Manchester United borrow £60m as net debt rises amid Covid-19 pandemic | Manchester United
Manchester United have confirmed they have accessed a £60m drawdown of their £200m available credit line to cover rising net debt of £455.5m following the coronavirus pandemic . The club also reported a 2.6% growth in total revenue from £168.4m to £172.8m in the last three months of 2020.
The modest rise was attributed to a 68% rise in broadcast revenue to £108.7million, a figure greatly helped by United’s return to the Champions League. “Demand for live football remains strong,” executive vice-chairman Ed Woodward said when announcing the club’s second quarter financial results.
Woodward also reflected on the impact of Covid-19, a “unique level crisis” which “tested the resilience and values of our club”, and discussed the potential return of fans to Old Trafford. “We are seeing positive examples around the world of live events with crowds at reduced capacity with social distancing,” Woodward added.
“The rapid and successful deployment of vaccines and falling infection rates in the UK make us optimistic about the government’s roadmap out of lockdown, including plans to gradually reopen sports stadiums with spectators, from this spring. Initially it will be with capacity limits, but hopefully crowds will return to full capacity next season.
Revenue for the day in the three months to December 31 was £1.5m, down 95.5% year on year from £32.7m due to the fact that all matches were played behind closed doors. Cliff Baty, Manchester United’s chief financial officer, has confirmed the club’s net debt of £455.5m, an increase of £64.3m from the previous year, was the result of the loss of income on game day.
“We are well positioned to overcome the current uncertainty and optimistic for the future,” Baty said. Net debt is calculated as non-current and current borrowings less cash and cash equivalents. The increase resulted in “a £60m draw on our available £200m credit line during the quarter”, Baty confirmed.
United’s revenue fell 7.2% year-on-year to £281.8m, with profit down 6.9% to £33.8m. Total broadcast revenue reached £156.3m, an increase of 60.1% on the same period in 2019. Commercial revenue was down 19.1% year-on-year to 122, £3 million.
The 20-time champions of England exited the Champions League in December and are currently second in the Premier League, but 14 points behind Manchester City with 11 games to play. Although United’s potential title challenge appears to be waning, Woodward has taken an optimistic approach to the club’s competitive health at all levels.
“The progress made by Ole [Gunnar Solskjær] and the players this season are clear, and our thriving academy and women’s team also adds to the optimism we feel for the future on and off the pitch,” he said.