Manchester United signed a deal with Chevrolet in 2012, strengthening its American roots
Manchester United have announced a record annual revenue of £433.2m which increased 19% from the previous season. Part of this revenue comes from sponsorships (£135.8m) as this saw a staggering 49% growth. Broadcasting revenue saw a surge of 33.7% and this is expected to reduce this year due to lack of Champions League display, which had a 5% contribution previous year. Match-day income decreased by 0.9% which is partly because the tremendous increase in previous season's income due to Old Trafford being a host to a few London 2012 Olympics games.
So how did Manchester United spend their money in the previous season?
Where the Annual revenue increased by 19%, the total operating costs of the club rose equally by 20%. However, the Revenue has been £60.9m higher, hence the profitability. Employee benefit expenses (which includes salaries to our big guns such as Rooney, Mata and Van Persie) was an astounding 58% of the operational cost. Wayne Rooney himself is on a reported £14m a year contract. Acquisition of Galacticos such as Angel di Maria and Falcao will certainly add to the wages bill in the current season. A pre-mature departure of Mr. David Moyes and his coaching staff cost the club £5.2m.
Manchester United now has 3 global sponsorship partnerships in the form of Chevrolet, Aon and Nike. From 2015-16 season, Nike will be replaced by Adidas in a record breaking £750m 10 year deal. Real Madrid's £31m a year deal was previously the highest.
However, the adjusted net income (after tax) amounts to a mere £23.8m.
Outlook for 2014-2015:
The club is not optimistic on boasting immense profits for the next year due to two reasons mainly. First, the lack of Champions league football will directly hit the broadcasting and match-day revenues and should cut the club's annual income by around £50m. Secondly, the club's net transfer spending for 2014-2015 is already £90m inflated by the £60m acquisition of Angel di Maria from Real Madrid.
So assuming MUFC finishes third in the premier league, a revenue of between £385m and £395m is expected for the 2014-2015 season.
Five Key Financials a Manchester United fan should be aware of:
1. £720m - The price the Glazer family paid to buy Manchester United FC in 2005
2. £341.8m - Amount of club's debt despite reducing it by 12.2% in the previous season
3. £50m - The price Manchester United will lose out for not being in 2014-15's champions league
4. £59.7m - Club's record signing fee to secure the talismanic ex Real madrid's Angel di Maria
5. £53m a year - Chevrolet will pay this amount to have its name on the current MUFC jersey.
You can review the full annual financial report by clicking here.
Are you a financial expert? Do you think Manchester United can handle their finances in a better efficient way? Then we urge you not to be quiet about it and certainly comment!