Man U £100M operating profit, Overall Loss £80M

Really2

http://www.bbc.co.uk/news/business-11499023

Manchester United has reported an annual pre-tax loss of £79.6m:eek:, hit by interest payments and reduced revenues from the sale of players.

The loss for the 12 months to 30 June compares with a profit of £48m for the year before, when revenues were boosted by the £80m sale of Cristiano Ronaldo.

The club's interest payments on bank debt for the past year totalled £40m.

Manchester United also saw a fall in match-day turnover, but this was offset by its commercial earnings.

Its overall annual turnover increased to £286.4m.

The club's operating profit also rose, reaching £100.8m, compared with £92m a year earlier.

So without massive player sales every year the debt is crippling the Club.

Glad to see Liverpool and The Mancs still competing all be it on bad leveraged buyouts.:)

AD9898_2

Debt is crucifying all parts of society, there has to be a limit, when that limit is reached and we have to 'row back' from it, so the pain begins.

Whether it's house prices, football clubs or just personal finances, there is a limit, and therefore always boom and bust.

datostar

Premier League football operates in a strange financial fantasy world of constant debt and huge incomes.

Really2

datostar wrote: »

Premier League football operates in a strange financial fantasy world of constant debt and huge incomes.

Not sure it can without a sugar daddy now.

The only huge incomes are the players, their income proportional to turnover is madness.

Generali

I think the biggest hit was from 'exceptionals'. Reading between the lines I think that the accountants are assuming that ongoing receipts from players sold previously can't be relied upon (clubs don't normally pay anything like the headline transfer figure on the day of the transfer, they pay in stages). Real Madrid must owe Man Yoo a fortune for example.

Without exceptional items, the figures look ok to me. Operating profit up almost 10% and more than able to cover interest payments. I'd like to see the full financial statement as there is one component missing, being how they are amortising (depreciating???) transfer values for players they have bought and how much that has added to the losses. It's all very well making an operating profit but amortisation is vital to a football club which is paying large transfer fees.

It works thusly. Player is bought for £30,000,000 on a 5 year contract. Initially he is worth £30,000,000 on the balance sheet. After 1 year that falls to £24,000,000, after 2 years by another 1/5th to £18,000,000 until after 5 years his value to the club has been decreased by 5/5ths to £0. I think that is a calculation that is included in profits but not in operating profits. If Man Yoo can't replace their squad like-for-like then they are in an unsustainable position, if they can then they're fine assuming they buy well.

dopester

The Glazer Family's US shopping mall empire doesn't seem to be performing that well either.

Generali

datostar wrote: »

Premier League football operates in a strange financial fantasy world of constant debt and huge incomes.

Most companies run with a constant level of debt. I'm not sure why people think football companies would be any different.

CloudCuckooLand

When/if something unforeseen happens to Sky, the whole Premier League will cease to exist as it is known now.

Then it will be back to playing for pride and sensible wages. Instead of financial wheeler-dealing over kicking a bag of wind about.

Would that be such a bad thing? Would England field a better side, after a couple of years?

lemonjelly

Really2 wrote: »

Not sure it can without a sugar daddy now.

The only huge incomes are the players, their income proportional to turnover is madness.

I think that there are some clubs that are being soundly run, and then there are examples like portsmouth, leeds and so on...

Really2

lemonjelly wrote: »

I think that there are some clubs that are being soundly run, and then there are examples like portsmouth, leeds and so on...

I thought you hated West Brom.

I think most are to be honest, Liverpool are turning a profit (it the holding Co which it the problem, that is why they cant get docked points. The club are not insolvent, just the parent company). It is just how some have done buyouts.
It looks to be a hard thing to fund & compete unless you are funding it yourself.

lemonjelly

Really2 wrote: »

I thought you hated West Brom.

I think most are to be honest, Liverpool are turning a profit (it the holding Co which it the problem, that is why they cant get docked points. The club are not insolvent, just the parent company). It is just how some have done buyouts.
It looks to be a hard thing to fund & compete unless you are funding it yourself.

I do hate them:mad:

I'm not convinced that all clubs are well run, but I do think that it is becoming much more of a trend that clubs are aware of that they need to be responsible for their affairs. It certainly appears to me that the business models of some are significantly more robust than they used to be. It doesn't appear to be all clubs though.

CloudCuckooLand wrote: »

When/if something unforeseen happens to Sky, the whole Premier League will cease to exist as it is known now.

Then it will be back to playing for pride and sensible wages. Instead of financial wheeler-dealing over kicking a bag of wind about.

Would that be such a bad thing? Would England field a better side, after a couple of years?

Thing is, not many learned from the ITVdigital fiasco did they?