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United revenue declines early in 2015

Manchester-United-v-SunderlandManchester United reported a £20m decline in revenue in the first quarter of 2015, as the club’s finances were hit by United’s absence from the Champions League this season.

The decline in revenue was largely expected and United said they remained confident to return growth next season, with potential earnings from Champions League football and a 10-year with Adidas set to boost their finances.

According to figures released on Thursday, United made £95m in the three months to March 31, compared a 17.7% decline from the corresponding period in 2014, although the club’s commercial revenue grew from £42.8m last year to £47.8m and Ed Woodward predicted total revenue for the year will be in the £385m and £395m range.

“We remain confident about the future of our business,” he said.

“Our commercial revenues were up year over year and we are raising EBITDA (earnings before interest, tax, depreciation and amortisation) guidance for fiscal year 2015 from £90-£95m to £103-£110m.”

Broadcasting revenues fell to £21.7m in the first quarter of 2015, compared with the £35.6m for the same period last year as United appeared on a game broadcasted live on TV five less times than last season, while they also played two less home games in the first three months of the year and did not participate in the Champions League.

For the same reasons, matchday revenues slumped 31.3% year-on-year to £25.5m.

Meanwhile, United’s gross debt now stands at £395.4m, slightly higher than last the £350m level it stood at in the first quarter of 2014, as the decline in revenue led the club to post a £2.9m loss in the period, compared with a £11m last year.

Woodward added it was of paramount  importance for the club to be winning trophies next season, as they look set to return to Europe’s premier competition.

“As the season approaches its conclusion, we are pleased with the team’s performance in Louis van Gaal’s first season as manager and are positioned to achieve a top four finish in the Premier League and to return to European football next year,” he said.

“As we look forward to next season, on the playing side we expect to be challenging for trophies in all competitions and on the commercial side we are excited by the numerous opportunities for further growth, including the first year of our 10-year partnership with Adidas.”