United to announce profits drop

Tue, 18 Sep 2012 12:15:00

Manchester United are expected to report a drop in revenue and profits on Tuesday, while wages have risen by around 10%.

The fall in income is a result of the club's failure to progress in the Champions League last season - unaudited estimates presented to potential investors last month predicted a fall in revenue of between 3% and 5% - an estimated ?315m to ?320m compared to ?334m for the year ending June 2011.

It is also expected to show that wages have risen by around 10% compared to 2011, but that commercial deals, such with training kit partner DHL, have also risen by as much as 13% to ?117m, softening the blow of the fall in broadcast income and prize money from European football.

The overall revenue drop is a direct result of United's failure to get into the knockout stages of the Champions League, especially compared to the 2010/2011 season when they reached the final - and which was the most lucrative final ever.

The impact of being knocked out of the FA Cup in the fourth round also has had an knock-on effect on matchday income.

The results come against the background of pressure on the price of the shares - totalling 10% of the club - sold on the New York Stock Exchange last month.

The Glazers had valued the shares at between 16 and 20 US dollars, but they were sold for 14 dollars and now the price has dropped to 12 dollars.

The absence of Champions League income form the knockout stages cost United ?14m in income from UEFA compared to the previous season. There also a ?10million fall in matchday income due to four fewer home matches taking place.

Even so, United should still be comfortably in third place in the table of the world's biggest-earning clubs behind Real Madrid and Barcelona.

Real Madrid's revenues for the 2011-12 financial year were 514m euro (?415m), a 7% rise, and Barcelona's of 494.9m euro (?399m) a 4.5% increase.

When United issued their third-quarterly report for the nine months ending March 31, the 9.9% wage increase was put down to new players and new contracts.