Manchester United has paid for its comparatively poor season on-the-pitch in 2011-12 after reporting a 3.3% fall in revenues to £320.3 million for the year ending June 30, reports SportBusiness. On Tuesday United stated that its net profits increased by 79.2% to £23.3 million, although this figure was inflated by a £28 million tax credit. While United's annual financial results reported a significant increase in commercial revenues, these were reversed by reductions in broadcast and match day revenues during a season in which the club failed to advance to the knockout stages of the UEFA Champions League.
Commercial revenue for the year increased 13.7% to £117.6 million driven by the addition of several new global and regional sponsorships including the training kit deal signed with DHL, an increase in profit share through its kit partnership with Nike and a 20.3% increase in new media and mobile revenue to £20.7 million.
However, broadcast revenues for the year decreased 11.3% to £104 million primarily as a result of the club's Champions League failings.
Match day revenues for the year decreased 10.9% to £98.7 million as a result of having played four fewer home games compared with the prior season when United also received a share of the gate receipts from the Champions League final and FA Cup semi-final.
The club's borrowings under the Glazer regime, which have been of ongoing concern for fans as well as investors, fell during the year from £459 million to £437 million.
Based on the assumption that it will reach the quarter-finals of the Champions League and domestic cups, United estimated that it expects revenues of £350-360 million for the current financial year with adjusted EBITDA to be £107-110 million, compared to this year's figure of £91.6 million.
Tuesday's financial results mark the first released since United launched its initial public offering (IPO) on the New York Stock Exchange last month. The club stated that the IPO has so far raised net primary proceeds of approximately £68 million, which have been used to reduce "senior secured notes".
Commenting on the 2011-12 financial results, United's executive vice-chairman Ed Woodward said: "Fiscal 2012 was the best year ever for Manchester United's commercial business. Our world-record $559 million shirt sponsorship deal with Chevrolet and the Premier League's new £1 billion a year UK television rights deal (a 70% increase) highlight the outstanding growth prospects for the future.
"We also expect a substantial increase in the value of the Premier League's international television contracts scheduled to be announced later this year. We also opened a new commercial sales office in Hong Kong (our first outside the UK) to better position ourselves for growth in a region that represents 325 million of our 659 million followers."
