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Manchester United lost £ 70 million in the period to June 30, 2020 as a direct result of the coronavirus pandemic.
The figures are outlined in United’s 2019-20 financial statement, which covers the period during which English football was completely shut down.
United’s total revenue was down 18.8% from 627.1 million pounds to 509 million pounds, but part of this was due to the club not qualifying for the Champions League last season.
In last year’s statement, United had estimated that revenue could reach 580 million pounds.
English football was halted in March in response to the pandemic and since resuming in June it has been played without fans.
Speaking on Wednesday’s conference call with investors, United Executive Vice President Ed Woodward urged the UK government to follow suit in Europe by allowing fans to come back “as soon as it is safe to do so” and said the ” Inconsistencies “in the rules were” frustrating “.
“If people are allowed to sit on a plane for hours, or in the movies, or even watch football in a movie theater, why not outdoors in a stadium that is professionally managed and controlled?” Woodward said.
He also confirmed that the club played an “active role” in the plans known as Big Picture Project, which was rejected by Premier League clubs last week, while distancing United from reports of creating a new European Premier League.
On Tuesday, it was reported that talks took place on creating a new £ 4.6 billion European Premier League, involving the best teams from across the continent.
“I saw reports. I don’t know where it came from,” Woodward added.
Last week, Premier League clubs rejected ‘Project Big Picture’, a proposal to reduce the league from 20 to 18 clubs and eliminate the EFL Cup and Community Shield. It would also have seen more power transferred to the so-called ‘big six’ Premier League clubs.
“There will always be an intense debate about any change in the structure of football, just as there was before the formation of the Premier League 28 years ago,” added Woodward.
“Now, at this critical juncture for the game, we must ensure that the enormous success of the Premier League is reinforced while ensuring that the broader football pyramid continues to thrive in a rapidly changing media environment. To achieve this , a strategic vision and leadership will be necessary.
“We are pleased that the Premier League has committed to working together on a blueprint for the future structures and funding of English football. It must now deliver on that promise, and we are committed to playing a leadership role in driving that process towards success. . “
All areas of United’s revenue have been hit, but broadcast revenue was hit especially hard, dropping 41.9% from £ 240.2 million to £ 141.2 million.
The club also confirmed that net finance costs had increased by £ 3.5 million to £ 26 million. However, officials have emphasized that despite the huge increase in United’s debt, by 132.9% to £ 474.1 million, this was due to a reduction in cash reserves and the principal debt remains. without changes.
United also announced a six-month extension to its t-shirt sponsorship agreement with Chevrolet, which now expires on December 31, 2021.
Analysis
Many Manchester United fans dismiss messages from Old Trafford on the financial impact of Covid-19 because they argue that much more is lost due to financial charges that must be paid due to the club’s debt than to the pandemic.
Even today, finance costs worth £ 26 million were included in United’s financial statement.
However, this was anticipated as this is how the Glazer family has chosen to structure the club.
What I would not be prepared for would be closed-door games, discounts to broadcasters and the closure of the famous ‘Megastore’. This has come at a cost of around £ 40 million. Part of the remaining £ 30 million will be recovered because the season ended three months late.
However, on June 30th the £ 50 million season ticket money was not received as anticipated and the cash flow was reduced by £ 80 million due to deferred payments from sponsors, some of which already have been received, but others have not.
It all adds up to a confusing and uncertain picture, which possibly explains two things.
First, why the managing director focused on talking about United’s work in developing a media strategy from China, where the Premier League has had to ditch its broadcast partner, and second, why Ed Woodward spoke about the ‘Project Big Picture’ club has been involved in and underscored the need to “reinforce the enormous success of the Premier League” in what he called “a critical moment for the game.
None of these topics needed to be covered (the conference call they were discussed on was for investors, not the media) and there were only two questions on that.
But those investors are interested in the bottom line. It was not by accident, Arnold said the club was: “Relentlessly seeking growth opportunities for our brand.”
China is obviously a growing market. But also, potentially, it is the Premier League and international football. Through Project Big Picture and a European Premier League, the big clubs could earn much more than they.
Woodward said he had no idea where this latest story had come from and that he was engaged in discussions with UEFA on the format of European football starting in 2024.
We don’t know how that will turn out yet, but on the day they confirmed the massive financial hit they’ve suffered, United made it clear that, along with other heavyweight clubs at home and abroad, they are looking for ways to generate more revenue, not less.
