Manchester United parent reports £109m loss
The parent company of Manchester United, Red Football Ventures, has reported a loss of £109m for its last financial year.
The record pre-tax deficit posted for the year ended 31 June reverses the £21m profit made in the previous financial year, when income was boosted by the £80m sale of Cristiano Ronaldo to Real Madrid.
The company, which was setup by US owners the Glazer family, was hit by a £64.7m one-off cost related to the setting up of a bond scheme to replace bank loans and the £30.2m in interest accrued on £220m Payment in Kind (PIK) loans.
The PIK loans were paid in-full by the Glazers in November though questions remain about where the money came from, with some reports suggesting that other loans could have been refinanced to pay the PIKs.
The loss posted by Red Football Ventures was also wider than the £80m deficit posted in October by the club’s immediate holding company, Red Football Limited for the same period. The difference is thought to be related to additional PIK loan interest accrued.
Despite the deficit, commercial revenue continues to increase. Deals with shirt sponsor Aon and backers such as Nike, Turkish Airlines and Telekom Malaysia helped boost commercial income by 16.5% to £81.4m in the period, according to the results posted in October.
