Manchester United scores record revenues performance, but remains in the red

Manchester United has achieved record revenues for its 2023 fiscal year, driven by commercial and matchday revenue as the game recovers from the pandemic.

Total revenues for the year to June 30, 2023, were £648.4m, up from £583.2m the previous year.

The club is predicting a further record performance for its next set of results.

For fiscal year 2024, the company is predicting revenue guidance of a record £650m to £680m, and new adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) guidance of £140m to £165m.

Adjusted EBITDA for the current figures was £154.9m, up from £81.1m in 2022.

However, the record sales weren’t enough to turn red to black on the balance sheet, although United did managed to slash the prior year’s net loss of £115.5m to a net loss of £28.7m.

Non-current borrowings were £507.3m, compared with £530.4m at the prior year end.

A breakdown of the revenue streams shows that commercial income for the year was £302.9m, an increase of £45.1m.

Sponsorship revenue was £189.5m, an increase of £41.6m, due to the impact of the new sponsorship agreements and the men’s first team’s 2022 pre-season tour, and retail, merchandising, apparel and product licensing revenue was £113.4m, an increase of £3.5m over the prior year, due to the increased number of home matchdays in the current year.

Broadcasting revenue for the year was £209.1m, a decrease of £5.8m, primarily due to the men’s first team participating in the UEFA Europa League compared with the UEFA Champions League in the current year, mostly offset by improved performance in both domestic and continental competitions.

Matchday revenue was £136.4m, an increase of £25.9m, due to playing seven more home games across all competitions in the current year, together with strong demand for match by match hospitality offers.

Total operating expenses for the year were £681.1m, a decrease of £11.5m.

Employee benefit expenses, or mainly players’ wages, for the year were £331.4m, a decrease of £52.8m, as a result of squad turnover and the men’s first team not participating in the UEFA Champions League in the current year.

Other operating expenses for the year were £163.2m, an increase of £45.3m. This is primarily due to costs associated with the men’s first team pre-season tour and increased matchday costs associated with progression in domestic cup competitions.

In addition to non-current borrowings, the group maintains a revolving credit facility which varies based on seasonal flow of funds.

Current borrowings, at June 30, 2023, were £106m compared with £105.8m at the same period last year.

As of June 30, 2023, cash and cash equivalents were £76m, compared with £121.2m the previous year, mainly due to investment in the first team playing squad.

During the reporting period the Men’s squad was strengthened by the recent additions of Mason Mount, Andre Onana, Rasmus Hojlund Jonny Evans and Altay Bayindir, with Sergio Reguilon and Sofyan Amrabat acquired on loan.

New long-term contracts were signed with Marcus Rashford and Diogo Dalot.

The Women’s squad was strengthened with new signings Gemma Evans, Geyse Da Silva Ferreira, Emma Watson, Hinata Miyazawa, Evie Rabjohn, Irene Guerrero, Gabby George, Phallon Tullis-Joyce and Melvine Malard on loan.

In July and August, the club delivered strong summer tour results with nearly 400,000 supporters in attendance across eight cities and five countries, including the United States.

Ticket sales for the 2022/23 season surpassed the record set in 2016/17, totalling a cumulative 2.4 million tickets sold, while current 2023/24 Season Ticket and Executive Club tickets have sold out in record time with the lowest ever churn (including a record number of Women’s season tickets).

Currently there are more than 150,000 supporters on the Season Ticket waiting list.

United said it continues to achieve continued momentum in demand for women’s football with women’s matchday revenue for the 2022/23 season at nearly three times the 2021/22 season. Old Trafford will also host the WSL Manchester Derby in November 2023.

In August, the blub announced a global record kit deal, worth at least a reported £900m, with an extension of its partnership with adidas as kit supplier through to 2035.

Earlier this month it was reported that Qatar-based Sheikh Jassim bin Hamad al-Thani had withdrawn from the long running saga to buy Manchester United.

The withdrawal now leaves the way clear for Sir Jim Ratcliffe to take a 25% stake in the club, which would leave US owners, the Glazer family, firmly in control of the board room.

Failsworth-born Sir Jim, a boyhood United fan and owner of chemical giant INEOS had previously bid for Chelsea. Many fans favoured a Qatari bid that promised investment in the stadium and club infrastructure.