United can't rest on profits, warns financial report

Manchester United cannot afford to rest on their laurels despite their seemingly unassailable financial position, the club was warned today.

Figures released by Deloitte’s sports business group today confirmed United’s dominance off the field – they recorded a turnover of almost £175m (€263m) in 2002-03, the latest period for which details are available.

The club enjoyed a pre-tax profit of more than £39m (€58m), almost £35m (€52m) ahead of closest rivals Arsenal.

However, while the Old Trafford club continues to thrive financially, business group member Paul Rawnsley has warned that they can take nothing for granted.

“In terms of revenue generation, it is still possible to catch them,” he said. “They are commercially more advanced than most other clubs and they can claim a support-base of 50 million around the world.

“Other clubs like Chelsea still have a long way to go to catch up to them, and success on the pitch is a huge factor in the whole equation.

“But we have seen in the past how particular teams have dominated for a decade from time to time and then been caught.

“It takes something for a club to be dominant for a number of years and still be in the same position in 10 years’ time – Liverpool are a case in point.”

The report paints a relatively healthy picture of financial stability for the Premiership’s clubs, although the figures illustrate graphically the penalties for failure.

The three relegated clubs last season – Leeds, Wolves and Leicester – can expect revenue to fall by around £13m (€20m) while West Ham’s play-off final defeat by Crystal Palace could cost them up to £35m (€52m).

Clubs generally tightened their belts in 2002-03 as wages increased by only 8%, as opposed to an annual average over the previous 10 years of 25%, while transfer spending was slashed by a massive 42%.

The contrasting fortunes of the likes of West Brom and Sunderland, who both slipped out of the top flight at the end of that campaign, also provide a model for those clubs seeking to establish themselves in the division.

Sunderland’s demise has been well-documented, but they acted quickly to prevent the kind of financial meltdown which has hit Leeds, while the Baggies decided not to throw money at the battle to stay in the Premiership after their promotion two summers ago.

“Sunderland took corrective action very early on and their last interim results made very interesting reading,” said Mr Rawnsley.

“They have tackled the reality of football finances and a lot of Premier League clubs may have to go down the same road so that they are able to cope with relegation if it comes along.

“They have had to restructure their cost-base and have done it by offering short-term contracts to players and through loan deals and different wage levels for the Premiership and the Football League.

“West Brom have come back a stronger club than they were the last time they were promoted because they didn’t spend heavily the first time.

“In that situation, a club can invest some of the money in the longer term in facilities and the training ground rather than pay a lot of money to fancy-name foreign players who will just go down as a name in the history books.”