Manchester United net loss hits £ 115 million in 2021-22 – should their fans worry?

MANCHESTER United’s increasingly disgruntled fans will find little solace in the club’s financial results for the 2021-22 season. The club made a pre-tax loss of £ 149 million, resulting in a net loss of £ 115.5 million, the equivalent of around £ 2 million per week. Since 2005 when the club was bought, United have made an overall pre-tax loss of £ 320 million.

In a difficult campaign, United paid record wages to their players and managed to give a dividend of £ 33 million to their shareholders, bringing the total since 2013-14 to £ 155 million. Furthermore, the club incurred interest costs of £ 62.2 million, bringing the total interest paid to almost £ 900 million during the Glazer era. With little success on the field in the past nine seasons, the fans’ patience is wearing more than a little thin.

However, Manchester United’s financial base underlines how powerful the club could be. Their revenues totalled £ 583 million in 2021-22, an 18% increase on 2020-21. Only twice, in 2019 (£627 million) and 2018 (£590 million) has the club’s turnover been higher. But even at that level, the bottom line was impacted by the cost of living crisis, the lack of a money-spinning summer tour in 2021 due to the pandemic, and weakness in the British pound.

Inevitably, the club was always going to see a huge increase in matchday income in 2021-22 and with crowds of close to 73,000 United’s revenues were £ 110.5 million, a 1,456% rise on the previous, covid-impacted season and close to record levels. There are promising signs for 2022-23 in the form of record season ticket sales and the continued positive trajectory around the club’s women’s team, with saw a 55% increase in season tickets.

United’s commercial income totalled £ 257.8 million, an 11% improvement year-on-year, with sponsorship revenues growing by 5.5% and retail operations up by 19.5%. United is clearly a cash cow when it comes to merchandise and memorabilia. They began a new front-of-shirt sponsorship deal in 2021-22 with global technology company TeamViewer, replacing their previous arrangements with Chevrolet. TeamViewer, who are German, was reported to have paid £ 235 million. United’s kit provider is Adidas, who pay £ 75 million per year in a 10-year agreement that runs to 2025. In normal circumstances, United should be benefitting from highest-ever commercial earnings by 2023.

In 2021-22, United’s broadcasting earnings totalled £ 215 million, 15.7% lower than the previous season. By their historic standards, the season was not a successful one and the club seems to be in a constant state of flux. In 2021-22, United played 15 fewer games across all major competitions. Manager Ole Gunnar Solksjaer was sacked and replaced by a caretaker and then the club hired Ralf Rangnick, who was clearly a clumsy fit. They did finish sixth, which meant they qualified for the Europa League, but their Champions League campaign in 2021-22 ended in the round of 16 against Atlético Madrid. There was no real momentum in the domestic cup competitions. United’s TV money could have been significantly higher with more stability and more focus on the pitch. Being out of the Champions League will obviously have an effect on their revenue generating potential in 2022-23.

The club’s operating expenses amounted to £ 692.6 million, a rise of 28.6%.  Within that figure, the wage bill reached £ 384.2 million in 2021-22, which is a record for any Premier League club. The club’s player costs have increased by almost £ 100 million in five years and the wage-to-income ratio is 65% for the second season running. Prior to the pandemic, United’s ratio was a constant 50%. Of the £ 4.8 billion the club has earned in the past nine years, 54% has been paid out in salaries. Net debt increased to £ 514 million and has doubled over the past five years. Amortisation also went up by 22% to £ 151.5 million, the highest level over the past decade.

Of course, having Cristiano Ronaldo back at the club will have skewed the wage bill quite dramatically and, according to football finance guru Kieran Maguire, the average weekly wage per player at Old Trafford is now £ 178,000. Media reports claim United paid £ 12.9 million to sign the Portuguese and his wage bill, over a two-year contract, is thought to be £ 450,000 per week. The initial deal will have cost United £ 60 million, but if the relationship extends to a third year, the cost of Ronaldo could reach £ 90 million. At this stage, that would seem an unlikely outcome.

United continue to be a major player in the transfer market and they made a profit on player sales of £ 21.9 million, a threefold increase on 2020-21. In terms of cash spent, their gross outlay in 2021-22 was £ 126 million and net spend £ 98 million. Only Arsenal and Newcastle had higher net figures in the Premier League. Their biggest purchase was the £ 76.5 million they paid for Borussia Dortmund’s Jadon Sancho, a transaction that has yet to bear much fruit.

Despite their enormous potential – almost 140 million followers across the three main social media channels – Manchester United doesn’t seem to be a happy club. They have made a loss for the past three seasons and despite their enormous wage bill and activity in the market, they are getting a poor return on their investment. While they underachieve, the owners will always come under pressure and be blamed for everything that goes wrong. Since 2013, United have won three trophies, the last two in 2016-17. Compare that to Manchester City’s 12 prizes, Chelsea’s six and Bayern Munich’s 14 in the same timeframe, and the decline is very apparent. United’s net expenditure on players since Sir Alex Ferguson retired has been £ 854 million, just £ 19 million less than Manchester City. United are one of a handful of clubs who spent over a billion between 2013-14 and 2021-22, so nobody can blame their lack of success on a shortage of money. But it obviously hasn’t been spent wisely…

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