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Record turnover equals record loss for United

Chief executive David Gill was proud to announce on Friday that Manchester United has become the first English club to crash through the £100million profit barrier “These results show record turnover, record operating profits and exceptional growth in our commercial activities. We will continue to concentrate on generating the resources to invest in the team and the club to keep us at the top of world football.”

Despite that glowing statement however, there was another record that Gill chose not to highlight. It’s the figure which shows that for the year ending June 2010 the club suffered record losses of £83.6million. So what does it all mean? Is United heading down the same sad Liverpool road as many fear or are “The Glazers good for the club” as Sir Alex Ferguson has said on numerous times?

For this economic novice, the answer is frankly “I don’t know” because the whole thing is far more complicated than understanding a simple game of football. The widely contrasting figures once again emphasise how Manchester United remain one of the world’s most attractive sporting organisations while at the same time showing the cost of a hugely controversial takeover by the Glazer family in 2005.

Sir Alex has recently praised the levels of investment the Glazers have poured in, insisting that much of the spending goes unnoticed as it is focused on bringing high quality youth players to the club “They’ve been great owners” he insists “they have supported me every way I’ve asked them. If you look at any time I’ve wanted a player they’ve provided the money, if you look at what we’ve done this season – and people don’t recognise this – we’ve spent over £20m on young players.”

It has to be admitted that my default attitude has always been one that what Ferguson says is good enough for me but there are times when doubts begin to creep in. How long can any club continue to lose £83.6m per year before the quality of their team is seriously eroded? How long can Sir Alex continue to perform miracles at his age and most worrying of all, how much longer is he prepared to stay in the job before deciding that his paramount priority becomes that of  his health?

As much as it must be conceded that no man is bigger than the club, Ferguson has now got such an influence on United that you begin to wonder if even the Glazers might not be finally prepared to relinquish their determined hold on it once Sir Alex decides to call it a day.

Record turnovers such as those announced by Gill this week may well continue at Old Trafford but so could the record losses. The day when Ferguson is no longer there to balance the two on the football field could be the one when the Glazers finally accept that enough is well and truly enough.

Are the Glazers likely to remain at Old Trafford once Ferguson retires?

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No Responses to “Record turnover equals record loss for United”

  1. GAZZARO says:

    SAF is a great manager interms of management, tactical change, and probably creating a young star.

    Glazer’s family is a bad owner in terms of creating an enormous debts for Man.Utd.

    HOWEVER….

    The Glazers are giving SAF a BIG BONUS to SAF (Behind the scene) and allow Martin Ferguson (SAF’s Brother) and the scout to corruption in the transfer market. i.e.

    -Signed Tosic and sold him with less than half of the fee we pay for him 3 years ago.
    -Paid 17 million pounds for player like Anderson which infact he’s not that good.
    -Signed poor and fair quality players (adding only quantity to sit on the bench, but not quality), just to create chances to do a corruption in the transfer market (Obertan, Bebe, Owen, Chicharito, etc.).

    THAT’S WHY SAF KEEP SAYING THAT THE GLAZER’S GOOD FOR THE CLUB….
    which infact deep down in the heart of most of United fans, we knwon it isn’t.

    As Lots of United fans are trust and love SAF so much, the Glazers known that if they get SAF on their side, there will be no problem….

    THAT’S ALL….

  2. Tom Addison says:

    Losses don’t mean a thing, it’s cash that’s king. As long as our net cash inflow is covering our expenses (i.e. mainly the interest payments) then we’re fine. Much of the expenses on United’s profit and loss account consist of non-cash expenses, depreciation of fixed assets and amortisation of players registrations.

    Football clubs shouldn’t be expected to make a profit, only a very priveleged few, such as United and Arsenal, can. That’s where we’re completely different and in such a better state than Liverpool, we have a competent business model. As much as the Glazer’s annoy me with the debt burden they’ve imposed on us, there’s no denying that under them our revenue and operating profit have improved significantly because of the way they’ve substantially improved our commercial revenue.

    And before anyone says it, no, fan ownership is not the solution.

  3. Frank Scicluna says:

    Tom is completely correct when he says that “Losses don’t mean a thing, it’s cash that’s king” AND paper losses mean even less. The very best financial news I can get each year is when my accountant can LEGALLY turn my income into a loss. The less I have to pay the tax man the better I like it.

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