Manchester United Shares Fall After Reports Of First Revenue Loss Under Glazers

Shares for EPL club Manchester United yesterday “fell by 3.5 per cent" after the club announced their "first reduction in revenue" since the Glazer family purchased the team in '05, according to Paul Kelso of the London TELEGRAPH. The shares “dipped after the club revealed they relied on a tax credit to deliver a profit in the first trophy-free season" under the Glazers. The tax credit of $43.8M [all figures U.S.] due to the club after they "recorded consistent losses in the first years of the Americans’ ownership” covered a $17.8M “decline in revenue caused by United’s elimination in the Champions League group stage last season.” The club last year also was “knocked out of the FA Cup in the fourth round." ManU recorded a $37.3M profit as "revenue fell" from $537.3M  to $519M. ManU still carries $708.4M of "borrowing in the form of bonds," down from $743.9M the previous year, and spent $80.2M servicing them, "down 3.5 per cent” from ’10-11. Still, the "underlying figures revealed on Tuesday will be viewed by the Glazers as vindication of their approach to United.” The figures “show that commercial revenue continues to rise rapidly, outstripping broadcast and match-day income for the first time” (London TELEGRAPH, 9/19). In London, Julian Knight writes, “The blow to the bottom line was softened by greater commercial activity." ManU has 34 partners, which brought in $189.6M "over the year to the end of June." That figure is up $21.1M "on the previous 12 months” (London INDEPENDENT, 9/19).

PROTECTING THE BRAND: Also in London, James Moore writes ManU's increased commercial revenue “was desperately needed because Man U the company barely turned a profit, and that was only thanks to a chunky tax credit.” Without the credit, the club “would have shown a loss, just like virtually every other football club.” Moore: “The question now facing Man U the company is whether Man U the brand can continue to generate the sort of revenues it has been enjoying if Man U the club suffers through an extended period without silverware” (London INDEPENDENT, 9/19).