Published On: Sun, Sep 22nd, 2013

Glazer family report record income of $550 million for Manchester United

The rise was driven by a significant increase in sponsorship, merchandising and product income for the club.

Manchester United v Villarreal

Glazer Brothers / Getty

Last year’s football season was a very significant one indeed for Manchester United, with the iconic manager Sir Alex Ferguson eventually announcing his retirement that became effective at the end of the season.

Yet despite a fairly indifferent season on the pitch Glazer must’ve been satisfied to see the “Red Devils” make a profit of around $220 million.

And now United moves into a new era with a new club manager, another Scotsman David Moyes as well as a new executive vice chairman Ed Woodward, who both have some pretty large shoes to fill for the future of the club.

Woodward’s predecessor David Gill has left the club in a very solid shape having signed some significant sponsorship deals during the course of last season that stand to boost United’s commercial revenues by around 30% as they kick in. Among the highlights of United’s sponsorship deals will be that concluded with US carmaker Chevrolet, who will become the club’s shirt sponsor from season 2014/2015.

 

Alex_Ferguson Manchester united

 Sir Alex Ferguson/Wikipedia

Other items in the sponsorship fire include renewing of the club long running contract with sports goods manufacturer Nike over their kit supply. The existing sponsorship deal, which has been running since 2002 and is worth around $500 million, expires at the end of the current season.

Also in the offing is the launch of a new Manchester United digital platform due to be unveiled at the end of 2014 and expected to contribute meaningful income for the club from season 2015-16.

In a recent interview Ed Woodward expressed his satisfaction with the commercial activities at United which continue to prove to be to be a very powerful engine of growth and providing the financial facilities to allow the team to compete in an increasingly competitive environment, both domestically as well as in Europe.

Interestingly commercial revenues now account for more than 40% of United’s total income at $220 million, with television rights for last season amounting to $150 million with ticket sales, at one time the predominant source of income amounting to a mere $160 million, with the remaining $20 million coming from sundry items.

Manchester United’s gross debt stands at around $570 million, down 10.9 per cent on the previous year.

As far as running costs were concerned, the United wage bill continues to be considerable running at you and around $200 million, with the sum including transfer market comings and goings.

The Glazers are looking at continued strong growth in income through sponsorship and commercial activities and are reportedly taking into account that Moyes will need at least one season to exert its influence on the club, and have based their income projections are only reaching as far as the quarter finals of the two domestic cup competitions that they compete in as well as reaching the knockout stages of the considerably more lucrative European Champions League.

While all the management team of United may feel confident in their abilities to retain the English Premier League championship for the season, any finish other than in the top four would be a disaster as it would preclude them from entry into next season’s European Champions League. Even if United succeeds in reaching these relatively moderate targets, projections for season 2013/2014 are for income of around $650 million, with profits of around $250 million after costs.

 

Manchester United v Bayer Leverkusen - UEFA Champions League

Manchester United v Bayer Leverkusen – UEFA Champions League / Getty

With such a positive commercial outlook, the Glazer’s have already begun to investigate the possibilities of making a share sell-off valued around $400m

Responsibilities for running Manchester United are shared by Avram “Avi” Glazer and Joel Glazer. The brothers of them had to run the gauntlet of often had to run the gauntlet of fans who were concerned regarding the vast amount of debt that they had taken on to purchase the club, as well as, at least in the early years their apparent reluctance to reduce the level of debt which was carrying very heavy interest.

Eventually by 2010, the club carried out a £500 million ($750 million) bond issue which proved to be highly successful, significantly reducing the day and the interest payments.

By the end of that same year, the Glazers managed to clear off the remaining high interest bearing loans were stood at around £200 million ( $300 million) placing the club in a much stronger financial position and then putting an end to all dissent from the club’s supporters regarding the Glazer’s and how they handled the club’s financial affairs.

 

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