Manchester United revealed their quarterly profits Thursday as the team paid the price for failing to qualify for the lucrative UEFA Champions League and Britain’s decision to leave the European Union.
Manchester United posted a 25 percent fall in quarterly core earnings as its lack of the lucrative Champions League football and fewer home games at the start of the season which hit the matchday revenue. Also, the Red Devils’ debt has risen by 18 per cent, to close to £338m (€395m). The Brexit vote in June has triggered pandemonium in the currency markets, with the British Pound plunging to new lows.
The club’s revenue for the three months ending 30 September 2016 is down by 2.8%, from £123.6m to £120.2m, sponsorship revenue has fallen by £1.9m to £44.4m, while operating profit is down by 35%, to 6.2m.
The most worrying figure, club’s chief financial officer Cliff Baty stated that is Manchester United will lose more than £20m in sponsorship income from Adidas if they fail to qualify for next year’s Champions League.
“There is a clause in the Adidas contract that applies if we are missing from the Champions League for two years in a row,” revealed United’s chief financial officer. “An example would be if we [were due to receive] £70m [in a given year], we would not receive £21m.”
However, United’s executive vice-chairman Ed Woodward has ensured that United are on their way to improve more revenue and will be determined to challenge for every trophy.
“While our financial results for this quarter reflect the impact of our non-participation in the Uefa Champions League, we are pleased that we remain on track to deliver record revenues for the coming year,” said Ed Woodward. “During the quarter we added a number of top quality players to our squad, which once again demonstrates our determination to challenge for trophies.”
However, the figures were not all dull as they showed commercial revenue is up by £3.1m to £74.3m. The Red Devils remain on course to top last year’s record revenues figure of £515.3m, expecting overall revenue of between £530m and £540m for the end of the financial year.
Manchester United are sixth in the Premier League and through to the quarter-finals of the EFL Cup alongside in contention for the knockout phase of the Europa League with two more games remaining.
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