Manchester United’s 2017/18 Finances Explained

[Music] all clubs divide their income into three main streams matchday broadcasting and commercial manchester united's matchday income fell by 1.8 million pounds last season and the main driver of the fall was united early exit in the Champions League to severe resulting in five fewer home matches since acquiring the club the Glaser's whilst criticized for many of their early pricing activities by fans have frozen matchday prices for most of the last decade and this is reflected in matchday income being relatively constant broadcasting income was 204 million pounds aided by the fact that the club rarely plays at 3 p.m.

On a Saturday and usually appears on TV at the weekend last season United was shown live on TV more times than champions Manchester City on the basis that they secured high ratings but the area in which United have excelled over the last decade has been commercial income as the club's marketing department has struck global and regional deals with everyone from tractor manufacturers to Indonesian isotonic drink partners whilst commercial income has plateaued in the last three years mainly due to the new big deals with Adidas and Chevrolet both being long-term United have announced a sleeve sponsor deal for 2018-19 with American toilet and generator manufacturer Cola which is likely to be worth many millions United overall revenues were 590 million pounds a substantial way ahead of the only other club to have announced results for 2017-18 Manchester City the income gap between the two Manchester clubs has narrowed in 2018 but over the last decade United have generated over 1.1 billion pounds more than Manchester City and far more than any other club in the Premier League for most clubs the main expenses are going to be player elated in the form of wages and transfer fee amortisation United's wage bill increased by 12% in 2017 18 despite paying no bonuses for winning trophies the increase was due to new contracts for existing staff such as Jesse lingard and Josie Mourinho as well as signing Alexis Sanchez in January for a contract estimated to cost the club 20 to 25 million pounds per year city's wage bill which a few years ago was out of control now shows more modest rises since 2013 as the owners focus on financial fair play compliance and a break-even model in terms of profitability what united do have in their favour is good control of wages as a proportion of income only a club with owners who were prepared to underwrite huge losses could have coped with city's wage bill a few years ago as wages peaked at 114 pounds for every 100 pounds of income in 2011 whereas United have always had one of the lowest wage control financial metrics since the Premier League began overall costs rose by nine percent in 2017 compared to just a 1.5 percent increase in income which has hit the profits because the glazes acquired United by borrowing huge sums of money the club has historically paid large amounts of interest on loans the good news for United is that these interest costs are falling as time progresses but have still sucked a large amount of money away from the playing budget over the years over the last decade United's net interest cost has been 447 million pounds in the early years of glazier ownership the club was seen to be a risky borrower and so ended up paying interest rates of up to sixteen point two five percent as things improved in part due to Alex Ferguson's caution in the transfer budget the interest cost has fallen but the club has paid an estimated 785 million pounds to banks since the takeover arose in 2005 other clubs funded by their owners such as Chelsea Manchester City and Stoke City have paid no interest on the sums advanced there are a variety of profit measures to consider when looking at a business the good news for United is that the club has performed well regardless of the assessment method but 2018 was poor compared to the previous year at Old Trafford operating profit is simply income less day-to-day running costs excluding interest this fell by 45% in 2018 as the increase in player costs exceeded the rise in income United's record operating profit was in 2009 when they saw Cristiano Ronaldo for then world record fee and banked a huge profit on the transaction compared to their local rivals United have made 618 million pounds of operating profits where a city for example have lost 474 million pounds profits belong to the club owners who have the choice of either reinvesting them back into the club's future or withdrawing them in the form of a dividend the Glazers are the biggest shareholders in United and they and the other shareholders took 22 million pounds of the profits for the year for themselves United spent 163 million pounds on new players in 2017 18 recruiting Lukaku Matich Lindelof and sanchez although the latter was part of a swap deal with Arsenal format terian this takes the club spending over the last decade to just over 1 billion pounds the problem for United is that the transfer market is competitive and crowded and Manchester City have spent four hundred and sixty million pounds more than them in the same period many fans talk about net spend when it comes to player trading and here United are in an unusual position as unlike many other clubs they don't need to sell to buy however since selling cristiano ronaldo in 2009 united have only made 86 million pounds in profits from player sales in the subsequent nine years city have more than that in the last three years and Liverpool exceeded this sum from the sale of Coutinho last season in summary united are in a strong financial position would was recent comment that playing performance doesn't really have a meaningful impact on what we can do on the commercial side of the business won't have gone down well with the united faithful this is further evidenced by the united boards refusal to budge on Mourinho summer transfer requests suggesting that they don't particularly care or need to care what the fans think and whether you're a red or not that's not great for football [Music] you

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