(Reuters) – The return to the Champions League came at a price for Manchester United as the associated wages of players detracted from the Premier League football club’s core quarterly revenue.
Soccer Soccer – Premier League – Manchester United v Stoke City – Old Trafford, Manchester, UK – 15th January 2018 General view of a corner flag in Old Trafford before the game Action Images via Reuters / Carl Recine
United, whose leading players include Paul Pogba and David de Gea, are currently runner-up in the English Premier League with 20 teams and will play Sevilla in their last 16 of the Champions League later this month.
“Our solid business model has enabled us to invest in the club’s future with the renewal of Jose Mourinho’s contract as manager and the acquisition of Alexis Sanchez,” said Ed Woodward, executive vice chairman.
Manager Mourinho extended his contract to 2020 last month while Sanchez left Arsenal.
Woodward would not rely on the likely outcome of the new auction for domestic rights to broadcast Premier League games, which are due to be bid on Friday.
Sky and BT currently share the rights to a three-year contract valued at £ 5.14 billion ($ 7.2 billion).
United’s adjusted earnings before interest, taxes, depreciation and amortization declined 1.7 percent to £ 67.8 million in the three months ended December.
Revenue rose 3.8 percent to £ 163.9 million in the second quarter of fiscal 2017/18.
However, salary costs for the quarter rose 9.4 percent to £ 69.9 million as players got more after returning to the Champions League.
The New York Stock Exchange-listed club downplayed the importance of a £ 48.8 million non-cash accounting fee in the aftermath of the US tax reforms.
“There will be no impact on our financial competitiveness or our ability to meet the financial fair play provisions of the indictment,” CFO Cliff Baty told analysts on a conference call.
United is controlled by the American Glazer family and has won the English league title 20 times.
Local rivals Manchester City currently lead the Premier League with a sizeable 13-point advantage over United.
Last season United won the League Cup as well as Europe’s second-rate Europa League competition and secured a place in the cash-rich Champions League for the current season.
Baty said the financial projections for the year were based on reaching the last eight of the Champions League.
“If we do better than the quarter-finals, it will affect our lead,” said Baty. ($ 1 = 0.7148 pounds)
Reporting by Rahul B in Bengaluru; Adaptation by Keith Weir