Manchester United (NYSE: MANU) witnessed a huge hike in its share price: $13.28 to $14.50 – a 9% rise in the opening minutes on 21st October 2020.
However, their numbers tell a different story. In Q2 results, debt rose and revenues dropped.
Considering the ill-effects of the coronavirus pandemic, it was expected that United would face a huge loss in generating revenues and there would be a growth in debt.
And that seems to be a case so far.
As announced by Manchester United chief executive Ed Woodward, the Mancunian club generated £509m in revenues from the 2019-20 season, which was £118m less than what they recorded throughout the previous campaign.
Other than that, the debt has reportedly soared from £270.5m to £474.1m with a growth ratio of 133 per cent.
While having his say on this matter, Woodward clamied,
“Our focus remains on the health of our colleagues, fans and community while adapting to the significant economic ramifications of the pandemic.
“We are committed to playing a constructive role in helping the wider football pyramid through this period of adversity, while exploring options for making the English game stronger and more sustainable in the long-term.
“This requires strategic vision and leadership from all stakeholders, and we look forward to helping drive forward that process in a timely manner.”
If we take a deep dive into the numbers, we will find that Manchester United have garnered £89.8m from match-day revenue (£21m loss from the last year), £140.2m from broadcasting revenue (£100.1m loss from the last year), £279m from commercial revenue (£4.9m profit from the last year) this term.
The records are the evidence of the fact that how badly this ongoing COVID-19 pandemic has disrupted the club’s finances.
And its impacts are expected to continue until English clubs open the doors of their stadiums for their supporters and football moves back to its normality.
Source: MANU’s conference call and Q2 results