Manchester United revenues record slump due to Champions League absence

Manchester United have reported revenues fell by 8.8% last season to £395.2m

Manchester United are finally feeling the repercussions of a year away from the UEFA Champions League. The full cost of their absence from the Champions League has been revealed, with the club reporting revenues were down last season by £38m to £395.2m, BBC reported.

United published their annual accounts on Thursday, and it revealed the full extent of their failure to qualify for European club football's premier competition during the 2013/14 season. The short- lived era of David Moyes that saw the Red Devils finish a dismal seventh-place in the Premier League saw them miss out on the European competition for the first time since 1989.

The club had announced a turnover of £433m for the year ending in June 2014, but it also included a word of caution in the form of an advisory notice when confirming their third-quarter results last May that the final figure for the 2014-15 season would be down on the previous year's amount.

Consequently, for the year ending May 31, total revenues were £395.2m, down by 8.8% from £433.2m. A bulk of this was due to loss in matchday revenues for the year, that fell by 16% to £90.6m, and broadcasting income to drop by a fifth to £107.7m, a decrease of £28.1m.

The Red Devils are back in the Champions league after a season away from European action

On a brighter note for United though, sponsorship income hit record levels, up by 14.1% to £154.9m. Further, the absence from the Champions league meant that the players were not entitled to any bonuses inserted into their contracts in relation to progression in the competition. This softened the blow of the loss by cutting down on the wage bill and staff costs by £12m, a decrease of 5.5% from the previous year.

United also announced a record 14.1 per cent increase in sponsorship revenue, reaching £154.9m. Also for the first time since the IPO in 2012 they will paying a dividend to shareholders. Shareholders will get 4.5 cents per share. United, owned by the US-based Glazer family, also announced they will raise another $400m by selling new shares on the New York stock exchange. The move was announced in a filing to the US Securities and Exchange Commission saying the club will make 24m Class A shares available.

The club have also moved on from previous sponsors Nike, signing a record-breaking 10 year deal with their primary competitor, sportswear-giant Adidas in July 2014, worth at least £750m, and as the partnership only began this August, and the figures relating to this particular deal have not been included in the latest financial accounts.

Despite the inconsistency on the pitch, the club is bullish about the forthcoming year, saying they expect revenues to be between £500m and £510m, which if achieved would make them the first English club to break the half-a-billion-pounds mark in income this season.

Ed Woodward is optimistic about United’s prospects both on and off the pitch

"As we look to the new season, we are enthusiastic about our strong position, both on and off the pitch," said Ed Woodward, club executive vice-chairman.

"In recent weeks we have further strengthened our squad with an exciting mix of experience and youth, qualified for the group stage of the UEFA Champions League, and seen an impressive launch of our partnership with Adidas."

Coming off the end of a second trophy-less season, United currently sit third in the Premier League and are in the group stages of the Champions League after finishing 4th last season and clearing the play-offs, but they have lost their opening game last Tuesday to PSV. United and Louis Van Gaal are now all too aware of the consequences, and failure is no longer an option.

A genuine tilt for the Premier League title, and a lengthy run in the European competition, is imperative, and is a necessity for a club of United’s magnitude and stature to sustain itself.