Manchester United’s financial results for the second half of 2020 showed how the Covid pandemic has hit the bottom line of the 20-time English champions.
Year-on-year revenues for the same Q2 period decreased by 7 per cent to £281.8 million. Profit is also down by 7 per cent to £33.6 million, while the club’s net debt rose by 16% to £455.5 million.
The increase in net debt is primarily driven by the loss of 2020/21 season matchday cash receipts and the impact of deferred sponsorship payments, partially offset by increased broadcasting revenues as the club played Champions League football.
United have not played a game in front of Old Trafford for a year and each game played without the 74,000 fans which fill the stadium to capacity loses £4 million. Matchday revenue is down 95.5%.
Ahead of an investor call at the end of trading at the NYSE, the club’s leading executive Ed Woodward said: “As we approach a full year since our last game with fans at Old Trafford, we reflect on an extraordinarily challenging 12 months for football and society as a whole.”
“While the disruption to our operations remains significant, we are pleased by the tremendous resilience the club has demonstrated through the pandemic, underpinned by the dedication of our people and the strength of our commercial business.”
“We have been reminded of the importance of football as a source of community, entertainment and pride to fans around the world, even as we have sorely missed them at Old Trafford.”
“The progress made by Ole and the players this season is clear and our thriving Academy and Women’s team are also adding to the optimism we feel about the future on and off the pitch,” he added.
In men’s football, United are second in the Premier League, but form has slipped in recent weeks and the team who headed the table in January are now 14 points behind Manchester City.
United’s view is that the solid commercial revenues which are slightly down vs same quarter last year and slightly up vs the previous quarter, plus the resurgent broadcast income allowed the club to offset the severity of impact from lost matchday revenue during the quarter.
The club feel they are coming through the worst of the pandemic and see light at the end of the tunnel, although United won’t see benefit in terms of revenue until fans are back in the ground.
That should be in May for the final home game of the season, though hopes were high that Old Trafford could welcome fans in September and then December.
United are optimistic about the long-term outlook, but the impact of the pandemic remains severe and that will be a factor as the club approach the Summer.
That could be taken as warning to fans not to expect previous levels of expenditure in the transfer market.
Fans could understand that, but the Glazer family who own the club continue to be as unpopular as when they took over the club in 2005 by using a highly leveraged buy-out which prompted sustained fan protests and split the club’s match going fan-base.
Any financial figures are viewed with scepticism from fans, but it’s clear United are weathering the pandemic better than rival clubs.
United are also involved with potential changes to the structure of European football. Woodward said:
“In Europe we continue to play an active role through the ECA in discussions on the future of UEFA’s European club competitions after the current competition cycle ends in 2024.”
“While many details are yet to be resolved, we look forward to seeing the full final proposal from UEFA that we anticipate will include a greater involvement of Clubs in the governance and control of the competitions, and of course, a new format with greater appeal to fans, and which, crucially, will continue to go hand in hand with thriving domestic leagues.”
“Demand for live football remains strong and we feel very confident about the long-term prospects for our sport. In the near-term, our focus remains on preparing for the return of fans to Old Trafford.”
“We are seeing some positive examples around the world of live events with reduced capacity crowds delivered safely with social distancing.”
"The successful rapid rollout of vaccines and falling rate of infections in the UK makes us optimistic about the Government’s roadmap out of the lockdown, including plans for the gradual reopening of sports stadia to spectators beginning this spring,” he added.
“Initially this will be with limits on capacity, but we are hopeful of crowds ramping back up to full capacity next season.
“As we look beyond the pandemic, we feel more confident than ever about the power of sport to unite and inspire across generations, cultures and ideologies.”
“Football, in particular, is playing an active role in the campaign against racism and other forms of discrimination that still sadly pose a challenge for our game and our society today.”
“We, as a club, will continue to be at the forefront of those efforts.”
Woodward also spoke of the club’s “self-sustaining operating model” which will “enable this club to emerge from this crisis in a stronger relative position” and spoke up United’s improving revenues in China, optimism around increased broadcasting deals and sponsorship renewals.
