Manchester United makes £84m loss
Manchester United – seen as one of the richest football clubs in the world – has made a near £84m loss due to the cost of managing debt. A supporters group tells Channel 4 News the team will suffer.
Manchester United, currently third in the league, made an operating profit of £101m due to increased broadcasting and commercial income, but an £83.6m loss when interest charges and the cost of restructuring debt were included.
It also lost out in exchange rates, and a reduction in the value of the playing squad. Match day revenues also dipped as the side exited both the Champions League and the FA Cup relatively early last season.
The club’s financial pain follows rival club Liverpool’s sale to new owners in a bid to shed millions of pounds of debt.
Manchester United is also saddled with serious debts as a result of the Glazer family’s acquisition of the club in 2005 for £790m.
Supporters have staged a number of protests against the Glazers’ ownership – most prominently wearing the green and gold scarves of Newton Heath, the club United formed from in 1902.
But a bid to buy out the Glazers by a collection of wealthy individuals – the Red Knights – came to nothing.
Money ‘frittered’ away
Duncan Drasdo, chief executive of the Manchester United Supporters Trust – the group which wants the supporters, rather than the Glazers, to own the club – told Channel 4 News that every time more bad news comes out about the club’s financial situation, more people turn against the Glazers’ ownership.
“Every time we see it in black and white, it brings people on board who were sceptical but who now see it has to change,” he said.
Manchester United’s gross debt is £522m, the results revealed. The club also has payment-in-kind (PIK) loans of around £200m, which have a higher rate of interest.
Mr Drasdo said: “Manchester United is one of the best run and most successful clubs in the UK, and it has been for the last 20 years. That has not really changed under the Glazers’ ownership. What has changed is the amount of money taken out of the club to service the debt.
“It’s a very successful football club but with all the money taken out, not put in, to the football club.”
He added: “So the supporters who could have benefitted – from reduced ticket prices or at least not the rises in prices we have seen under the Glazers’ ownership – are seeing that money frittered away, as the competition from other clubs is increasing.
“Like Manchester City – their owners are pumping money into the club, while Manchester United’s owners are pumping it out.”