Manchester United have revealed the extent of the coronavirus crisis on their finances in the latest quarterly results with the club’s debt rising by £127.4million – a 42 per cent increase.
United announced on Thursday that they are withdrawing their previous forecast for 2020 ‘given ongoing uncertainty due to COVID-19 and the evolving related economic and financial consequences’.
But the latest figures show just how much United and other Premier League clubs have been hit by the two-month football shutdown and also confirmed they will have to repay £15m to broadcasters.
Manchester United have seen debt soar by 42 per cent to almost £430m in recent months
Executive vice-chairman Ed Woodward is bracing for a heavy impact from the Covid-19 crisis
The standout figure is that the club’s net debt has shot up to £429.1m due to loss of income and the pound weakening against the dollar.
Broadcasting revenue is down more than 50 per cent on the previous quarter, a decrease of £27.7m due to the estimated £15m rebate due to Sky Sports, BT Sports and international broadcasters.
Matchday revenue was down by £2.6m due to United’s remaining home games in the Premier League and Europa League being postponed.
Retail revenue also dropped by £1.1m due to the closure of the club’s megastore, although there was still a small increase in both commercial (£2m) and sponsorship revenue (£3.1m).
United’s executive vice-chairman Ed Woodward described the current crisis as one of the largest in the club’s long history.
‘Our third quarter results published today reflect a partial impact that the pandemic has had on the Club, while the greater impact will be in the current quarter and likely beyond,’ he said.
‘There are still profound challenges ahead, and for football as a whole, and it is safe to say it will not be “business as usual” for some time.
‘Our club is built on a solid foundation. We remain one of the most popular teams in the most followed global sport and have created a strong financial base with diverse revenue streams.
‘However, the repercussions of the pandemic are now being felt widely across the football community, not just by clubs, but also by players, supporters, broadcasters, sponsors and many other stakeholders.
‘We must recognise that this crisis will not disappear overnight and that the world which emerges will be different from how it was before.
‘That will create challenges for football, like many other industries, but it also brings an opportunity for innovation and creativity as we explore options for resuming football in ways that still protect public health.
Finances will take another hit with any more games this season played behind closed doors
‘While nobody is claiming that football is the most important thing at this time, our sport can play a role in helping restore morale and bringing people back together as societies recover.
‘Indeed, the absence of live football, and the unifying experiences it creates for billions of people around the world, has reminded us all of how much the sport means to us.
‘With that in mind, we remain firmly optimistic about the long-term prospects for the club and for our exciting, young team once we have worked our way through what is undoubtedly one of the most extraordinary and testing periods in the 142-year history of Manchester United.
‘This club is built on resilience in the face of adversity and those qualities are being proven once again now.’
But Woodward insisted that financial results take second place to the more wide-ranging impact of the pandemic.
‘Our focus remains on the health and well-being of our colleagues, fans and partners around the world and we are extremely proud of how those connected to the club have responded during this crisis,’ said Woodward.
United owners Avram Glazer (left) and Joel Glazer will take a heavy hit amid the Covid-19 crisis
‘Since the start of the pandemic, Manchester United and our Foundation have provided assistance to hospitals, charities and schools in our communities, as well as support for frontline workers and vulnerable fans.
‘These actions reflect our core values as a club and the resilience through adversity that we have demonstrated many times throughout our long history and will do so again to weather these current challenges.
‘In that spirit, we look forward to the team safely returning to the pitch and building on the exciting momentum that Ole and the players had previously achieved, while taking all necessary steps to protect public health. Our thoughts remain with all those affected during this unprecedented time.’
United’s financial statement further explained how the club have reacted to the worldwide crisis.
It read: ‘Manchester United has taken a range of measures to support its communities in response to the COVID-19 pandemic, including donations to food banks and outreach to elderly and disabled supporters.
‘In addition, the Manchester United Foundation has committed over £1M to community initiatives, including the supply of 60,000 meals for health workers in local hospitals and support for schools and vulnerable children across Greater Manchester.
‘The Club has also used its media platforms to deliver public health messages and to support frontline workers around the world.
Ole Gunnar Solskjaer’s team had played themselves into good form when the season stopped
‘Operationally, the impact of the pandemic and measures to prevent further spread continues to disrupt its businesses in a number of ways, most significantly in Broadcasting and Matchday operations.
‘Old Trafford and its flagship Megastore operations have been closed to visitors since 20 March 2020 and Museum, Stadium Tour and Red Café operations have been closed since 17 March 2020.
‘Government imposed restrictions have also resulted in the postponement of the Premier League, UEFA competitions and FA Cup competition since 13 March 2020.
‘Postponement of the Premier League and changes to match scheduling has resulted in a reduction in the total broadcasting revenue expected for the season and has impacted broadcasting revenue during the quarter for matches played to date.
‘In addition, during the quarter, Broadcasting and Matchday revenues were impacted due to the postponement of three matches: one away Premier League match, one home Round of 16 Europa League match and one away FA Cup quarter-final match.’