Report: United's revenue down by 12%

JinnerJamie

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https://www.bbc.co.uk/news/business-51628514

Manchester United's revenue fell in the six months to December, largely because of the club's absence from this season's Champions League.

Broadcasting revenue fell by 33.4%

Commercial revenue up by 6.5%

Matchday revenue remained largely the same.

For 2020, the club expects its total revenues to be between £560m and £580m.

Ed Woodward, the team's executive vice-chairman, said the team had made "progress on our squad rebuild".

The club's total revenue for the six-month period was £303.8m. The drop in broadcasting figures was not a surprise, given the club's absence from the Champions League.

However, Mr Woodward hopes that will be put right next season, adding: "We are pushing for a strong finish in the Premier League, the Europa League and the FA Cup as we enter the final third of the season."
 
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Skills

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Will fall even further next season due to not getting CL for 2 consecutive seasons triggering a penalty in the Adidas deal.

I'm sure the OT faithful will be happy to help the club back their beloved manager with their own back pocket to make up for it though. Season tickets have been frozen for long enough now.
 

Aarron Swift

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I never know how to take United financial news.

On one hand, always want your club to be successful in every possible way on & off the pitch so you want to see positive reports. However, its abundantly clear the commercial side is what keeps Woodward in and job and prevents the Glazers from selling the club.

Not that it affects my life at all as its not my bank account but I'd really like that United wage bill to drop. High earning players who are either flops or don't want to be at the club such as Sanchez + Pogba and average players Matic, Jones, Lingard, Rojo earning wages far above their ability.
 

JinnerJamie

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Will fall even further next season due to not getting CL for 2 consecutive seasons triggering a penalty in the Adidas deal.

I'm sure the OT faithful will be happy to help the club back their beloved manager with their own back pocket to make up for it though. Season tickets have been frozen for long enough now.
It maybe the only trigger in get the Glazer's to sit up and take notice, will they sell? I doubt it... but Woodward must be flying closer to the sun with every passing year.
 

Infra-red

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I never know how to take United financial news.

On one hand, always want your club to be successful in every possible way on & off the pitch so you want to see positive reports. However, its abundantly clear the commercial side is what keeps Woodward in and job and prevents the Glazers from selling the club.

Not that it affects my life at all as its not my bank account but I'd really like that United wage bill to drop. High earning players who are either flops or don't want to be at the club such as Sanchez + Pogba and average players Matic, Jones, Lingard, Rojo earning wages far above their ability.
The wage bill is down 9% vs last year, but that is largely because of clauses in the players' contracts that reduce their salaries in years where we have no CL football.
 

Skills

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It maybe the only trigger in get the Glazer's to sit up and take notice, will they sell? I doubt it... but Woodward must be flying closer to the sun with every passing year.
Well if I was a shareholder (one of the other 20% or so that own the club apart from the glazers), I'd want the club the club to slow down the spending. We're spending among the top 1-2 clubs in the country, and performing like the 5-6th best. We need to pull the spending back into reflect our current status in the game.
 

ivaldo

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About par with expectations.
 

Paxi

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Heads will roll if we don't get CL football again.
 

Jonno

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£34m profit though, which is equivalent to £136m profit per year. Pretty impressive despite not playing regularly in the biggest paying competition in world football.
 

cyberman

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Well if I was a shareholder (one of the other 20% or so that own the club apart from the glazers), I'd want the club the club to slow down the spending. We're spending among the top 1-2 clubs in the country, and performing like the 5-6th best. We need to pull the spending back into reflect our current status in the game.
Why? We need CL and we need to rebuild the squad to get that.
We didnt lose 12 percent due to overspending, we lost it due to not finishing top 4.
We are still making hefty profits.
 

amolbhatia50k

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Change the head of footballing operations and manager of the first team.
 

Skills

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Why? We need CL and we need to rebuild the squad to get that.
We didnt lose 12 percent due to overspending, we lost it due to not finishing top 4.
We are still making hefty profits.
We don't need to spend the amount we do, to do that though. We're a 5-6th level club with the most expensive CB in the world, most expensive midfielder in the league, the highest paid GK in the world and stacked with other very expensive players.

Our return of investment is awful.
 

Tom Cato

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https://www.bbc.co.uk/news/business-51628514

Manchester United's revenue fell in the six months to December, largely because of the club's absence from this season's Champions League.

Broadcasting revenue fell by 33.4%

Commercial revenue up by 6.5%

Matchday revenue remained largely the same.

For 2020, the club expects its total revenues to be between £560m and £580m.

Ed Woodward, the team's executive vice-chairman, said the team had made "progress on our squad rebuild".
All of this was reported by the club back in 2019. Its in tune with the budget for the fiscal year and not a concern for the immediate time being. The club knew all of this essentially before last season ended.
 

jackal&hyde

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Well if I was a shareholder (one of the other 20% or so that own the club apart from the glazers), I'd want the club the club to slow down the spending. We're spending among the top 1-2 clubs in the country, and performing like the 5-6th best. We need to pull the spending back into reflect our current status in the game.
This doesn't actually make sense. The position we are in has been due to poor spending and the relative quality of the squad at the present time. If you do not spend, you are certain to remain at the current level or more likely to drop further; that will probably lead to less revenue with commercial. The difference has to be on better recruitment rather then a drop in net spending. We are doing that imo.
 

Hal9000

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One more season out the CL and we lose a chunk of the Adidas money right?
 

cyberman

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We don't need to spend the amount we do, to do that though. We're a 5-6th level club with the most expensive CB in the world, most expensive midfielder in the league, the highest paid GK in the world and stacked with other very expensive players.

Our return of investment is awful.
Just spend it better. It doesnt mean we have to cut down, just be smarter with it
 

Pexbo

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With revenue being gross income, it will be interesting to see how well we have mitigated this with the likes of Sanchez, Lukaku, Herrera, Valenica, Young and Fellaini off the wage bill. Surely a considerable saving there.
 

Nou_Camp99

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Commerical revenue continues to go up though. Glazers will love Ed for that. If only that's all he did and we had a proper football man running the football side of things we might not be a perma laughing stock.
 

12OunceEpilogue

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We don't need to spend the amount we do, to do that though. We're a 5-6th level club with the most expensive CB in the world, most expensive midfielder in the league, the highest paid GK in the world and stacked with other very expensive players.

Our return of investment is awful.
Some of the contracts we've thrown around are ridiculous. I was excited about Sanchez's signing, and so were most fans, but in hindsight we shouldn't have gone anywhere near that deal and when you consider some of our other transfer business and contract extensions you can only conclude we have invested poorly. I do not think it's time to stop all big money signings and contracts, if the right players are there we should be willing to stump up the huge money required to seal the deals, but I see your point for sure.
 

AltiUn

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Will fall even further next season due to not getting CL for 2 consecutive seasons triggering a penalty in the Adidas deal.

I'm sure the OT faithful will be happy to help the club back their beloved manager with their own back pocket to make up for it though. Season tickets have been frozen for long enough now.
I mean, we're hardly a million miles off CL football, if City's ban is upheld then we're currently in one of the CL spots. We've made 2 new signings and we've got some players returning at a crucial point in the season, we also have another avenue by winning the EL, it's not a foregone conclusion that we'll miss out.
 

Globule

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Yes. I find the commercial revenue up by 6.5% to be more interesting, you'd think that would have suffered a bit too.
It grew, but you still have to look at it as a missed opportunity. How much could we be making with a successful team.
 

jackal&hyde

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It grew, but you still have to look at it as a missed opportunity. How much could we be making with a successful team.
No doubt. If i were a shareholder i'd be happy with the latest recruitment and i'd want more of that.
 

Aarron Swift

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The wage bill is down 9% vs last year, but that is largely because of clauses in the players' contracts that reduce their salaries in years where we have no CL football.
Good to hear, although as you said, is down for the wrong reasons, out of interest do you know if it would it have been up if we were in CL this season?

From the reports previous reported on wage bill. I think just from base salaries before bonuses. the players likely to go/we'd like to move on permanently, Sanchez, Pogba, Matic, Lingard, Smalling, Jones, Rojo, Borthwick, Chong, Gomes, Grant, Fosu-Mensah........Thats around £60m in annual wages before bonues gone. with new signings & any contract renewals. its hard to think we wouldn't have a reduced wage bill after that.
Controversial and a debate for a different time but replacing De Gea with Dean Henderson, would reduce wage bill by another £15m a year (given Henderson would likely sign an improved terms deal)
 

Tom Cato

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Well if I was a shareholder (one of the other 20% or so that own the club apart from the glazers), I'd want the club the club to slow down the spending. We're spending among the top 1-2 clubs in the country, and performing like the 5-6th best. We need to pull the spending back into reflect our current status in the game.
Are you saying that you as a shareholder wants the club to reduce its ambition, and in turn reduce the value of your shares?

The very simple answer here is that success requires investment.

I made a post yesterday pertaining to net spend and how everyone gets it wrong. Ill just post it here again since it seems relevant to how my fellow posters might perceive the clubs ability to perform in the transfer market.

I just want to clarify how NET spend is actually calculated in a operating budget. There's a lot of "we can afford this and this and then its stop" going on.

Net spend is not actually calculated as player bought v player sold in the clubs financial records. Its listed as that in pages like Transfermarkt and the likes, but that's not actually how football clubs accounting works.

Player purchases have a value. That value includes: Transfer fees, agent fees, player wages+imaging rights+sign on fees+contract length. ALL of that combined, is listed in the books as the transfer value. Because that is the clubs listed expense for this asset. The asset is then amortized in the books, normally over the players contract length. for example a player with a contract length of 5 years and an imagined sum total of all costs, is put in the books as y1 £20m y2 £20m and so on. For example Harry Maguire's purchase is not listed as £80m in the clubs financial records, but rather amortized over the length of his contract with equal value pr year. it's a cost writedown.

Bruno Fernandes might have cost £50m (or thereabouts). But his actual transfer total cost is a LOT more than that. Purchases are usually a smaller part of a clubs expense budget. The real cost comes in player salaries and image rights, those are the ones that eat the cash, not the £80million price tag.

Purchases are usually paid out over several quarterly installments over 1-2 years.

So while we might, for example buy players for £200m this year, the clubs EBIDTA (Earnings before interest, tax, depreciation and amortization) and cash reserve will usually determine how much we can actually take on in payment obligations. .

There's a lot of posters and even youtube channels that refer to our "net spend" as proof that the club is in trouble.. but that's just not how any of that works whatsoever. It works well as a Transfermarkt listing to give a overview of the clubs business, but as for the accounting aspects of it....not even remotely related.

The key financial aspect is how much cost can Manchester United take on in the operating budget. So while we worry that we will "only have a net spend of £60 million and that's bad". Its because we did not find the player to buy, not because we simply cannot.

Take this overview of the clubs current most expensive contracts. Look what De Gea costs in the length of his contract. He costs 1 Paul Pogba. Alex Sanches costs 1 Maguire. And so on.

The thing we should ALL care about his what the players contract says. Yet this is what absolutely no one cares about. its all about the transfer fee, despite the fee often being way less than the players contract.

The reason i mention all of this is that I want to somehow reassure people that our financial capabilities to actually go on a buyers spree this summer, is very much there. When they say that the money is there, its there. Its part of the clubs current and future operating income. as well as cash reserve that gets depleted and filled with regular intervals.
PLAYER (30)POS.AGECONTRACT TERMSAVG. SALARYTRANSFER FEEEXPIRES
David De GeaGK296 yr£117,000,000£19,500,000£21,250,0002025
Alexis SanchezF315 yr£81,900,000£16,380,000-2022
Anthony MartialF246 yr£78,000,000£13,000,000£51,000,0002025
Paul PogbaM265 yr£75,400,000£15,080,000£89,250,0002021
Harry MaguireD267 yr£59,250,000£8,464,286£99,180,0002026
Marcus RashfordF224 yr£41,600,000£10,400,000-2024
Luke ShawD245 yr£31,200,000£6,240,000£31,880,0002024
Victor LindelofD255 yr£31,200,000£6,240,000£29,750,0002025
Frederico de Paula SantosM265 yr£31,200,000£6,240,000£52,000,0002023
Aaron Wan-BissakaD225 yr£23,400,000£4,680,000£62,700,0002025
Nemanja MaticM313 yr£18,720,000£6,240,000£38,000,0002020
Juan MataM312 yr£16,640,000£8,320,000£38,020,0002022
Phil JonesD284 yr£15,600,000£3,900,000£16,410,0002024
Jesse LingardM274 yr£15,600,000£3,900,000-2022
Sergio Romero


The financials of MUFC are available here: https://www.marketscreener.com/MANCHESTER-UNITED-PLC-11217013/financials/

The club budgets with the fiscal year 2021 (thats July 2021 - June 2022) with a operating income of £622m and a record high £661m in 2022. The reason the club budgets this way is because they estimate that their invesments into the club will yield CL football. New partnerships yield increased income, same with new sponsordeals.

So far under OGS we have spent very well. The club has held 11 out of its last 16 games to a clean sheet. 11 in 16. That's incredible numbers. For a defense that gets a lot of flak, they don't get anywhere near the praise they do for essentially shutting the door to most teams. Talents are improving rapidly. Greenwood has surpassed my goal estimate for his season already. Williams came from "nowhere". Tuanzebe looks like a starter. AWB has been phenomenal. Rashford is breaking out. Bruno Fernandes has been amazing thus far. Harry Maguire is the team captain

Investments are absolutely crucial to this teams future success. When you struggle, you don't decrease the effort, you increase it. With help of very, very talented financial bankers that can keep track of the clubs finances and hold us well and clear of any monetary hardship. And so far, in this regard, Woodward has done a fantastic job.

Wages are always the biggest part of the clubs operating budget. Transfer fees are secondary. This summer we are all in for Jadon Sancho.
 

LilyWhiteSpur

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The Glazers will continue to suck the money out and invest no money of their own, they will do this until it is no longer viable for them to do so. Their only concern is the shareholders, as long as they get a return all will be well. No I am not wallowing in this its just the way football is, its pretty sickening.

Bought the club on debt, invested none of their own money and made £1B, the rich just get richer.
 

Rozay

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Will fall even further next season due to not getting CL for 2 consecutive seasons triggering a penalty in the Adidas deal.

I'm sure the OT faithful will be happy to help the club back their beloved manager with their own back pocket to make up for it though. Season tickets have been frozen for long enough now.
Might.
 

cyril C

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The wage bill is down 9% vs last year, but that is largely because of clauses in the players' contracts that reduce their salaries in years where we have no CL football.
Yes, top players lose 20-25% if no CL. I guess Woodward and staff lose bonus as well. In fact I am surprised only 9% reduction.