Arsenal and Manchester United report financial difficulties

premier league football club Arsenal and Manchester United reported further financial difficulties, with the latter recording net debt of £ 455.5million in 2021.

Thrice UEFA Champions League Manchester United winners saw a £ 64.2million year-over-year increase in net debt in its second quarter results, which has been largely attributed to the financial impact of COVID-19 .

A lack of ticket sales caused the club’s revenue to drop 95.5% in the last three months ending December 31, down £ 31.6 year-on-year to 1.5million £.

Meanwhile, trading revenue fell from £ 70.6million to £ 62.6million, including sponsorship revenue, which was down 16.2% from the quarter of the year. previous year to £ 37.8million.

Unlike game income, this was largely attributed to the impact of the club’s extended shirt sponsorship with the US automaker. Chevrolet.

The sponsorship arrangement with Chevrolet has been extended to December 2021, set to expire at the end of the 2020/21 season, after the Red Devils struggled to find a new sponsor.

At the time of Chevrolet’s announcement in October 2020, it was also revealed that the club’s net income had fallen 20% from the previous year, “the impact of deferred sponsorship payments of £ 80million. sterling ‘given as one of the main reasons. .

However, the Executive Vice President, Ed woodward, remained optimistic, calling the easing of UK lockdown restrictions as “the light at the end of the tunnel” for sports organizations.

The American businessman also referred to “three avenues of monetization”: fan engagement, market operations and a partnership with the Alibaba Group – pursued by the team as a way to break into the lucrative Chinese sports market.

In addition, the club’s broadcast revenue has also grown from £ 64.7million over the same period in 2020 to £ 108.7million, largely thanks to the club competing in the Champions League. very profitable instead of the Europa League group stages during the 2020 season / 21 season.

The increase in total turnover from £ 168.4million to £ 172.8million, an increase of 2.6%, is largely attributable to media rights revenue.

Arsenal’s financial situation has also been impacted by its European status. The club have said their exit from the Europa League in the round of 16 in 2020 – compared to the previous year which saw the club appear in the final against their London rivals. Chelsea – contributed to a decrease in broadcast revenues from £ 183.025 million to £ 118.948 million.

The fourteen times England Cup The current champion and silverware holder saw his total income drop from £ 395.559 to £ 344.527million, while matchday earnings fell from £ 96.244million to £ 78.743million.

As with northern rivals Manchester United, these losses can generally be seen as a consequence of the COVID-19 pandemic, particularly the absence of spectators buying tickets.

“The impacts of the pandemic have spanned the 2020-21 season and are continuing. The matches continue to be played without the presence of the fans and as a result the club is operating without one of its main sources of income, ”the club said in a statement.

“Since the end of the year, the Group has refinanced its stadium financing obligations and initiated a series of cost reduction measures. These measures will allow the club to be in a good position to react once the situation begins to improve. “

As with the Red Devils, the Gunners’ financial figures also contain positive conclusions, with trading income dropping from £ 110,875million to £ 142,277million, a likely result of a new kit deal with Adidas and a renewal of its main sponsorship agreement with the holder of the stadium naming rights Emirates.

Further losses were offset by a substantial £ 120million loan acquired through the bank of england‘s COVID Business Funding Mechanism (CCFF), while a 12.5% ​​voluntary salary reduction by the first team players also reduced costs.