Manchester United record net loss of £115.5million in latest financial year

[Crashoutcassius]

Has our debt gone down even a bit since 2005?

This is net debt. A figure journalists like because it is extremely misleading. Doesn't mean debt has gone up, usually means cash has gone down much more than it is a reference to debt

 

[Revan]

Purely from a BA perspective, I wonder if we are an example case for a mismanaged business and waste of assets, being talked about in classrooms etc...

We should be. We essentially have spent more money than any other sporting club in the world (except Barcelona) since Fergie left, and during this time we won one Europa League, one FA Cup and one League Cup. And failed to make UCL in 4 seasons.

 

[Crashoutcassius]

Revenue up 90m. Net debt up entirely from sterling and USD exchange rate and from cash expenses. These stories are such a nonsense.

What is our committed wage bill and what is our revenue expected to be in future years. What is our cash flow expected to be. Don't worry about all this accounting profit nonsense. Don't let the journalists trick you

We aren't in CL this season so wage bill will be radically reduced

 

[Redjazz]

Overall: a pretty poor set of results for 2022.

Revenue up 90m. Not bad.....but 100+m increase comes from matchday. No matches at OT in 2021.
Commercial and Media movements from 2021 both impacted by Covid, but in opposite directions. Sponsorship is up a bit (5.5%) which is a plus.

Costs
Massive increase in 2022. Wages up 20% to 384m. Amortization up to 151m, and other operating expenses up 54% to 118m. The latter increase mainly reflects the renewed costs of hosting football at OT.
All of which produces record operating expenses of close to 700m (693m). And record operating losses of 87m.
For some perspective, consider that in the last 5 years under Fergie, Operating profits were in the 50 to 100m range. At that time, the ugly stuff (finance costs) happened below the operating line. Now ugly spreads both ways.
The cost of players (annual amortization plus wages) for 2022 is 535m or 92% of total revenue.

Cash Profits
Ebitda down 15% to 81m. Ebitd (which reflects the impact of amortization, a key cost for football clubs) is again in negative territory at -70m. Essentially, the club is not currently producing enough real earnings to sustain that level of player investment. A bit of a worry, considering that the 2022 accounts don't carry much, if any, of the recent summer spend.

Gross Debt is UP 40M from 2021 when you allow for the increase in borrowing on the RCF. Cash is up 10m to 121m as at 31/06/2022.

Outlook: the club expects modest increases for both Revenue (600m) and Ebitda (110m) in the current year, which suggests that it doesn't anticipate a significant reduction in wages for 2023.

 

[tomaldinho1]

You get £160m for winning the PL supposedly so let’s just do that. Easy maths.

 

[RedDevil@84]

I will never be able to comprehend how the club was bought by cnuts with no money.

Outright scam by PL.

 

[arnie_ni]

Same way people buy houses… cars…

Except the debt doesn't fall on house or the car after you buy it. It's still your debt.

 

[Skills]

Except the debt doesn't fall on house or the car after you buy it. It's still your debt.

Most buy to let properties are bought on interest only mortgages.

With a small deposit you buy the property, let it out. Pay the mortgage with the rent, and skim the profits. Once you're done, sell it up and also benefit from the appreciation. That's what the glazers have done.

 

[Red Stone]

Call me old-fashioned, but I think any dividends, if they have to be taken, should be taken out of profits only. The feckers are twisting the knife at this point.

 

[arnie_ni]

Most buy to let properties are bought on interest only mortgages.

With a small deposit you buy the property, let it out. Pay the mortgage with the rent, and skim the profits. Once you're done, sell it up and also benefit from the appreciation. That's what the glazers have done.

Aye but if you sell the property before the mortgage is up you have to clear the balance.

 

[Crashoutcassius]

Overall: a pretty poor set of results for 2022.

Revenue up 90m. Not bad.....but 100+m increase comes from matchday. No matches at OT in 2021.
Commercial and Media movements from 2021 both impacted by Covid, but in opposite directions. Sponsorship is up a bit (5.5%) which is a plus.

Costs
Massive increase in 2022. Wages up 20% to 384m. Amortization up to 151m, and other operating expenses up 54% to 118m. The latter increase mainly reflects the renewed costs of hosting football at OT.
All of which produces record operating expenses of close to 700m (693m). And record operating losses of 87m.
For some perspective, consider that in the last 5 years under Fergie, Operating profits were in the 50 to 100m range. At that time, the ugly stuff (finance costs) happened below the operating line. Now ugly spreads both ways.
The cost of players (annual amortization plus wages) for 2022 is 535m or 92% of total revenue.

Cash Profits
Ebitda down 15% to 81m. Ebitd (which reflects the impact of amortization, a key cost for football clubs) is again in negative territory at -70m. Essentially, the club is not currently producing enough real earnings to sustain that level of player investment. A bit of a worry, considering that the 2022 accounts don't carry much, if any, of the recent summer spend.

Gross Debt is UP 40M from 2021 when you allow for the increase in borrowing on the RCF. Cash is up 10m to 121m as at 31/06/2022.

Outlook: the club expects modest increases for both Revenue (600m) and Ebitda (110m) in the current year, which suggests that it doesn't anticipate a significant reduction in wages for 2023.

good post fairplay.

I think the transfer fee amortisation is hard to comment on without seeing it laid out properly. we could be account for all kinds of fees the last few years that roll off this year or next. many of them closely reflect the cash charges but many aren't cash charges eg. we will be amortising Harry Maguire each year but we reportedly paid the 80m up front, so no real cash charge.

cash flow is always going to be king in guessing how much we can spend each year. club had material exceptionals this year and seems to expect a return to normal cash profit levels next year, which makes sense to me despite higher wages. Does anyone know the actual truth of whether no CL affects our wage bill with reduction clauses?

 

[90 + 5min]

Overall: a pretty poor set of results for 2022.

Revenue up 90m. Not bad.....but 100+m increase comes from matchday. No matches at OT in 2021.
Commercial and Media movements from 2021 both impacted by Covid, but in opposite directions. Sponsorship is up a bit (5.5%) which is a plus.

Costs
Massive increase in 2022. Wages up 20% to 384m. Amortization up to 151m, and other operating expenses up 54% to 118m. The latter increase mainly reflects the renewed costs of hosting football at OT.
All of which produces record operating expenses of close to 700m (693m). And record operating losses of 87m.
For some perspective, consider that in the last 5 years under Fergie, Operating profits were in the 50 to 100m range. At that time, the ugly stuff (finance costs) happened below the operating line. Now ugly spreads both ways.
The cost of players (annual amortization plus wages) for 2022 is 535m or 92% of total revenue.

Cash Profits
Ebitda down 15% to 81m. Ebitd (which reflects the impact of amortization, a key cost for football clubs) is again in negative territory at -70m. Essentially, the club is not currently producing enough real earnings to sustain that level of player investment. A bit of a worry, considering that the 2022 accounts don't carry much, if any, of the recent summer spend.

Gross Debt is UP 40M from 2021 when you allow for the increase in borrowing on the RCF. Cash is up 10m to 121m as at 31/06/2022.

Outlook: the club expects modest increases for both Revenue (600m) and Ebitda (110m) in the current year, which suggests that it doesn't anticipate a significant reduction in wages for 2023.

Wages must go down. We are paying absurd money for average players. At least, some of big earners are gone. Tranfers must be done better. We need to stop buying average players for big money.

 

[Redjazz]

good post fairplay.

I think the transfer fee amortisation is hard to comment on without seeing it laid out properly. we could be account for all kinds of fees the last few years that roll off this year or next. many of them closely reflect the cash charges but many aren't cash charges eg. we will be amortising Harry Maguire each year but we reportedly paid the 80m up front, so no real cash charge.

cash flow is always going to be king in guessing how much we can spend each year. club had material exceptionals this year and seems to expect a return to normal cash profit levels next year, which makes sense to me despite higher wages. Does anyone know the actual truth of whether no CL affects our wage bill with reduction clauses?

Amortization fees are real player purchase costs spread out.
Years ago, the club would expense the entire cost in the first year, so in the case of a Maguire, the acquisition cost would be 80m in year 1 as opposed to an amortization charge of 20m each year for 4 years. Whatever approach is taken, the book cost will match up eventually. And neither approach will always match with the actual payment schedules behind the transfers (which is what's captured in the cash flow statement). The difference between amortization costs and acquisition costs (as they appear in the cash flow statement) is about timing rather than amount. 80m will be recorded in the books (eventually) with a matching 80m going through cash flow (eventually).
Yeah, cash flow is important as is EBITDA as an indicator of cash profits. In terms of what we can spend, our cash-in-hand position, how much we owe other clubs for players already bought (130m at 2022YE and this before the 220m summer splurge), how much we owe on the RCF (100m) all factor into the equation. Given the club's preference for lengthy repayment plans (up to 5 years), future cash availability is becoming a more important driver of current spend. That info isn't available in the accounts, cash flow or otherwise.

From what I recall, the no-CL penalty was about 10%. That may have changed. While the club had some salary retirements in the summer, the 220m splurge would, I reckon, take a chunk of any CL reduction.

 

[Barthez]

Hate Glazers with a passion

 

[Eyepopper]

Club loses £115m, at the same time the owners take £33m out for themselves.

Yeah, that really shouldn't be allowed.

 

[Tom Cato]

Love the deferred dividends. Its a loveletter to the club from our caring owners, reaffirming their commitment to bending the club over and making it take it up the Old Trafford brick tunnel.

 

[GinobiliTheGOAT]

Time to sell some assets

 

[bringbackbebe]

Let's get the levers going. Mortgaging Harry Maguire for a pack of peanuts will be a good start.

 

[Crashoutcassius]

Club loses £115m, at the same time the owners take £33m out for themselves.

Yeah, that really shouldn't be allowed.

Did the club actually lose 115m though

 

[Revan]

Club loses £115m, at the same time the owners take £33m out for themselves.

Yeah, that really shouldn't be allowed.

It is terrible. When a business losses money, rewarding the shareholders with dividends is bizarre.

 

[TheReligion]

It is terrible. When a business losses money, rewarding the shareholders with dividends is bizarre.

It’s like the Caf so we are told. Makes no money.

Secretly though adverts appear and the mods are being rewarded with big payouts.

@moses returned to collect his and even @Grinner popped up to cash out the other day.

Caf Fat Cats

 

[moses]

It’s like the Caf so we are told. Makes no money.

Secretly though adverts appear and the mods are being rewarded with big payouts.

@moses returned to collect his and even @Grinner popped up to cash out the other day.

Caf Fat Cats

If I was on Grinner level caf money I wouldn't be such a miserable fecker.

 

[Blood Mage]

The parasites have got to go. Keep the protests going lads, regardless of how much we improve on the pitch.

 

[TheReligion]

If I was on Grinner level caf money I wouldn't be such a miserable fecker.

Who is he equivalent to? Ronaldo levels?

 

[moses]

Who is he equivalent to? Ronaldo levels?

De Gea,, everyone knows Wibble is the staff Ronaldo

 

[VidaRed]

Can't we approach one of them city's dodgy sponsors.

 

[DevilRed]

Revenue's up and thats the overriding key number for any analyst.

If you look at the figures closely, which the press won't, our revenues are finally starting to normalise and beginning to reach the all time highs of 2019 (627m). Its now comparable to 2018 and 2017.

Mathday revenue is back. Commercial revenues are recovering. Broadcasting revenue is down but that could be due to timing of payments or lingering reductions from covid period/poorest league finish in decades.

Although adjusted EBITDA is on a downward trend which is worrying, but that could be chalked down to the poor performance of last season. Management is forecasting 100m -110m next season, which would be still lagging behind precovid numbers of 170m+, but an improvement and slow climb back to normalcy. Also guidance of 580m - 600m revenue which is promising.

A testament to our brand strength and loyal following globally. But that will not last forever. We have to get things right soon.

 

[Counterfactual]

Call me old-fashioned, but I think any dividends, if they have to be taken, should be taken out of profits only. The feckers are twisting the knife at this point.

Dividends can only be paid from profits. I'd like to know how the Glazers managed to take dividends in a loss-making year.

 

[Escobar]

Only an asshole takes out so many dividends in a year like covid

 

[saffron trishula]

Swissramble is a great handle to get into the nitty gritty of it all

 

[Redjazz]

Did the club actually lose 115m though

150m loss before tax actually. You get a tax credit when you make a big loss.

Yeah. You don't lose 115m in cash. Most of the finance costs for 2022 aren't cash related, ditto with depreciation, impairments, profits from selling player, etc.
The big killer operationally was poor salary control during Covid (100m increase since 2020), against a backdrop of flat revenues. That hits cash profits directly.

From a cash flow perspective, the club generated about 280m from the business (basically cash profits) over the last 3 years after it paid regular cash expenses like salaries etc. This surplus is used to cover dividends, interest payments, capex, player net spend. Anything left over is added to the bank account.
The club doled out over 560m on those things in the same period (360m on player net spend, 65m on dividends, 60m on interest, 35m on capex, and the rest on smaller stuff).
The shortfall of 280+m was covered by using the company credit card (100m) and blundering the bank account (down from 310m in 2019 to 120m as at 30/06/2022). So, we have essentially cleared out the bank account to make ends meet during the covid period.
Part of it is down to covid, but the main culprits are poor salary control and heavy player expenditure.
Now, we still owe other clubs 130m for players bought prior to the 220m summer spend, so things are going to be pretty tight in the short term. And there is no nest egg to call upon should thing go belly up.

So yeah, cash flow tells you pretty much the same story: we've been spending beyond our means, we need some cost control, and we really, really, really need the TH revolution to get the club back winning and contending.

 

[Leftback99]

150m loss before tax actually. You get a tax credit when you make a big loss.

Yeah. You don't lose 115m in cash. Most of the finance costs for 2022 aren't cash related, ditto with depreciation, impairments, profits from selling player, etc.
The big killer operationally was poor salary control during Covid (100m increase since 2020), against a backdrop of flat revenues. That hits cash profits directly.

From a cash flow perspective, the club generated about 280m from the business (basically cash profits) over the last 3 years after it paid regular cash expenses like salaries etc. This surplus is used to cover dividends, interest payments, capex, player net spend. Anything left over is added to the bank account.
The club doled out over 560m on those things in the same period (360m on player net spend, 65m on dividends, 60m on interest, 35m on capex, and the rest on smaller stuff).
The shortfall of 280+m was covered by using the company credit card (100m) and blundering the bank account (down from 310m in 2019 to 120m as at 30/06/2022). So, we have essentially cleared out the bank account to make ends meet during the covid period.
Part of it is down to covid, but the main culprits are poor salary control and heavy player expenditure.
Now, we still owe other clubs 130m for players bought prior to the 220m summer spend, so things are going to be pretty tight in the short term. And there is no nest egg to call upon should thing go belly up.

So yeah, cash flow tells you pretty much the same story: we've been spending beyond our means, we need some cost control, and we really, really, really need the TH revolution to get the club back winning and contending.

It does seem like we've gambled on an unlikely return to the CL next season. Doubtful there will be much to spend next summer either way but worrying what postion we'll be in if we don't make CL, we'll lose a chuck of the Adidas deal for one.

 

[Dancal]

It’s not your debt, it’s their debt.

It's man utd debt. It was leveraged on the club

 

[arnie_ni]

Club loses £115m, at the same time the owners take £33m out for themselves.

Yeah, that really shouldn't be allowed.

While I agree it shouldn't be allowed, they're only legal if there is reserves to take, so they're dipping in to profits built up over the years.

It's just a horrible way to run a football club.

 

[cyberman]

It does seem like we've gambled on an unlikely return to the CL next season. Doubtful there will be much to spend next summer either way but worrying what postion we'll be in if we don't make CL, we'll lose a chuck of the Adidas deal for one.

Why is it unlikely?

 

[ROFLUTION]

150m loss before tax actually. You get a tax credit when you make a big loss.

Yeah. You don't lose 115m in cash. Most of the finance costs for 2022 aren't cash related, ditto with depreciation, impairments, profits from selling player, etc.
The big killer operationally was poor salary control during Covid (100m increase since 2020), against a backdrop of flat revenues. That hits cash profits directly.

From a cash flow perspective, the club generated about 280m from the business (basically cash profits) over the last 3 years after it paid regular cash expenses like salaries etc. This surplus is used to cover dividends, interest payments, capex, player net spend. Anything left over is added to the bank account.
The club doled out over 560m on those things in the same period (360m on player net spend, 65m on dividends, 60m on interest, 35m on capex, and the rest on smaller stuff).
The shortfall of 280+m was covered by using the company credit card (100m) and blundering the bank account (down from 310m in 2019 to 120m as at 30/06/2022). So, we have essentially cleared out the bank account to make ends meet during the covid period.
Part of it is down to covid, but the main culprits are poor salary control and heavy player expenditure.
Now, we still owe other clubs 130m for players bought prior to the 220m summer spend, so things are going to be pretty tight in the short term. And there is no nest egg to call upon should thing go belly up.

So yeah, cash flow tells you pretty much the same story: we've been spending beyond our means, we need some cost control, and we really, really, really need the TH revolution to get the club back winning and contending.

Considering this, then the Casemiro deal with very high wages and a big fee seems sligtly idiotic considering he’ll have almost no resale value.

Only way he brings us money in, is if he is the deciding factor between champions league and no champions league

is this because:
A) the overall budget-men don’t talk with Murtough and he is just given X amount to spend?
B) A simple way of pleasing fans in revolt?
Or
C) A way to look more attractive to potential buyers?

or all of the above?

 

[Leftback99]

Why is it unlikely?

5 teams are more likely.

 

[Sunny Jim]

It does seem like we've gambled on an unlikely return to the CL next season. Doubtful there will be much to spend next summer either way but worrying what postion we'll be in if we don't make CL, we'll lose a chuck of the Adidas deal for one.

I think you are spot on. And i think it was the right move. I’m dreading the future if dont make the CL

 

[Sunny Jim]

5 teams are more likely.

City for sure. Arsenal, Chelsea, Spurs are our level. Pool seems to have some sand in the gears. I think we have a good chance to get 4th

 

[dinostar77]

Be interesting to see if the glazers do sell up anytime soon. I suspect the delays and opposition to the ultimate golden goose of a european superleague may test their resolve.