Manchester United's net debt soars after 42 per cent yearly increase
The impact of coronavirus, no Champions League football and major signings resulted in Manchester United's net debt rising to £429.1million.
Published : May 21, 2020 18:32 IST
Manchester United's net debt has risen to £429.1 million after a 42 per cent year-on-year increase, while it recorded an operating loss of £3.3m in part due to the impact of the coronavirus pandemic.
The 20-time champion of England released its latest financial results on Thursday for the fiscal third quarter, with the impact of a suspended season evident as its net debt increased by £127.4m over the past year alone.
The club blamed the rise in debt on "an overall decrease in cash and cash equivalents and adverse movements in the exchange rate [between the British pound and United States dollar]". The gross debt figure remains unchanged.
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United has also spent close to £190m on the signings of Harry Maguire, Aaron Wan-Bissaka, Daniel James and Bruno Fernandes in the past 12 months, which is said to have impacted debt levels.
Ole Gunnar Solskjaer's side has not played in the top flight since beating rival Manchester City 2-0 at Old Trafford on March 8 and the club's broadcast revenue for up until March 31 has fallen by more than half compared to last year. Three of United's games in that period were postponed, while it has estimated there will be a £15m Premier League rebate to broadcasters.
Competing in Europe's second-tier competition, the Europa League, has also negatively impacted revenue compared to last year, the Red Devils having reached the Champions League quarter-finals in 2018-19.
These factors also contributed to United seeing a 19 per cent year-on-year drop in revenue, down to £123.7m for the quarter.
Although Premier League clubs returned to training in small groups this week, the uncertainty over the COVID-19 pandemic means United has abandoned its initial annual financial targets.
A statement from executive vice-chairman Ed Woodward read: "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.
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"Since the start of the pandemic, Manchester United and our Foundation have provided assistance to hospitals, charities and schools in our communities, as well as support for frontline workers and vulnerable fans.
"These actions reflect our core values as a club and the resilience through adversity that we have demonstrated many times throughout our long history and will do so again to weather these current challenges.
"In that spirit, we look forward to the team safely returning to the pitch and building on the exciting momentum that Ole and the players had previously achieved, while taking all necessary steps to protect public health. Our thoughts remain with all those affected during this unprecedented time."