United count cost of failure to qualify for Champions League
THE failure of Manchester United to qualify for the European Champions League and a fall in sponsorship income has led to a dip in quarterly profits and revenue.
The football club added star names Eric Bailly, Zlatan Ibrahimović, Henrikh Mkhitaryan and Paul Pogba to its squad as its wage bill climbing to £62.3m, an increase of £3.4m.
Ed Woodward, executive vice chairman, said: “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.
“During the quarter we added a number of top quality players to our squad, which once again demonstrates our determination to challenge for trophies.”
Quarterly results for the New York Stock Exchange-listed football club’s first quarter to September 30 show overall revenue down 2.8% to £120.3m (Q1 2015: £123.6m) and profits down 34.7% to £6.2m (Q1 2015: £9.5m).
The club said it was on course to deliver full year revenue of between £530m to £540m while full-year adjusted EBITDA was projected at between £170m and £180m.
Net debt rose to £33.7m from £286.1m – an increase of 18%, although a key contributor to the increase in net debt was the strengthening US dollar, the club said.
Sponsorship revenue for the quarter was £44.4m, a decrease of £1.9m, or 4.1%, over the prior year quarter, due to playing fewer tour matches.
Retail, merchandising, apparel and product licensing revenue for the quarter was £27.4m, an increase of £5.1m, or 22.9%, over the prior year quarter, due to the commencement of the Adidas agreement and bringing in-house of several businesses.
Broadcasting revenue for the quarter was £29.1m, an increase of £1.5m, or 5.4%, over the prior year quarter, primarily due to start of new Premier League broadcasting rights agreement, partially offset by non-participation in the UEFA Champions League and playing one fewer league home game.
Matchday revenue for the quarter was £16.8m, a decrease of £8m, or 32.3% over the prior year quarter, primarily due to playing three fewer home games across all competitions.
Five sponsorship deals were announced in the quarter, included global contracts with EA Sports and Tag Heuer, a regional and global tie up with Apollo, the renewal its Hong Kong Jockey Club agreement and another with Virgin Money.
