Manchester United are facing “one of the most extraordinary and testing periods” in the club’s long history, executive vice-chairman Ed Woodward has warned, as he counted the cost of the coronavirus crisis.
The club’s third-quarter financial results this week showed current net debt stands at £429.1 million (US$526 million) – a 42.2 percent increase on the prior year quarter.
The steep increase is partly a result of foreign exchange costs and big-money transfer fees for players including new skipper Harry Maguire and Portuguese midfielder Bruno Fernandes, but also comes as football grapples with the financial fallout from the coronavirus pandemic.
According to United’s chief financial officer Cliff Baty, the club has lost an initial £28 million directly due to the crisis, with that set to rise substantially in the coming months.
That was a fact alluded to by United executive Woodward when addressing investors on Thursday.
“It is undoubtedly one of the most extraordinary and testing periods in the 142-year history of Manchester United,” Woodward said.
“This club is built on resilience in the face of adversity and those qualities are being proven once again now.
“We remain firmly optimistic about the long-term prospects for the club and for our exciting, young team,” he added.
Clubs across Europe are firmly feeling the pinch after the decimation wrought by the Covid-19 pandemic, which caused the suspension of seasons and subsequent losses in broadcasting incomes and gate receipts.
Lucrative pre-season tours – of which United are typically keen proponents – are also likely to be scrapped.
The Old Trafford club said they lost an additional £8 million in the final three weeks of March alone, while they are set to return £20 million in TV revenue even if the Premier League season is completed.
United players returned to group training for the first time this week as the Premier League gears up for a potential June return under its ‘Project Restart’ plans.
Meanwhile, all eyes have been on Germany in recent days after the country’s top two tiers – Bundesliga 1 and 2 – relaunched matches behind closed doors.
Woodward said that was a clear sign of the shape of football in the months to come.
“As in Germany and elsewhere, it is now inevitable that our matches will initially be played behind closed doors when the season resumes,” he said.
“[These results] reflect a partial impact that the pandemic has had on the club, while the greater impact will be in the current quarter and likely beyond.
“There are still profound challenges ahead, and for football as a whole, and it is safe to say it will not be ‘business as usual’ for some time.”
United – who are owned by US billionaires the Glazer family – have not been among the clubs to ask players to take a pay cut or deferrals.
Manager Ole Gunnar Solskjaer will also reportedly have immediate access to reserves of around £90 million for the next transfer window – with a potential £150 million on top of that.
“Our club is built on a solid foundation,” Woodward said
“We must recognize that this crisis will not disappear overnight and that the world which emerges will be different from how it was before. That will create challenges for football, like many other industries.”
If and when play does resume in the Premier League, United will find themselves fifth in the table – three points off Chelsea and the Champions League spots. They are also still in the FA Cup and Europa League.
