Manchester United reports first quarter loss

The club has been hit by a decline in broadcasting and match day revenue.

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By :  ,  Financial Analyst

Manchester United has released its first-quarter financial results, and has reported a loss for the first three months of the year.

The football club has been hit by a 39 per cent decline in broadcasting revenue and a 31.3 per cent drop in match day revenue, reports the BBC. This was in part due to a lack of Champions League football and five fewer Premier League matches being televised.

Sponsorship revenue during the period rose 22.1 per cent to £37.5 million. However, retail sales and product licensing fell 9.5 per cent to £7.6 million.

The club has lost £2.9 million this year, compared to a £11 million profit during the same period last year.

In addition, the club's debt burden has increased 12.4 per cent during January to March, bringing the amount owed to £395.4 million.

Positive outlook

Despite the negative results, the Manchester United has also raised its financial guidance for the year. The club predicts to make between £103 million and £110 million in the year to June 2015. The previous forecast had been £90 million to £95 million.

Commercial revenues are up £47.8 million compared to last year, thanks to a number of new deals. The club is also confident the 2015-16 season, due to the first instalment of advertising revenue from Adidas. The team is also expecting to qualify for the Champions League – which will lead to more televised games and match day sales.

"As we look forward to next season, on the playing side we expect to be challenging for trophies in all competitions and on the commercial side, we are excited by the numerous opportunities for further growth, including the first year of our ten-year partnership with Adidas," explained executive vice chairman Ed Woodward.​

Player spending

Player spending in the previous year was £90 million. Manchester United plans to spend more on players next season because there are more contracts that will be up for renewal.

The club expects to spend around £101 million on players in the year to the end of June, Mr Woodward told the BBC.

"There are several players – eight or nine – out of contract next season. A number will be offered new contracts," he said.

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