Manchester United has abandoned its annual financial targets and posted a drop in quarterly earnings and revenue, as the economic impact of Covid-19 begins to be felt.
The club logged a pre-tax loss of £28.5m (€31.8m/$34.8m) in the three months ended March 31, compared to a £11.1m pre-tax profit a year earlier. Revenues were £123.7m, down 19 per cent on the same quarter last year.
The club has withdrawn guidance that revenues for the financial year would be in the £560m-£580m range, due to “ongoing uncertainty” related to Covid-19.
The 2019-20 Premier League season was halted on March 13 due to the pandemic.
Manchester United’s broadcasting revenue in the quarter was £26m, a decrease of £27.8m, or 51.7 per cent, over the prior year quarter. The fall was due to a rebate due to Premier League broadcasters following delay and broadcast schedule changes to the 2019-20 season, non-participation in the Uefa Champions League, and the impact of playing two fewer Premier League away games.
The Financial Times reported that Manchester United’s chief financial officer Cliff Baty said the club’s costs for the rebate due to Premier League broadcasters for 2019-20 was likely to be £20m in total, of which £15m was reflected in the latest quarterly results.
Matchday revenue fell 8.2 per cent year-on-year to £29.1m, while commercial revenue was up 3 per cent to £68.6m.
As of March 31, the club had £90.3m of cash balances and access to an additional £150m under a revolving credit facility. United said the facility provides financial flexibility to support the club through the disruption caused by Covid-19.
However, net debt now stands at £429m, an increase of £127.4m over the same quarter last year. The club said this was due to a decrease in cash and cash equivalents and adverse movements in the British pound sterling-US dollar exchange rate.
“Operationally, the impact of the pandemic and measures to prevent further spread continues to disrupt businesses in a number of ways,” the club said in a statement.
Old Trafford and its flagship Megastore have been closed to visitors since March 20, and Museum, Stadium Tour and Red Café operations have been closed since March 17.
The club’s executive vice chairman Ed Woodward said, “Our focus remains on the health and well-being of our colleagues, fans and partners around the world and we are extremely proud of how those connected to the club have responded during this crisis.”