Saturday, January 27, 2007

Man United expects "dramatic growth" in revenues

English Premier League club Manchester United is predicting "dramatic growth" in their income over the next two years after seeing their profits rise by £20 million to £30.8 million last year. The club's annual report reveals that turnover was £165.4 million in the year ending June 30, 2006, compared to £157.2 million in the previous year, while operating profits were up from £10.8 million to £30.8 million. While confirming the impending appointment of a chief operating officer, CEO David Gill said he is comfortable with the debt levels incurred by the Glazer family for their takeover of the club in 2005, particularly now he can anticipate a massive rise in revenue from the new Premier League TV contract, plus increased sponsorship deals with AIG, Air Asia/Tourism Malaysia, Kumho Tire, Budweiser and Audi.

"This is a very well-structured debt profile and all obligations can be met," he said. According to Martyn Ziegler of PA, the AIG deal is worth £18 million a year, TV money will be around £50 million, the Champions League should see income of around £20 million while the average crowd at Premier League matches this season has been 75,776, bringing in around £2 million in ticket sales for every home match.

The report reveals United paid £1.8 million to agents compared to the £2.6 million the previous year. "The club remains committed to disclosure of the amount it spends on agents' fees and has adopted the Football League's guidelines on this issue," Gill said. "The club fully supports the new agents' regulations which come into effect this summer and will see players being responsible for paying their own agents."

However Gill would like to see players' salaries more variable, where they win rewards if they are winning. "But that is a difficult thing to do in this business. In the City, there are huge City bonuses but the actual base salaries are not huge. We pay very well as it is. All our players are paid very well and very appropriately," he told the Financial Times.

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