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We’re Rich!

Manchester United have made a record breaking £100+million profit this year, the first English club to do so.

Imagine what our great club could be doing if we didn’t then have to consider an £83.6million loss which we’ve been bundled with thanks to the ownership of the Glazers.

A few months ago Forbes magazine named United the most valuable sports franchise in the whole world, at £1.2 billion. The rest of the top 10 was, in order, Dallas Cowboys (£1 billion) then The New York Yankees, Washington Redskins, New England Patriots, Real Madrid, New York Giants, Arsenal, New York Jets and Houston Texans.

The mind boggles over what we could be achieving if not hampered by the restraints of the Glazers. I’m not just talking in terms of bringing in the best players from around the world, but how we could fund our youth development, the stadium, the training ground, and, very possibly, not rise the price of tickets practically every year.

We should be rich beyond our wildest dreams. But we’re not.

Anders Red has given a good summary:
1. Operating performance very good on cost side. Non-salary costs down by 15% despite only 7% fewer home games. Wage costs up 7%.
2. 8% fall in matchday income despite 3% ticket rise reflects weak corporate hospitality.
3. Media income up by 5.1%, from from £99.7m to £104.8m, which isn’t great in view of the new Champions League deal.
4. Reported profit before tax includes non-cash goodwill amortisation of £35.4m, one off finance costs of £40.7m. Clean number around £22m profit.
5. Commercial revenues increased 16.5% from £69.9m to £81.4m
6. The ability of the club to get non-staff costs down 15% is very impressive. Well run club with bad balance sheet.

——–
RoM gives a detailed explanation of what this all means
Full details on ManUtd.com
United Rant’s take on the figures

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About Scott

Scott is the editor of Red Matters - 50 Years of Supporting Manchester United and an author of Play Like Fergie's Boys and Not Nineteen Forever. He writes for ESPN, The Metro and Bleacher Report. Follow @R_o_M on Twitter.

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144 Comments

  1. hooligankicker says:

    @RTNK

    Will you please read and try to understand some of the posts made here and on the previous story regarding the Dippers explaining the ownership alternatives……yes of course it would be lovely to have tons of extra cash being invested in the club but it is not going to happen, whether under the Glazers or anyone else who buys the club. We need to get real about this issue and move on.

  2. willierednut says:

    To be fair, he is 40, he’s gonna retire one day.

  3. RedLife says:

    It’s good to see some posts from people thinking with their heads, not their hearts.

  4. MG says:

    See what I don’t get is Ronaldo wanted to go so anyone arguing that point just doesn’t get it

    But Hailey McQueen?

    Now that’s what I don’t get

    (Shhhhhhh don’t tell the wife : )

  5. AlphaRS says:

    This blog is gettin funnier and funnier :D
    Manchester United can continue to operate at a loss and mark my words we will get people on here saying that is ok in the form of a university thesus. Ha.
    Come on I wanna hear more. You know who you are.

  6. denton davey says:

    Bruce Thomas @ 13:35 Thanks for that link. It’s helpful although I am an absolute and complete innocent in these rarified financial/accounting matters. Another post on ROM that has impressed me with its “realistic” take on this story is the one from StateSideAussie @ 16:25, although I might just be impressed because he seems to agree with my sceptical assessment of all the doom-and-gloom as well as the naivety of some of the comments on these abstruse financial/accounting issues.

    As with many things, it might just be “too soon to tell” but I have a good feeling about this year’s team and its prospects for more glory. Hope for the best…..

  7. Toms says:

    Well now we know for sure where the ronaldo money went.

  8. theboogeyman says:

    denton davey- Hello there. I’ve got a good feeling about this year too. Even with our bad start there’s some hope in me yet.

  9. willierednut says:

    If it’s gonna be a good year, then we’re going to have to play an awful lot better than Saturdays offering, that’s for sure.

  10. theboogeyman says:

    willie- True that mate. But I’m sure we’ll get better over the season.

  11. willierednut says:

    http://www.newsnow.co.uk/A/450073719?-11193

    Another article on the debt.

  12. chimshira says:

    need more consistent defence that’s for sure!!! hopefully how that we have Rio back, we can start beating teams away…

  13. King Eric says:

    Good to see Talkshite just talking bollocks, reckoning the ONLY reason United sold Ronnie was to pay the eightyodd million highligted in the accounts. Will folk fucking realise he WANTED TO LEAVE!!

  14. Gotta hate tiny tears says:

    United Against Glazer – 30th October – March from Deansgate to Old Trafford. Not G&G, not FC, not MUST, not IMUSA, just United.

  15. King Eric says:

    RTNK – Knee jerk? I vividly recall only 4 weeks ago you stating that with the addition of Hernandez and Smalling United look good and should walk the league mate. Now after a couple of draws its all doom and gloom with ya again. There is PLENTY of time for the lads to click and they will. Fuck me we are barely out of September.

  16. King Eric says:

    Off topic but if I was Rio I would fuck Ingerlund off. Laughable that the abu media cunt’s are saying not only is his captaincy in doubt BUT he may not even get in the team? Yeah because Upson, King, Dawson are so great. Its pretty obvious that a fit Rio is still the best centre half about. You only have to look at United;s last two games.

  17. Costas says:

    @KIng Eric

    I heard that Jagielka’s form has impressed Capello. Take that for what you will. I won’t complain if Rio doesn’t wear out his back next week. I think it’s time to call it a day for England. He doesn’t have the required fitness to play for both England and United anymore.

    As for the Gerrard taking the captaincy, it was probably on the media and Capello’s wishlist for a while now. And once they saw Fergie make Vidic captain ahead of Rio, that was all the ammunition they needed.

  18. StatesideAussie says:

    @jon0077 … fuck off, you’re a disgrace.
    @Bruce Thomas/Denton Davey … that article from Sporting Intelligence is very interesting.

    We can see from this that a large chunk of the so-called “loss” is actually the result of accounting gymnastics … I don’t mean the sort of “gymnastics” that are merely thinly veiled smokescreens for the Glazers to siphon profit out of the club, I mean standard, regular procedures that are necessary from an accounting point of view, but actually meaningless in terms of cash.

    In particular, look at the third group of figures: Depreciation, Amortization of players’ registrations, and Amortization of goodwill. Together, those three items account for 84,022,000 pounds, which is then deducted from the overall revenue. But what are they exactly?

    Depreciation is an procedure to account for the decline in value of assets over time (usually fixed assets that are difficult/expensive to replace, like buildings and equipment). Obviously, over time, things wear out. The car you bought five years ago is no longer worth what it was then; it’s not even worth what it was last year. If you bought it for 20,000, and it’s now worth 5,000, then it has “lost” 15,000 over five years, or about 3,000 a year. When the car was purchased, it would have been entered in the books as an asset worth 20,000. But since it’s not worth that anymore, its value needs to be adjusted — you can’t continue to say that asset is worth 20 grand when it clearly isn’t. So that’s depreciation — a write-down on the books to account for assets that lose value over time.

    Amortization of players’ registration is a similar thing. When you buy a player for, say 20 million, that represents a double entry in the books (or a series of them). One set of entries is negative: you just spent 20 million (or agreed to spend it over time). Another set is positive: you now own something that, at the time, was worth 20 million. But as we all know, a players’ registration becomes worthless when the contract expires (or earlier, if the player is sold, or maybe later if it is renewed; but at the current time, you don’t know either of those things, so for accounting purposes, you just assume it will expire and become worthless). So again, the value of that asset (the registration) is written down: a portion of each registration is written off each year, to reflect that. In simple terms: you bought the player’s registration for 20 million, and it was a five-year deal, so you write down 4 million each year. “Amortization” is simply the technical term for writing off a portion of something over its expected life.

    And the same goes for goodwill.

    But the bottom line of all these “expenses” is that it’s just a bunch of abacus-twiddling … 86 million worth, to be precise. It needs to be there, because if it wasn’t, the accountants wouldn’t be doing their job … but as my explanation hopefully makes clear, it doesn’t actually represent cash going out of the business. It is “just paperwork”, except that it does have the superficial effect of reducing the “apparent profit” (and the taxable profit) by 86 million.

    Cheers!

  19. willierednut says:

    GHTT – Hard to believe MUST and imusa won’t be involved in this march, who’s leading it?

  20. King Eric says:

    Costas – Oh yeah mate I forgot about Jagielka. What has fucking Terry done to warrant no criticism? Oh he plays for cockneys. Yeah wouldn’t care less if Rio called it a day.

    Another thing thats pissed me off again is the fucking MAIL. What is wrong with these fuckers? They have done a 5 to watch in the under 21′s. Not ONE mention of a United player in there ie Smalling, Cleverley, Wellbeck, Brown. 4 of the 11 are United players but they don’t deem it fit to include one in their ones to watch. A piss take.

    http://www.dailymail.co.uk/sport/football/article-1318560/The-Friday-Five-England-stars-future-bring-glory-days.html

  21. Dr.Hannibal says:

    Fuck if this things carry on ,there will be league football (debt league championship) in near future teams involving real,barca,man utd,etc bar shitty they can play in BPL ..

  22. Gotta hate tiny tears says:

    willierednut

    Its just an online manchester united orginised march. if your in must march-if you wear fc and sing “tha banks” march if youve tattoo’d your arse cheeks one green one gold with luhg wrote on your cock- march-

    If You Love United And You Hate Glazers – This March is for you

  23. Trotsky says:

    I’m up for a good march. What’s the projected turnout?

  24. Gotta hate tiny tears says:

    Trotsky
    Over 1,678,234 million

  25. willierednut says:

    King Eric – We can’t keep giving Chelsea a head start, and then hoping they collapse. Sir Alex, has got almost everything out of this squad, I’m just wondering how much more is left in this squad. By the way, that’s not me being negative, just realistic. RTNK, might have went ott on a few points, but he is right in saying, that we’ll need to strengthen over the next few seasons, particularly CM.

  26. Red Devil says:

    Scott/admin members…
    If you’re there, I have sent you an e-mail
    Please have a look,
    Regards

    @ King Eric, Costas, Ghtt
    hello mates….How are you

    @jon007 – what a disgrace

    @stateside aussie—some very fair points mate, but all is not hunky dory…you’ll know soon enough as I have prepared a note to clear up a few misconceptions. lets just wait for Scott’s decision.

  27. Red Devil says:

    @willie

    completely agree…although two draws doesn’t mean the end of the world, its the nature of the performances that has me more worried….

    United getting dominated away from home like that is not very encouraging….And statements like we ‘were satisfied with a point’ dont help either…
    Since when do United start being satisfied with a point?

  28. willierednut says:

    GHTT – Cheers mate, lets hope there’s a big turn out.

  29. willierednut says:

    Red Devil – Spot on. The boss would never have accepted a performance like Saturdays, years ago. Still believe it’s all down to the players though.

  30. Red Devil says:

    @Willie

    Yes, the players need to stand up and deliver…its still a young team, still developing….quite a few players were playing their first games in the league…..Owen, Macheda, Rio, Rafael, Anderson….it does take some time to gel and get fully upto speed….
    However the fear-factor of the bygone era seems to have dissipated and now Chelsea carry that mantle now…yes, they may have had the easier games, but to still hammer teams 5-0, 6-0, 7-0 which they were doing at the back end of last season and this season takes some doing….
    How many teams have United beaten by 4 or more goals in the last few years….difficult to remember very many…..if those games were that easy, why cant United beat those same teams by 5-6 goals?

  31. StatesideAussie says:

    @Red Devil … no worries. I’ll wait to see the note and maybe comment further then, but sure, I’m not trying to make out everything is hunky dory, just pointing out that it’s not all doom and gloom either. The bottom line is that the club does make more money than it spends … a fact which isn’t necessarily obvious from the “headline” figure of an 83.6 million “loss”.

  32. Red Devil says:

    @stateside aussie

    Completely agree mate — the club does indeed make quite a lot of money
    But how much of that is solely due to Glazers, that is the question.
    The ABU media will forever try to ruffle United, but the truth is that quite a lot of that money goes in servicing totally unnecessary unproductive debt…

    The club may not be on verge of bankruptcy, but the risks to its financial future are too great…

  33. Red Devil says:

    The biggest give-away is the Cash flow statement has not been released….that would clear up a lot of things…

    look at the figures here http://www.sportingintelligence.com/2010/10/08/manchester-united-accounts-turn-record-100-8m-operating-profit-into-loss-of-83-6m-081009/

    1) just a figure of 3.7 mn given for tax…no break up of current tax and deffered tax is made?
    2) The figures given are consolidated accounts…the goodwill amortization is in the books of the holding…it wont save tax for the club…just for the holding company.
    3) The headline figure of 83 mn loss is misleading…United fans should not panic seeing it, but even without the one-off charges, United would still have not made a profit would we? that means that the entire 100 mn operating profit has been eaten up in between.
    4) Also, we may not make profits on transfers every year….13 mn is the figure for that? loss would have been greater if not for it..!
    5) amortization of player registration is not due to Glazers…it is there with every club accounts and was there even before them…
    Again begs the question how much have they actually contributed except for the small rise in commercial income every year…..compare it to the expenses and costs every year and you will see the cost benefit ratio isn’t too great!

  34. bruce thomas says:

    http://www.bbc.co.uk/blogs/davidbond/2010/10/crunching_the_numbers_at_old_t.html

    This is the most accessible account I’ve found so far.

  35. Evratheking says:

    key point from anders blod

    No money has been paid out of the club to redeem the PIKs. I have no rational financial explanation for this and nor does anyone else I have spoken to in the market. Without sounding like a poor man’s Mystic Meg, I can only reiterate that I can see no other source to repay the PIKs other than United and that £70-95m will be used to do so at some point soon.

  36. Costas says:

    @Red Devil

    Hey mate. All’s well. I hope you are fine too.

  37. Red Devil says:

    Just surviving mate…..just surviving :)
    These international weekends are a pain the arse…just looking forward to survive this week without United football..and hopefully the players can make up for the bad start once this ridiculousness called friendlies and what not ends!

  38. reddevil forever says:

    it is said in the guardian that the 165 millions are untouched and are there for sir alex if he needs to buy new players or invest in the training ground and the stadium
    we are not a club that needs to sell gill said we have money in the bank so there is no pressure
    its in the guardian if you want to read the whole article

  39. King Eric says:

    Red devil. Yeah not bad mate. Just woke up on sofa. Hope ya well

    Willie. I think central midfielkd will be sorted but that depends on owen. Anderson carroick form. Also on the development of young lads like james. Tom. Pogba. Morrison etc. The old man knows best usually and will know which lads will nake it. Have to disagree mate about the squad not havin much left in the tank. Like fgergie said the other week we coyld be set for the next eight years. Rooney fletch toni nani evans hernandez rafa etc still only young. Not looking too much into sunderland game. Just one of those awful days. Prior to bolton most were happy with our play just not the defence. Anyway sorry about grammar but on mrs blackberry and my fingers are far too sausage like

    Goodnight pal

  40. buwei says:

    i was just wondering if the rise of ticket prices actually contributed to the rise of profits… i wonder… o.O

  41. mara says:

    We are rich my ass! :) Glazers go to hell!

  42. willierednut says:

    King Eric – No probs mate. SAF genius keeps us up there year in year out, I’m just concerned how many more times this set of players can keep going to the well. Hargo possibly coming back would be a big bonus for United, but i’m getting my hopes up just yet.

  43. riggers says:

    From yhe rest of the world…good news!

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