The introduction of Financial Fair Play by Uefa and the Premier League should ensure that Manchester United continues to dominate both domestically and in Europe for years to come.
Financial Fair Play basically means that clubs have to live within their means. That they spend only what they make. So clubs that have the most revenue have a tremendous advantage over those with smaller revenue streams.
And the Premier League club with the biggest revenue stream is Manchester United. United announced today a record third-quarter turnover of £91.7m. To put that number in perspective, in 2011-12 only six clubs in England had annual turnover of over £100m and United have almost equaled that in one quarter!
United raised its 12-month turnover projections to £360m, which will be close to £100m more than any team in the Premier League.
The driving force behind the growth in Man United’s revenue is its commercial division which saw an increase of 31.9% on the corresponding three months last year. United’s commercial revenue is now up to £114.5m over the nine-months.
United executive vice-chairman Ed Woodward said of the earnings:
“Each of our three primary sectors – commercial, broadcasting and matchday – delivered strong top-line gains and helped us achieve a record third quarter for both revenue and adjusted EBITDA [earnings before interest, taxes, depreciation and amortisation].
Even an 25.1% increase in wages due to to the impact of new signings like Robin van Persie and Shinji Kagawa was hardly noticed due to the growth in overall revenue.
What has to worry United’s domestic and European rivals is that United’ commercial numbers are only going to grow. Andy Green has done exhaustive research on United’s finances since the Glazers bought the club.
The club is in the middle of negotiating a new deal with Nike that could be worth another £25-30m a season. United’s shirt sponsorship with GM will be worth £43.5m starting in 2014-15 season.
Add in the new TV deal, and by 2015-16, United could become the first English side to generate over £500m in revenues. At that point, United will be comfortably able to afford wages of £225m a season (up from £160m today). That pretty much gives Fergie license to sign whoever he wants as only Barca, Real Madrid and Bayern will have the money to compete with United.