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Thursday, May 27, 1999 Published at 12:05 GMT 13:05 UK

Business: The Company File

City's muted salute to United

Manchester United is leading the way off and on the pitch

Manchester United would have been a richer club today if the referee's whistle had blown at the end of the 90 minutes - before its stoppage time goals.

It may seem hard to believe, but in the topsy turvey world of football finance the world's richest club actually ended up worse off in the short term by winning.

The reason is that the bonuses paid out to the victorious players - and coaches - will exceed the extra £400,000 prize money paid to the winners in the final of club football's most prestigious competition.

But before City fans in Manchester begin celebrating, it has to be pointed out that City experts in London's Square Mile are convinced that the long term benefits far outweigh short term loss.

[ image: Manchester United will be able to afford a lot more Dwight Yorkes]
Manchester United will be able to afford a lot more Dwight Yorkes
Although it is all guess work at this stage, increased sales of replica shirts and other merchandise across Europe and the Far East, will add between £5m and £10m to its already overflowing coffers.

Albert E Sharp analyst Tim Richmond explains: "In the short term this is bad news for the club's financial figures.

"The bonuses that they will have to pay out will be higher than the prize money.

"But clearly winning the Champions League is fantastic news for the club in terms of boosting merchandising and establishing them as the leading European football club brand.

"They will no doubt soon have the Champions League winning shirt, the Treble winning short. They are experts at exploiting the potential."

Television cash

Despite the millions now expected to be added to the £88m turnover United achieved in its latest published results, its shares only edged up 3p to 190p in London trading on Thursday morning.

The main reason is that most of the £10m or so Manchester United have made from the Champion's League this season, had already come from just reaching the final.

The vast pot of television cash plus capacity crowds during qualifying matches is expected to double to £20m the value of victory in next season's expanded competition.

But it has been clear for months now that the Old Trafford club would qualify.

Had the win on Wednesday been needed to qualify for this windfall, its shares would have rocketed on Thursday.

Another analyst, Collins Stewart of Stephen Ford, said the club had warned in City briefings earlier this year that if they reached the final, a defeat would actually leave them better off than victory because of bonuses.

And so the general mood among traders, already cautious because of the mauling football stocks have suffered in general, was that the victory would add little extra to short term trading performance.

The shares, at 190p, are a full 50p, or nearly 20%, below the levels at which they were changing hands when BSkyB was bidding for control of the club earlier this year.

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