United now loss making

Manchester United’s pre-tax loss for the first half increased from £22m to £25m, so there was little overall movement.  Although Manchester United’s revenue was basically flat, this disguised two large offsetting movements. Commercial shot up £37m (29%) from £129m to £166m, but broadcasting dropped £36m (28%) from £130m to £94m.

The impact of interest payable on Manchester United’s accounts continues to be evident, rising from £17m to £19m. This is the highest amount charged in the first half in the last five years.  The significant swings arise largely because the majority of the club’s debt is denominated in USD and unhedged, so the significant weakening in the Pound against the Dollar has led to higher interest charges in the club’s accounts,.

The increasing financial challenges faced by United are clearly illustrated by the deterioration in profitability in the last two seasons. They posted healthy profits in the previous eight years, but the club now seems to be loss-making.

United’s £384m in wages in 2021/22 was comfortably the highest in the top flight. In fact, this was the highest ever in the Premier League, despite the club only finishing 6th and missing out on the Champions League.

United have made around £60m payouts to former managers in recent years, so this season’s bottom line will benefit from no repeat.

Manchester United spent £221m on bringing players to the club this season, which was their second highest outlay ever, only surpassed by £243m in 2017/18.   In fact, United have splashed out an incredible £1.7bln in the last 10 years, so they have clearly spent money, but maybe not as well as their fans would have liked.

Even after all the various refinancings, United’s £742m gross debt is significantly higher than the £604m owed after the Glazers’ leveraged buyout 17 years ago (although there has been substamtial inflation since then so the real figures are different). In fact, this is the club’s second highest ever financial debt, only below £773m in 2010.

In the period since the Glazers’ arrival up to 2021, Manchester United’s £725m interest payment was nearly three times as much as the next highest club, namely Arsenal with £251m.  Looked at another way, it was very nearly as much as the rest of the Premier League combined, which added up to £749m.

in the period since the Glazers’ arrival up to 2021, Manchester United’s £725m interest payment was nearly three times as much as the next highest club, namely Arsenal with £251m.  Looked at another way, it was very nearly as much as the rest of the Premier League combined, which added up to £749m.

Potential investors into United will presumably believe that they can do much better than the current owners, but it’s still difficult to justify the Glazers’ reported £6 bn asking price.