Manchester United Project Record Revenue, Reveal Debt Rise in Financial Results

Manchester United announced a rise in debt on Thursday as they released their financial figures for the end of the fiscal year. But the club also painted a prosperous picture for the future, revealing a forecast of record revenue.  

As reported by Liam Prenderville of the Daily Mirror, the Red Devils’ gross debt has increased from £341.8 million to £411 million, with the strengthening of the American dollar reportedly a key factor in the rise. The club’s net debt did fall by 7.3 per cent, though.

It was also noted the club have forecast a record revenue of circa £500 million for the upcoming term. Meeting that target would put the Old Trafford club just shy of the record amount for a season—£513.7 million from La Liga giants Real Madrid.

Adam Crafton of the Daily Mail joked that this kind of impressive forecast is unlikely to help United’s negotiating stance when it comes to signing players:

"

#mufc boasting of potential £500m revenue probably isn't the best way to negotiate lower fees in the transfer market.

— Adam Crafton (@AdamCrafton_) September 17, 2015"

The club’s chief executive Ed Woodward spoke as the results were revealed and reiterated that there is a productive financial future in store for the club, per Prenderville:

"

As we look to the new season, we are enthusiastic about our strong position, both on and off the pitch.

In recent weeks we have further strengthened our squad with an exciting mix of experience and youth, qualified for the group stage of the UEFA Champions League, and seen an impressive launch of our partnership with adidas.

Our record revenue and EBITDA guidance for 2016 reflects the underlying strength of our business and our confidence in its continued growth.

"

Jon Super/Associated Press

Aside from the aforementioned factors, the cost of United’s failure to qualify for the 2014-15 Champions League became apparent. It was announced the Red Devils suffered an eight per cent decrease in revenue for the year they were out of European competition, with the amount falling from £433.2 million to £395.2 million. 

According to David Anderson of the Daily Mirror (via Prenderville), “David Moyes’ disastrous reign at Manchester United cost the Old Trafford outfit at least £38million."

Scott Heppell/Associated Press

Again, there are reasons to be positive for United when the minutiae is examined, with commercial revenue improved by £7.6 million. Areas most harshly affected by the absence of European football, such as broadcast and matchday revenue, were expectedly down, with United losing out on £28.1 million compared to 2014.

Mike Keegan of the Daily Mail summarised the results, suggesting that absence from the Champions League shouldn’t be too detrimental for the club in the long term:

Also down were player wages, by 5.5 per cent, despite the high-profile captures of Angel Di Maria and Radamel Falcao at the beginning of last season. Other operating expenses were increased by £15.3 million to £387.6 million.

Alex Livesey/Getty Images

There was also some intriguing news reported from the Associated Press, with the club apparently hoping to raise money by selling shares, per Prenderville: “...the club are trying to raise another $400 billion by selling shares in the club. In a filing to the U.S. Securities and Exchange Commission, the club announced it is making a staggering 24 million 'Class A' shares available.”

Although it’s been a rough time for the Red Devils, Keegan thinks that if these forecasts are met, then United could become the most valuable team in the world:

If you factor in the club’s £750 million kit deal with Adidas and the money coming into the Premier League from lucrative television deals with Sky, BT Sport and overseas, United are in prime position to become a financial juggernaut—not just in terms of the sporting stratosphere but in all walks of business.

Things were always going to be a little rough for the club once Sir Alex Ferguson departed and the season under Moyes’ tutelage was a costly one. But with a secure financial footing and a flush future in store, it’s surely not going to be long until we see the Red Devils back at the summit of English and European football again.