Man Utd revenues warning
Wed 31st Mar 2010 | Money & Finance
It’s reported that financial advisers of Manchester United expect the club to miss out on at least £24m in cumulative match-day revenues over the next two years according to the Guardian newspaper.
JP Morgan's analysis of the club's financial position, set out in a research document released last Friday, shows United's 2009 match-day income of £109m to be a high-water mark. Even in its supposed "upside scenario", in which the club progresses to the Champions League quarter-final or beyond in both years, it anticipates a drop to £98m this season and to £96m next. And the recovery from that base will be weak: to £101m the following year.
Manchester United's own budgets are said to predict an even bigger two-year fall of £29m, with much of the collapse attributed to the difficulties in selling executive boxes. The document states: "Most of the impact from the economic slowdown was felt in the executive hospitality business, which we would argue is a highly discretionary expense."
Yet JP Morgan concedes that even those estimates could prove optimistic at a time when the Manchester United Supporters Trust has been increasing its attack on the Glazer family's ownership of the club. It adds: "We note that the coming two quarters will be important to gauge demand for 2010-11 season tickets and executive hospitality seating in light of the negative MUST PR campaign." This is one of the "external risks" JP Morgan cites, adding: "It would place significant strain on the company's limited free cash-flow generation."
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