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Man Utd first quarter revenues dip but club still predicting record year end

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By Paul Nicholson

November 16 – Manchester United have seen a dip in their first quarter revenue to 30 September 2018, in comparison to the previous year, though the club say they are still on track to achieve record revenues of £615-630 million by the year end.

The club posted revenues of £135 million for the quarter, £8.7 million down on the previous year’s £143.7 million. The result was a 22.3% drop in operational profit from £17.9 million to £13.9 million.

Broadcasting revenue was the only one of the four core revenue lines to show an increase, rising from £40.8 million to £42.8 million.

Sponsorhip, Man Utd’s biggest revenue line, dropped by £3.6 million to £75.9 million, attributed to a smaller summer tour.

The club blamed drops of £6.1 million (to £16.3 million) in match day revenue and £1 million (to £26.3 million) in retail and merchandising revenue on playing two fewer home games in the quarter.

Ed Woodward, Executive Vice Chairman, was characteristically bullish, saying: “Our financial strength enables us to continue to attract and retain top players and to invest in our academy, as we look to drive the success on the pitch that the club and our fans expect. We remain on track to deliver our record full-year revenue guidance, underpinning our long-term, strategic plan to create sustainable growth across all areas of the club.”

The club points to a new social media partnership with Kohler achieving over 1 billion social and editorial impressions worldwide, as well as a new global partnership with denim brand True Religion and renewals of Canon Medical Systems and Deezer deals as evidence of their health.

The challenge for Man Utd is still on the pitch with manager Jose Mourinho having failed to build a side that has proved it can compete for the big money honours that come with winning the Champions League and Premier League.

This is perhaps the most worrying area in the first quarter accounts, especially taking into account Mourinho’s pre-season moans of not having the money he wanted to spend on players. Even so, while the club’ housekeeping saw operating expenses for the quarter at £28.6 million, a decrease of £5.9 million. But that was matched with player expenses in Mourinho’s department going perhaps a little alarmingly the other way.

“Employee benefit expenses for the quarter were £77.0 million, an increase of £7.1 million, or 10.2%, over the prior year quarter primarily due to investment in the first team playing squad,” said the club’s results release.

Like the performances and results on the pitch, the financial numbers don’t lie. The dependency of the business on achievement at the highest level and sensible management of player costs is clear – and that is what makes Mourinho important.

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