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United better able to meet financial challenges

Manchester United have announced financial results for the first half of 2023/24, incorporating the first six months of the season which cover July to December 2023, in other words before Sir Jim Ratcliffe’s purchase of a minority stake. Manchester United’s pre-tax loss narrowed from £25m to just £6m, as revenue increased by £72m (23%) from £311m to a first half record of £383m and profit on player sales more than doubled from £14m to £30m.   However, this was accompanied by operating expenses rising £52m (16%) to £383m, while net interest payable also increased by £16m (85%) from £19m to £35m. The revenue growth was driven by the return to the Champions League, which drove large increases in both broadcasting, up £52m (55%) from £94m to £146m, and match day, up £24m (47%) from £51m to £75m.   This was partially offset by lower commercial, which fell £4m (2%) from £166m to £162m. The impact of interest payable on United’s accounts is striking, amounting to £35m in the first half,
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Forest likely to appeal against points penalty

For the second time this Premier League season, a points deduction for breaching its profit and sustainability rules (PSR) has dragged a club down the table and into the relegation zone. First it was Everton, whose initial 10-point penalty last November was recently reduced to six on appeal, and now it is Nottingham Forest. A four-point deduction, confirmed by the Premier League on Monday has pushed Nuno Espirito Santo’s side from 17th to 18th, suddenly a point adrift of safety. This is what a Premier League commission called a “significant” breach of PSR. Forest were allowed permissible losses of £61million ($77.6m) as a promoted club in 2022-23 but were found to have exceeded that threshold for a three-year period by the very precise sum of £34,536,000. Forest have never contested the breach, either at the point of charge or during a two-day hearing held this month in London, but always maintained that the “uniqueness” of their situation warranted leniency. They said they were

Champions League penalty for United

Manchester United will be hit with a £10 million penalty every time they fail to qualify for the Champions League under the terms of their new £90 million-a-year kit deal with Adidas. The clause will come into force from next year and is a change to the existing deal, whereby United were only penalised if they did not qualify for the competition for two seasons in a row. The original ten-year deal, worth £750 million, expires in 2025. The new one runs until 2035 and the details were included in United’s half-yearly financial accounts, released this week. Bonuses up to a maximum of £4.4 million a year will be paid should either United’s men’s or women’s team win “the Premier League or Women’s Super League respectively, FA Cup or continental competitions”. The original penalty clause was never invoked, as United never missed out on the Champions League for two consecutive seasons, but had they done so it would have prompted a 30 per cent deduction, worth about £22 million. The ha

Fate of Forest in balamce

Nottingham Forest are expecting to discover their profit and sustainability (PSR) fate on Monday.  A hearing to decide on what punishment the club will face for breaching PSR regulations was held last week, on Thursday and Friday. It remains unclear exactly what punishment Forest will receive for the breaches — which came during their first season back in the top flight, in 2022-23 — but they will have until April 15 to decide whether they wish to appeal the verdict reached by a three-person independent panel. The six-point deduction Everton have received (reduced from 10 points on appeal) for similar breaches is regarded by some as a potential bellwether for what Forest can expect — but nobody knows for certain what will happen. If they do appeal, the backstop for that process to be completed would be May 24, five days after the end of the Premier League season. Everton are also still facing a second round of charges, stemming from breaches during the 2022-23 campaign. There is

Why United may have to take on new debt

Building a new stadium is expensive. That is a key factor behind the Glazer family’s decision to sell a 25 per cent stake in Manchester United to Sir Jim Ratcliffe — the British billionaire and founder of petrochemicals giant INEOS — in February after a year-long negotiation. The cost to rebuild Old Trafford has been estimated at £2billion ($2.5bn) and a task force has been created by the club to discuss, among other things, where that money is going to come from. More debt being added to the club to fund a new stadium or the redevelopment of Old Trafford is a viable option and one that decision-makers will seriously consider. It is still a good stadium but it has needed significant investment for two decades and has fallen behind other Premier League venues in terms of modernity. The roof is leaky, the chicken isn’t cooked properly and a club of United’s size and stature should have a state-of-the-art home. The cost of building a new Old Trafford has been estimated at £2bn — a

Why Liverpool have to follow the multi club model

Amid the fanfare of Michael Edwards’ appointment as Fenway Sports Group’s (FSG) chief executive of football on Tuesday was an acceptance that Liverpool need to change.  A new era without Jurgen Klopp will now be crafted by Edwards, Liverpool’s former sporting director, and included in the plans are the ambitions to invest in a partner club. The multi-club ownership model is coming to Anfield, with Edwards believing Liverpool have little choice but to expand if they are to “remain competitive” in the Premier League and beyond. It is a clear shift in strategy for Liverpool, a club that has so far gone it alone in contrast to many of their big rivals.    Well over half of the 20 English top-flight clubs now have relationships with at least one other European club and the pattern has been extended in the past 12 months. It has long been mooted that FSG was open to buying another football club to run alongside Liverpool. There were links to as many as four Brazilian clubs – Cruzeiro,

Italian finance police raid AC Milan

Italy’s finance police raided the headquarters of Serie A football club AC Milan on Tuesday as part of an investigation into potential irregularities over its 2022 sale by US hedge fund Elliott Management to private equity group RedBird. Prosecutors launched their probe following allegations that Elliott still controls AC Milan despite the sale to RedBird, according to a search warrant seen by the Financial Times that authorised the raids at the Casa Milan complex in the city’s district of Portello. The search warrant alleges the club’s current chief executive Giorgio Furlani and his predecessor Ivan Gazidis fraudulently concealed information that should have been communicated to the Italian football federation concerning the ownership structure of the club. “It seems that the majority of the funds used to buy the club originate from an investment vehicle that does not belong to RedBird. The suspicion is that Elliott currently maintains effective control of the company,” according