Manchester United plc today posted record losses of £83.6m, largely owing to interest repayments on its £522m debt and one-off charges relating to the bond issue that was the catalyst for fierce protests against the club's American owners.
After a week in which Liverpool fans have seen their club fight to ditch owners who left it mired in financial trouble, attention has swung back to the finances of their fierce rivals.
Manchester United's chief executive, David Gill, moved to reassure fans today that the club was still increasing revenues under the ownership of the Glazer family, partly as a result of an aggressive drive to develop overseas sponsorship.
He pointed to £164m in the bank, swollen by last year's £80m sale of Cristiano Ronaldo, and operating profits that topped £100m for the first time as evidence the club could continue to meet its £40m-plus annual interest payments and would not have to sell stars such as Wayne Rooney.
But the Manchester United Supporters' Trust, the group behind last season's "green and gold" protests, said the full-year results were further proof their ticket and TV subscription money was going on servicing debt rather than players or facilities. The trust's chief executive, Duncan Drasdo, said the figures would feed underlying anger among supporters.
The Glazers also owe a further £225m in high-interest PIK loans, which are secured against their shareholding in United and now accrue at 16.25% a year.
The results show that turnover at Old Trafford increased to a record £286.4m thanks to increased broadcasting and commercial income, up 5.1% and 16.5% respectively. But despite that record turnover the club's £40.21m interest bill, a £40.6m charge relating to an interest-rate swap agreement and a series of other one-off charges, some of which were paper rather than cash losses, all contributed to the £83.6m net loss.
The results are likely to result in a fresh wave of protests from fans who have vociferously argued against the effects of the debt loaded on to the club by the owners. The bond issue, in January, laid bare the Glazers' business plan and made provision for the owners to take dividends and one-off payments calculated at up to £127m from the club in its first year, including a one-off dividend of £70m. Today's results show that, as of 30 June, none of that money had been drawn down.
