Any doubt as to how Manchester United could afford their summer spending spree with Financial Fair Play ended today when the club announced record revenues of £433.2m and profits of £23.8m for last season.
The engine behind United’s license to print money is its commercial side of the club, as sponsorship revenue increased by 49% and commercial revenue soared nearly a quarter to £189.3m. Commercial revenues account for almost half of United’s total turnover, which is why getting United back in the Champions League this season will be Louis Van Gaal top priority.
United’s numbers are not all rosy though.Failure to qualify for the Champions League this season will cost United about £53m, dropping their expected revenues to between £385m-£395m this season.
The club announced that it cost them £5.2m to end the David Moyes era. More worrying though was the news that United’s wage bill rose 19% to £214.8m, an increase of £34.3m,
‘primarily due to the impact of player acquisitions and renegotiated player contracts’
, according to the annual report.
This is the first time United’s wage bill has broken the £200m barrier and they are only the second club after Man City to exceed it. This is before the summer acquisitions of Angel di Maria and Radamel Falcao have their impact.
United have traditionally spent less than 50% of their revenues on wages, and they just managed it last year at 49.6% of turnover. But with the signings of Di Maria and Falca, plus lower revenue, United’s wage bill could eat up as much as 65% of turnover this season, a worrying number if United don’t finish in the top four again.
Executive vice-chairman Ed Woodward said:
‘We are very proud of the results achieved in fiscal year 2014 as we once again generated record revenues driven by our commercial and broadcasting businesses which delivered impressive year-over-year growth.
‘We also recently announced a record-breaking deal with Adidas and very much look forward to launching this partnership next summer.
‘With Louis van Gaal at the helm as manager, and the recent signing of some of the world’s leading players to further strengthen our squad, we are very excited about the future and believe it’s the start of a new chaper in the club’s history.
‘Louis’ footballing philosophy fits very well with Manchester United and he has an impressive track record of success throughout his career, winning league titles with every club he has managed.’