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Manchester United losing money while making money – SportsUntapped.com
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Added October 10th, 2010 by Steve

Manchester United losing money while making money
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The world’s richest and arguably most famous football club, Manchester United, has been busy making money and losing money at the same time, according to the club’s financial reports for the period ending June of 2010.

The English Premier League club announced on Oct. 9th that it suffered huge losses even though it had an operating profit, because of the interest it has to pay on its loans. The football giants announced an overall loss for the 2010 financial year as 83.64 million pounds.

However, there was some good news as United has now become the first English team to rake in over 100 million pounds in operating profits. There was an increase in operating profit of 9.4 per cent over the previous year and the final total came in and 100.8 million pounds. Most of this was the result of increased broadcasting and commercial revenue. But this figure doesn’t include the team’s debts of about 40 million pounds of interest payments, which is believed to be at 16.25 per cent.

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United’s turnover reached a record figure of 286.4 million pounds, while holding company Red Football Ltd’s total debt rose to 521.7 million pounds. The club is owned by American sports business man Malcolm Glazer and family as they purchased the club in for 790 million pounds back in 2005, however, a lot of that money was borrowed by Glazer.

The report also showed the club’s game-day turnover was 100.2 million pounds, a drop of 7.9 per cent, but claimed it was due to a fewer amount of games played. The club’s media revenues were 104.8 million pounds; an increase of 5.1 per cent, and its commercial turnover rose 16.5 per cent and hit 81.4 million pounds, while wages were 131.7 million pounds, a jump of seven per cent.

The team’s overall revenues of 286.4 million pounds more than doubles that of cross-town rivals Manchester City, who were happy with their total of 125 million pounds when the club announced it last week. United raked in a ton of money when Cristiano Ronaldo was sold to Real Madrid for about 80 million pounds, but didn’t make much else on the sale of players after that.

The loss of money will probably give more ammunition to United supporters who have been opposed to the Glazers as club owners and will likely result in them claiming the losses are taking away from money that could be used for transfers. However, manager Alex Ferguson stated the lack of activity in the transfer market is due to the fact there’s been little of value in it lately.

 
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