October 8, 2010: Manchester United’s Record Operating Profit Wiped Out by Interest Payments

Manchester United announces a record operating profit of over £100m for the 2009-2010 football season, but it is more than offset by loans taken on when the club was purchased by the Glazer family. The record profit was helped by increases in commercial, broadcasting, and matchday revenues, the later boosted by increased ticket prices. Nevertheless, the club made a huge overall loss due to interest repayments and one-off costs related to a £509m bond issue. In addition to the bonds, the club also has to service £225m in payment in kind loans, currently bearing interest at 16.25 per cent. The overall result was also harmed by a £40.6m write-down on an interest rate swap that had to be paid when the club launched its bond offer at the beginning of the year, as well as £19m lost on fluctuating exchange rates. [Guardian, 10/8/2010]