United braced for more challenges after profits plunge

Manchester United can draw on cash reserves of £90 million and £150 million in credit to tide them over the Covid-19 uncertainty, says executive vice-chairman Ed Woodward.
Manchester United can draw on cash reserves of £90 million and £150 million in credit to tide them over the Covid-19 uncertainty, says executive vice-chairman Ed Woodward.PHOTO: REUTERS

LONDON • Manchester United are the third-richest football club in the world and play in the world's most lucrative league, but even a club of their size have been unable to escape the financial maelstrom caused by the coronavirus pandemic.

The English Premier League has been on hold since March 13 and the suspension has already cost the Red Devils - the richest football club behind Barcelona and Real Madrid - £28 million (S$48.6 million).

After the club's third-quarter results to March 31 were revealed on Thursday, chief financial officer Cliff Baty said they will have to give back £20 million in TV revenue to broadcasters even if the campaign is completed.

United also suffered another £8 million loss as three of their games in March were postponed.

That figure is expected to rise as it only covered just 18 days of the Premier League's shutdown, with no firm date on when the top flight can resume and no end to the Covid-19 crisis. As such, the club withdrew their financial guidance for the year due to the "ongoing uncertainty... and the evolving related economic and financial consequences".

With fellow top-flight clubs also facing a similar rebate to broadcasters - on top of no match-day revenues and drastically reduced hospitality receipts owing to closed-door games for the foreseeable future - the Red Devils have warned the Premier League will be dealing with the economic fallout for "years to come".

Calling the situation "one of the most testing periods in the 142-year history of Manchester United", executive vice-chairman Ed Woodward 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. 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 other stakeholders.

"We must recognise that this crisis will not disappear overnight and that the world that emerges will be different from how it was before."

However, Woodward said cash reserves of £90 million as well as access to £150 million in credit "provides financial flexibility to support the club through the disruption caused by Covid-19".

AGENCE FRANCE-PRESSE, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on May 23, 2020, with the headline 'United braced for more challenges after profits plunge'. Print Edition | Subscribe