ManU posted a 25% fall in quarterly core earnings as its "absence from the lucrative Champions League competition and fewer home games at the start of the season hit its matchday revenue," according to Rahul B. of REUTERS. The club is currently sixth in the Premier League. ManU failed to reach the Champions League for the current '16-17 season "after finishing only fifth in the Premier League in the last campaign." It is "currently playing in the Europa League, Europe's second-tier competition." ManU Exec Vice-Chair Ed Woodward said, "Our financial results for this quarter reflect the impact of our non-participation in the UEFA Champions League, we are pleased that we remain on track to deliver record revenues for the coming year." The club's adjusted earnings before interest, tax, depreciation and amortization for the three months to Sept. 30 fell to £31.2M ($38.75M) from a record £41.6M a year earlier. The club said that revenue came in at £120.2M ($149M), falling from £123.6M a year ago. Commercial revenue rose 4.4% to £74.3M ($92.3M) and now makes up about 62% of total income (REUTERS, 11/17). The London GUARDIAN reported ManU's debt has risen by 18%, to close to £338M ($420M), "in part due to Great Britain's decision to leave the European Union." The increased figure is included in financial results ManU reported to the N.Y. Stock Exchange for the first quarter of the new financial year. The club’s revenue for the three months ending Sept. '16 is down by 2.8%, while operating profit is down by 35%, to £6.2M ($7.7M). The standout figure, however, is the net debt, which has risen from £286.2M to £338M ($420M). According to the results, this is due to "the strengthening U.S. dollar; with the USD/GBP exchange rate moving from 1.5128 at 30 September 2015 to 1.2941 at 30 September 2016." The exchange rate has been "directly affected by Brexit." ManU remains on course to top last year's record revenues figure of £515.3M, forecasting overall revenue of between £530M ($658M) and £540M ($670M) for the end of the financial year (GUARDIAN, 11/17).
POTENTIAL DROP: The BBC reported ManU will lose more than £20M ($25M) in sponsorship income from adidas if it fails to "qualify for next year's Champions League." The German sportswear brand "is in the second season of a 10-year," £750M ($931M) deal. After announcing a fall in first-quarter revenue, ManU said that the annual payment will be reduced by 30% if the club does not reach Europe's flagship competition for a second successive season. ManU CFO Cliff Baty said, "There is a clause in the adidas contract that applies if we are missing from the Champions League for two years in a row. An example would be if we [were due to receive] £70M ($87M) [in a given year], we would not receive £21M ($26M)." The sum is "taken off each year of the contract," with the first payment covering the years for which the deal -- which came into force in '15 -- has been active. Baty said that a failure by ManU to get out of the Europa League group stage this season would cost the club "single digit millions" (BBC, 11/17).
