Another quarter of fans packing Old Trafford helped Manchester United boost revenue in its third quarter, but higher financing costs pushed the club to a larger net loss for the period.
The English soccer club reported total revenue of £152.8 million ($192.7 million) for its third quarter, ending March 31, Thursday morning. That was up 29% from last year, primarily because the Premier League club was able to sell out its nine homes games; last year, its 74,000-seat venue was empty due to pandemic restrictions. Compared to the same period in 2019, revenue was £700,000 higher.
Despite the increased revenue, Manchester United had a greater net loss for the quarter. The club posted a net loss of £27.7 million ($35.93 million), up 53% from 2020. Net financing costs of £14.1 million ($17.8 million) were much higher than in 2020, contributing to the wider loss. Manchester United has long been criticized for its debt load—the club finished the period with net debt of about $625 million at the end of March, 12% higher than last year. Managing that debt was the culprit, with the club swinging to a big foreign exchange loss on loans taken in dollars, after previously benefitting from forex rates.
Results also were hurt by the Red Devils’ historically poor season, in which it tallied its fewest total points ever in the Premier League. Manchester United closed out this Premier League season in sixth place, its worst finish since a seventh-place showing in 2013-14. The relatively poor play hurt the club because it played five fewer home and away games compared to 2020 from being knocked out of various tournaments earlier.
“It has clearly been a disappointing season for the men’s first team,” CEO Richard Arnold said in the earnings release. “Off the pitch, our revenues have continued to recover from the pandemic, reflecting the enduring strength of our commercial operations, which in turn support our ability to continue to invest in the club.” Management did not hold a question-and-answer call with equity analysts this period.
The team struck an optimistic note for the future, pointing to the hiring of a new manager, Erik ten Hag; the performance of its youth teams, which won various domestic tournaments; and ‘fairplay’ provisions for UEFA teams, which should help level the financial playing field among clubs.
Manchester United is traded on the New York Stock Exchange. After the earning release, shares were trading about 3.5% higher in pre-market activity, at $13.47 a share. Pre-market trading takes place with far less volume than normal trading and isn’t necessarily a reliable indicator of broader market reaction.