases, we likely won’t invest next summer either. We will cut expenses to keep profits up.

Profits (Losses) factor into FFP. Profits are expected by shareholders as well. I imagine Woodward is under the gun to have a better year this year.
 

Jippy

Sleeps with tramps, bangs jacuzzis, dirty shoes
Staff
Joined
Nov 19, 2009
Messages
45,265
Location
Jet fuel doesn't melt steel beams
EBITDA down 11% is a bad year.

Revenue didn’t increase, which answers why we offloaded players and didn’t replace them. Unless revenue increases, we likely won’t invest next summer either. We will cut expenses to keep profits up.

Profits (Losses) factor into FFP. Profits are expected by shareholders as well. I imagine Woodward is under the gun to have a better year this year.
Presumably that tax writedown won't be repeated though at least.
 

Majima

Full Member
Joined
Jan 10, 2016
Messages
2,660
Location
Kami's Lookout
EBITDA down 11% is a bad year.

Revenue didn’t increase, which answers why we offloaded players and didn’t replace them. Unless revenue increases, we likely won’t invest next summer either. We will cut expenses to keep profits up.

Profits (Losses) factor into FFP. Profits are expected by shareholders as well. I imagine Woodward is under the gun to have a better year this year.
Pogba & De Gea already have one foot out of the door for next summer.

Woodward pulls out the youth card again. Cheap replacements. Easy game.
 

Rood

nostradamus like gloater
Scout
Joined
Jun 21, 2008
Messages
17,694
Location
@United_Hour
EBITDA down 11% is a bad year.

Revenue didn’t increase, which answers why we offloaded players and didn’t replace them. Unless revenue increases, we likely won’t invest next summer either. We will cut expenses to keep profits up.

Profits (Losses) factor into FFP. Profits are expected by shareholders as well. I imagine Woodward is under the gun to have a better year this year.
Those numbers are from June 2018 - they will not be the reason for any lack of investment this summer (I suppose they could in theory be a reason Jose wasnt backed last summer)

The best way to increase profits is to qualify for the CL rather than to cut costs

I predict significant investment in the squad over the next 2 windows - just have a look at how much cash the club has in the bank, around £200m at last count
 

nokillingmoths

Full Member
Joined
Sep 28, 2013
Messages
5,094
Pogba & De Gea already have one foot out of the door for next summer.

Woodward pulls out the youth card again. Cheap replacements. Easy game.
Ironically of all our young players henderson is the most qualified to take a place in the side, especially if he backs up last seasons great showing. Sadly people will moan about another youth player.
 

Majima

Full Member
Joined
Jan 10, 2016
Messages
2,660
Location
Kami's Lookout
Ironically of all our young players henderson is the most qualified to take a place in the side, especially if he backs up last seasons great showing. Sadly people will moan about another youth player.
Henderson is nailed on to take De Gea position in the summer. It's got Woodward written all over it. Hopefully he can step up this year.

It's not moaning about the youth in a vacuum. That's a shallow way of analysing it. It's systematically replacing with youth, even if it isn't in the teams interests as a way to increase profits that i definitely am against.
 

Skills

Snitch
Joined
Jan 17, 2012
Messages
30,145
EBITDA down 11% is a bad year.

Revenue didn’t increase, which answers why we offloaded players and didn’t replace them. Unless revenue increases, we likely won’t invest next summer either. We will cut expenses to keep profits up.

Profits (Losses) factor into FFP. Profits are expected by shareholders as well. I imagine Woodward is under the gun to have a better year this year.
We'll also lose 20% from the Adidas deal once we miss out on the CL again
 

Crashoutcassius

Full Member
Joined
Oct 10, 2013
Messages
6,925
Location
playa del carmen
Pogba & De Gea already have one foot out of the door for next summer.

Woodward pulls out the youth card again. Cheap replacements. Easy game.
It is ebitda which should exclude player amortization so above is irrelevant. It is simply an increase in wage bill which wasnt offset by a large enough revenue increase
 

Crashoutcassius

Full Member
Joined
Oct 10, 2013
Messages
6,925
Location
playa del carmen
If our EBITDA continues to show a declining trend, perhaps it would encourage the Glazers to sell?
So if they keep agreeing to increase wage bill ? Our wage bill should shrink this year, if we cut half of Alexis wages, lukaku, smalling, Herrera, no CL wage cut for everyone. Would expect ebitda to rebound slightly even if top line is hit
 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
Those numbers are from June 2018 - they will not be the reason for any lack of investment this summer (I suppose they could in theory be a reason Jose wasnt backed last summer)

The best way to increase profits is to qualify for the CL rather than to cut costs

I predict significant investment in the squad over the next 2 windows - just have a look at how much cash the club has in the bank, around £200m at last count
If revenue hasn’t improved in the past 12 months then those numbers would explain the modest net investment over this summer. Quick, short Man Utd stock before the next earnings report :)

Qualifying for the CL is a high risk, high reward investment. I’m not sure expected return favored that bet given the state of the club last window. Hopefully next summer it looks a better risk.
 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
What the feck is that tax charge about.
Maybe with the decrease in the US corporate tax rate United patriated untaxed earnings into the US.
 

Crashoutcassius

Full Member
Joined
Oct 10, 2013
Messages
6,925
Location
playa del carmen
Man that swiss ramble analysis is just amazing. Can't believe he does all that for free.

Does anyone know how stable our interest payments are post refinancing ? Can they shoot up in a different environment or are they vanilla coupons?

Would love to see a breakdown of player amortization rolling off in coming years. We must be close to pogba rolling off although we have obviously added 130m this summer. Would be a cool thing to see.

Cash wise we probably could spend 120m net every year after interest and tax for the foresee able... assuming those interest payments are stable
 

Rood

nostradamus like gloater
Scout
Joined
Jun 21, 2008
Messages
17,694
Location
@United_Hour
If revenue hasn’t improved in the past 12 months then those numbers would explain the modest net investment over this summer. Quick, short Man Utd stock before the next earnings report :)

Qualifying for the CL is a high risk, high reward investment. I’m not sure expected return favored that bet given the state of the club last window. Hopefully next summer it looks a better risk.
Not really - the big risk to our club is NOT qualifying. 1 year we can handle after that there is a major hit to commercial revenue

and BTW There are quarterlys released since then which are freely available to check revenue and profit figures

And like I said, just look how much cash is sat in the bank - transfer fees are not an issue for us, the wage bill was a problem though and had to be cut to make way for new players. Several have now left which frees up significant space for incomings
 

Rood

nostradamus like gloater
Scout
Joined
Jun 21, 2008
Messages
17,694
Location
@United_Hour
Man that swiss ramble analysis is just amazing. Can't believe he does all that for free.

Does anyone know how stable our interest payments are post refinancing ? Can they shoot up in a different environment or are they vanilla coupons?

Would love to see a breakdown of player amortization rolling off in coming years. We must be close to pogba rolling off although we have obviously added 130m this summer. Would be a cool thing to see.

Cash wise we probably could spend 120m net every year after interest and tax for the foresee able... assuming those interest payments are stable
the link to our financial statements has already been posted in this thread - its all there.
 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
United had a large deferred tax asset going into the period. Tax rate reduced so the asset was worth less... not a cash write down just an accounting loss
Thanks for clarifying. Makes sense. I was too lazy to pull down the reports.
 

Kijima

New Member
Newbie
Joined
Dec 28, 2017
Messages
8
Wrote this in another thread but worth mentioning again that whilst we have cash in bank we also have owed an absolute shedload to other clubs over last couple transfer windows:

Disclaimer that not an accountant so might be schooled here, but looks like it's because we're paying for the previous windows. We took a shot at it in terms of massive investment and missed. We're rich enough in that we can recover but think it's questionable that we can just write it off and instantly go again.

Last Annual accounts we had £242m in the bank, but owed a lot to other clubs in trade payables (basically future installments)
June 2018
Trade payables include transfer fees and other associated costs in relation to the acquisition of registrations of £258,316,000 (2017: £179,133,000) of which £102,067,000 (2017: £82,866,000) is due after more than one year. Of the amount due after more than one year, £65,495,000 (2017: £76,821,000) is expected to be paid between 1 and 2 years, and the balance of £36,572,000 (2017: £6,045,000) is expected to be paid between 2 and 5 years.
Net trade receivables include transfer fees receivable from other football clubs of £29,214,000 (2017: £46,343,000) of which £4,724,000 (2017: £15,399,000) is receivable after more than one year.
(Page f-40 and f-43 https://ir.manutd.com/~/media/Files/M/Manutd-IR/documents/2018-mu-plc-form-20-f.pdf)

March 2019
We had £193.855m in bank, but
Trade payables include transfer fees and other associated costs in relation to the acquisition of registrations of £122,281,000 (30 June 2018: £258,316,000; 31 March 2018: £194,924,000) of which £43,698,000 (30 June 2018: £102,067,000; 31 March 2018: £74,600,000) is due after more than one year. Of the amount due after more than one year, £32,767,000 (30 June 2018: £65,495,000; 31 March 2018: £41,117,000) is expected to be paid between 1 and 2 years, and the balance of £10,931,000 (30 June 2018: £36,572,000; 31 March 2018: £33,483,000) is expected to be paid between 2 and 5 years.
Net trade receivables include transfer fees receivable from other football clubs of £22,802,000 (30 June 2018: £29,214,000; 31 March 2018: £31,359,000) of which £9,964,000 (30 June 2018: £4,724,000; 31 March 2018: £5,618,000) is receivable after more than one year.
Page 32 and 34
https://ir.manutd.com/~/media/Files/M/Manutd-IR/Governance Document/manchester-united-plc-3q19-interim-report.pdf

So basically in the 9 months following June 2018 where at the time they had £242m in cash, the club would have had £156.249m transfer debt due within one year owed to other football clubs, with only £24.490m owed to us from other clubs.
The position as per the last quaterlys (Mar 2019) was that we've paid off a good chunk of that but still with £193.855m in cash, we owe £78.583m within one year, with only £12.838m coming back this year.

And as said the above is future staged installments, as opposed to upfront payments and it's to be differentiated from amortisation (so actual cash leaving as opposed to asset value written off).

Per Swissramble's recent thread on twitter:
https://twitter.com/SwissRamble
(I can't post links as a newbie but click on his link dated 6th august, well worth a look as he breaks down comparisons of spending over last 3,5,10 years between the clubs, and lots of pretty graphs comparing this "transfer debt" to other clubs,

As you can hopefully see, other clubs are following suit in terms of going stage payments and so its normal practice to a degree now but I'd imagine it's still a concern that they wanted to arrest,

£34m gross transfer debt in Jun 2013 rising to £258m gross (229m net) in Jun 2018 is pretty alarming, an awful lot more than our competitors (Man City is next gross highest at £141m,but they have £80m receiveable so net transfer debt £61m) and and likely to impair us to some degree when the outlay's not exactly provided the expected return on investment. As said, Swissramble's link shows it clearer.
 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
Not really - the big risk to our club is NOT qualifying. 1 year we can handle after that there is a major hit to commercial revenue

and BTW There are quarterlys released since then which are freely available to check revenue and profit figures

And like I said, just look how much cash is sat in the bank - transfer fees are not an issue for us, the wage bill was a problem though and had to be cut to make way for new players. Several have now left which frees up significant space for incomings
I suppose it depends on your perspective. This past summer it looked as though three CL slots were already spoken for. That left us, Chelsea, and Arsenal fighting for one slot. Our end of season wasn’t strong, and summer wage cutting was needed. Substantial investment would be needed. All that might have made a CL bet last window too risky. Maybe hoping we can win Europa or slot into 4th was a better bet.

I’m not saying I don’t advocate the gamble, but finance types with their necks on the line might not like those odds. Next summer if we don't have CL I’m confident Woodward can buy us another season or two and make the gamble with more data.
 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
Would be interested to know where we got such a huge dta. It was nearly 130m at start of year. Maybe losses back when our interest charges were 90m a year...
Might well be. The change to US corporate tax rates was telegraphed years in advance. That we couldn’t fully capitalize on it suggests it was a huge amount of deferral.
 

RedRonaldo

Full Member
Joined
Aug 17, 2003
Messages
10,497
People expect us to spent around 200m in the Summer though, and laugh at the media quote figure of 100m.
Turns out our net spent is less than 70m.
 
Last edited:

simmee

Full Member
Joined
Dec 19, 2012
Messages
617
If our EBITDA continues to show a declining trend, perhaps it would encourage the Glazers to sell?
If they want a better valuation for the business they would want to be able to show growth in EBITDA. If anything how we've operated this summer might show they are looking to sell with getting players on high wages of our books. Or they might just be adjusting for missing out on CL revenue och the Adidas deal that is supposed to be lowered by quite a lot if I remember correctly.
 

Rood

nostradamus like gloater
Scout
Joined
Jun 21, 2008
Messages
17,694
Location
@United_Hour
I suppose it depends on your perspective. This past summer it looked as though three CL slots were already spoken for. That left us, Chelsea, and Arsenal fighting for one slot. Our end of season wasn’t strong, and summer wage cutting was needed. Substantial investment would be needed. All that might have made a CL bet last window too risky. Maybe hoping we can win Europa or slot into 4th was a better bet.

I’m not saying I don’t advocate the gamble, but finance types with their necks on the line might not like those odds. Next summer if we don't have CL I’m confident Woodward can buy us another season or two and make the gamble with more data.
On a long term perspective, for the owners/shareholders to keep/increase the value of the club we have to get back to being a regular CL club - the share price is low at the moment due to being out of the competition.

As I said before, now that the wage bill has been trimmed, I expect big spending over the next 2 windows.
 

devlinadl

New Member
Newbie
Joined
Dec 24, 2018
Messages
89
The figures for 18-19 should be much better, due to the CL run. Of course, they will drop back down again in 19-20 with EL football.
 

Amerifan

Full Member
Joined
Aug 8, 2019
Messages
608
On a long term perspective, for the owners/shareholders to keep/increase the value of the club we have to get back to being a regular CL club - the share price is low at the moment due to being out of the competition.

As I said before, now that the wage bill has been trimmed, I expect big spending over the next 2 windows.
I certainly hope so. I think Ole and the squad will earn the backing.
 

HowieC

New Member
Newbie
Joined
Sep 4, 2019
Messages
84
Look at United's financials for the first time, I'm feeling pangs of worry. While our cash position is still strong, the business is not as profitable as I imagined it to be.

The squandering of millions of pounds may be more detrimental to us long-term than we perceived.
 

pascell

Full Member
Joined
Aug 3, 2012
Messages
6,804
Location
Sir Alex Ferguson Stand
Can't remember who published it on twitter but the only owners of a PL club to take dividends out of their clubs were the Glazers, they took £22m out as well.