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Peter Kenyon, Chief Executive Manchester United
"We are well positioned for the future"
 real 56k

Monday, 2 April, 2001, 16:52 GMT 17:52 UK
Manchester United's profits soar
Manchester United manager Sir Alex Ferguson
Manager Sir Alex Ferguson has seen the money roll in
The world's most valuable football club, Manchester United, has restaked its claim to top position in the sport's wealth league by reporting profits up 42%.

The club, which claims 50 million fans worldwide and is on the verge of its third successive English Premier League title, has reported record pre-tax profits of 17.3m for the first six months of the season.

Brooklyn and Victoria Beckham
Devoted fans: capacity gates boosted earnings
The profits surge, which sent Manchester United shares up almost 10%, was largely the result of gate receipts up almost one third to 28.4m.

All 17 games played at the club's expanded Old Trafford ground, which can accommodate 67,700 fans compared with 57,700 last season, have sold out.

Manchester United was in December rated the world's richest club, for the third year running, in the benchmark Deloitte & Touche/4-4-2 survey.

'Fund our position'

The club credited partnerships with firms such as Nike, which has signed a 303m sponsorship and merchandising deal with the club, as a model for securing future success on and off the pitch.

Results snapshot - Manchester United
Turnover: 72.0m (+12%)
Pre-tax profit: 17.3m (+42%)
Gate receipts: 28.4m (+33%)
Sponsorship income: 11.1m (+26%)
TV income: 15.1m (-3%)
Staff costs: 24.4m (+9%)

Data: six months to 31 Jan

"The benefit of these arrangements is that they allow us to fund our leadership position in our core activity of football while ensuring that we retain control of the Manchester United brand," chairman Sir Roland Smith said.

Deals with Vodafone and Platinum Sponsors boosted sponsorship income by 2.3m to 11.1m, while United in February revealed plans to raise its North American profile through a marketing alliance signed with the New York Yankees baseball club.

Manchester United also revealed plans to expand its presence in the lucrative financial services market.

Through deals with MBNA International Bank and Britannia Building Society, the club already provides branded savings accounts and credit card facilities.

"We are currently engaged in a process to extend the range of products offered to our fans," Sir Roland said.

Wage costs

But the results also revealed a 1.9m rise in players' wages, and the club acknowledged that it is in negotiation with several stars over new contracts to keep them at Old Trafford.

Andy Cole, Manchester United and England striker
Andy Cole: signed new contract
Peter Kenyon, chief executive, told the BBC that one of Manchester United's major strengths had been its ability to keep costs down.

"I am comfortable we have a structure in place which will manage costs going forward," he said.

The framework had already helped the club negotiate new contracts with defender Jaap Stam and striker Andy Cole.

And the injection of 8.6m into upgrading the club's Carrington training complex demonstrates a commitment to developing home-grown talent, Mr Kenyon said.

"We have always... developed our own youth. We are fully committed to developing the next generation of players."

Restructuring

Manchester United's overall profits on merchandising fell by more than 1m over the six months after the club spent just under 700,000 on restructuring the business.

A further 2m will be spent on the merchandising shake-up.

Sir Roland expressed optimism for the future, given that the club has reached the quarter finals of the European Champions Cup.

The club's revenue rose to 72m, up 13% on the same period a year before.

Shares surge

On London's stock market, Manchester United proved the best performer of the top 350 listed companies.

Shares in the club closed up 17p, or 9.9%, at 189p on Monday.

But the stock still stands well below a closing high of 412.5p reached on 23 March last year.

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See also:

07 Feb 01 | Football
Football's growing divide
07 Feb 01 | SOL
Man Utd's American dream
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