Stop me if you heard this before, but Manchester United have posted yet another terrible fiscal year. Its truly remarkable how Manchester United have managed to escape filing for chapter 11 bankruptcy for all of these years. Manchester United posted a press release for their 6K, a SEC filing for foreign companies registered on the New York Stock Exchange. A lot of these words may mean nothing to the average fan, but luckily you have me. My name often appears next to the great financiers of the world such as Ivan Boesky, Dick Fuld, and Bernie Madoff. Have no fear, JR is here to break down the latest 6K and the basic financial statements as of June 30, 2022.
Income Statement
The top and bottom line. Perhaps the two most important numbers to any company. Are you able to earn money, and are you able to keep some for yourself after expenses? The answer is no. Manchester United had revenues of 583 million GPB, yet somehow have managed to have a net LOSS of 115,500,000 GPB. What the shit, Richard Arnold? Man United‘s wage bill is out of control, at 384 million GPB for the year! Payoffs to failed managers and overpaying talent to attract them to the club is a problem that has plagued United for almost a decade at this point. There can only be hope for the future, but my god this business style has hamstrung operational agility.
Balance Sheet
The Balance sheet is horrendous. The capital structure is tapped out. The liabilities are immense. The Cash is nonexistent. At a deeper dive, debt grew from 419.5 million GPB to 514.9 million GPB. Now before you go crazy, there are two factors that caused this increase. United drew down 40 million GPB on a credit facility. We’ll come back to this later. Secondly, the difference is largely made up of exchange rate sensitivity. It’s no shock that the world is going through an inflation crisis so I’ll give them a pass. I haven’t looked at my Fidelity account in months. Pro tip: It’s not a loss if you don’t sell.
Regardless, the Cash on hand is roughly 1/5 of the long term debt and that should tell you only one thing. Removing debt and increasing asset value is not a priority to the executive team. United have seemingly designed themselves to run paycheck to paycheck, and pay for expenses on their credit card. Its reckless behavior.
Cash Flows
Perhaps the most damning financial statement from the club. It confirms exactly what you know. The Glazers are perhaps the most greedy owners in the game. The club generated 96 million GPB from just operating, and paid 85 million in transfer fees. Not terrible, but not great. What is the most damning aspect of United cash flow’s you may ask? It is in the investing section. United drew down 40 million GPB from a credit facility. Remember from before? Surely it was used for a good reason, right? WRONG! Of that 40 million borrowed, 34 million was paid in dividends to shareholders. Wait, WHAT?!
Yea, Manchester United borrowed money, and used it to pay their owners. In what sick twisted world is that allowable? That is utterly unconscionable. How can you justify borrowing more money to pay the owners when there is literally 500 MILLION of debt already owed??? The Glazer’s suck. They were always terrible, but this is just not how you should run a football club. Get them out of Manchester United and their hands away from their personal piggy bank. Disgusting behavior. Becoming a public company was the dumbest idea the Glazer’s had. We see EVERYTHING. Now, yous cant leave.
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