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Football: Manchester United net debt rises by 133% to £474.1million

Manchester United recently announced its revenue for the fiscal year of 2019/20 ending in June 2020.

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Football: Manchester United net debt rises by 133% to £474.1million

English top-flight club, Manchester United, recently announced its revenue for the fiscal year of 2019/20 ending in June 2020. The club’s net debt increased by 133% to £474.1million from £270.5million. However, due to the economic uncertainty caused by the pandemic amidst fears of a second wave of COVID-19, the club has refused to issue revenue guidance for the 2020/21 financial year.

READ: Football: Lyon lost €36.5 million in the 2019/20 financial year

READ: Barcelona overtakes Real Madrid on biggest earners’ list 

READ: EPL clubs to be fined £37 million each over suspension of matches

This is according to KPMG Football Benchmark Club Finance and Operations Tool and club’s press release.

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READ: Football: AC Milan announces loss of €195million

What you should know

  • Manchester United’s net debt has increased in the fiscal year of 2019/20 to £474.1million, an increase of 133% compared to £270.5million in the previous year.
  • The club posted a cumulative revenue of £509million for the 2019/20 fiscal year which ended in June 2020 and also represents a nosedive of 18.8% compared to revenue of £627.1million in the 2018/19 fiscal year. This is also the lowest figure the club has recorded since the 2014/15 fiscal year.
  • Broadcasting revenue decreased from £241.2million to £140.2million, a drop of 42%. This was primarily attributed to an estimated £15.0m Premier League rebate due to broadcasters, broadcast schedule changes to the 2019/20 football season, non-participation in the UEFA Champions League, and the impact of playing two fewer Premier League away games.
  • Due to the impact of postponement of the Round of 16 Europa League home match and closure of non-match day operations in mid-March which saw Old Trafford shut down, matchday revenue decreased to £89.8million, a drop of 19%.
  • However, despite the losses, United’s commercial revenues remained resilient, posting an increase of 1.4% to £279m in the previous year.

READ: Roma on the verge of signing new deal with New Balance after premature termination with Nike

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READ: Chelsea FC posts N46.42 billion loss in 2019

READ: U.S. budget suffers a deficit of $3.1 trillion in 2020, as pandemic slams the economy

Manchester United’s Executive Vice-Chairman Ed Woodward said, “Our focus remains on protecting the health of our colleagues, fans, and community while adapting to the significant economic ramifications of the pandemic.

“Within that context, our top priority is to get fans back into the stadium safely and as soon as possible.”

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CAF President banned for 5 years for breaching FIFA Code of Ethics

CAF President has been sanctioned with a 5 years ban after being found guilty of breaching FIFA Code of Ethics.

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Mr. Ahmad Ahmad, the President of Confederation of African Football (CAF), African’s football governing body, has been sanctioned with a 5 years ban from all “football-related activities (administrative, sports or any other) at both national and international level” after being found guilty of breaching FIFA Code of Ethics by the adjudicatory chamber of the independent Ethics Committee.

The 60-year-old Malagasy assumed office as the President of the Confederation of African Football (CAF) on 16th March, 2017.

His position also makes him a FIFA Vice President. Since his assumption of office, his four-year term has been clouded with allegations of financial wrongdoing and misconduct.

Mr. Ahmad was found guilty by the adjudicatory chamber of the independent Ethics Committee of having breached art. 15 (Duty of loyalty), art. 20 (Offering and accepting gifts or other benefits), and art. 25 (Abuse of position) of the 2020 edition of the FIFA Code of Ethics, as well as art. 28 (Misappropriation of funds) of the 2018 edition. In addition, a fine in the amount of CHF 200,000 (#83,754,093.14) was imposed on him.

However, Ahmad can appeal his sanction at the Court of Arbitration for Sport (CAS) once he has received the full grounds for the decision, a process that can take up to 60 days.

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Fifa released the following statement on the matter today:

The adjudicatory chamber of the independent Ethics Committee has found Ahmad Ahmad, the President of the Confederation of African Football (CAF) and a FIFA Vice-President, guilty of having breached art. 15 (Duty of loyalty), art. 20 (Offering and accepting gifts or other benefits) and art. 25 (Abuse of position) of the 2020 edition of the FIFA Code of Ethics, as well as art. 28 (Misappropriation of funds) of the 2018 edition.”

“The investigation into Mr. Ahmad’s conduct in his position as CAF President during the period from 2017 to 2019 concerned various CAF related governance issues, including the organization and financing of an Umrah pilgrimage to Mecca, his involvement in CAF’s dealings with the sports equipment company Tactical Steel and other activities.”

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“In its decision, following an extensive hearing, the adjudicatory chamber ruled that, based on information gathered by the investigatory chamber, Mr. Ahmad had breached his duty of loyalty, offered gifts and other benefits, mismanaged funds and abused his position as the CAF President, pursuant to the FIFA Code of Ethics.”

“Consequently, the adjudicatory chamber found that Mr. Ahmad had breached arts 15, 20 and 25 of the current edition of the FIFA Code of Ethics, as well as art. 28 of the 2018 edition, and sanctioned him with a ban from all football-related activity (administrative, sports or any other) at both national and international level for five years. In addition, a fine in the amount of CHF 200,000 has been imposed on Mr. Ahmad.”

“The terms of the decision were notified to Mr. Ahmad today, the date on which the ban comes into force. In accordance with art. 78 par. 2 of the FIFA Code of Ethics, the full, motivated decision will be notified to Mr. Ahmad in the next 60 days, after which it will be published on legal.fifa.com.”

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Billionaire, Uzor Kalu wants to buy 35% stake in Arsenal FC

Orji Uzor Kalu has publicly declared his intention to purchase a 35% stake in Arsenal Football Club.

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Billionaire, Uzor Kalu wants to buy 35% stake in Arsenal FC

Senator Orji Uzor Kalu, the founder of SLOK Holdings and former Abia State Governor, has publicly declared his intention to purchase a 35% stake in Arsenal Football Club via a statement on his official Facebook page.

“As a pillar of sports in Africa, I am considering an investment in football, and I will buy a 35 percent stake in Arsenal football club. Our target is to lift the Champions League and Premier League back to back as we did with Enyimba,” he said.

READ: Manchester United net debt rises by 133% to £474.1million

READ: Top Football clubs are now using blockchain

The business tycoon has a wealth of experience regarding management and investment in clubs. He reiterated his success at Enyimba International FC between 2000-2007, where they won NPFL titles and clinched the CAF Champions League trophy in 2003 and 2004.

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READ: EPL clubs to be fined £37 million each over suspension of matches

READ: English Premier League fans to pay more for BT sports, Skysports matches

Our success with Enyimba between 2000-2007 has continuously increased my passion for football. Doing what you love and loving it is where greatness lies. I need 35 per cent of Arsenal to bring back trophies,” he added.

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READ: Coronavirus will cost Premier League clubs £1 billion

Kalu also wants to strike an agreement between Arsenal and Enyimba if the deal works through, “With Arsenal, we will make Enyimba great again with the strategic partnership we are packaging. We shall turn it around to create a platform for more of our professional players seeking international exposure. A win-win outing for all parties.”

READ: Partey Deal: Arsenal records a whopping £67 million deficit in summer of 2020 transfer window

What you should know

In recent years, Arsenal, which last won a premier league title during the invincible season in 2004, has been lagging in silverwares compared to the likes of Chelsea, Manchester City, and Manchester United, and has not been playing Champions League football for the past four years.

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Laliga lowers salary caps as Barcelona, Real Madrid, others get affected

Laliga has reduced the salary cap for its clubs, as some of its biggest clubs will be asked to make drastic cuts to their payrolls.

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Spanish top-flight league, Laliga has communicated to the 42 clubs belonging to Spain’s top two tiers of professional football, (Laliga and Segunda Division) the salary caps they are required to meet for the 2020/21 season that is underway.

The pandemic has affected a lot of clubs financially in the Spanish league due to lack of matchday revenue amongst the rest of them. Laliga in trying to reduce club debts and keep them financially healthy and has made longstanding financial control measures by setting a different salary cap for each club.

The different salary cap is calculated based on a series of factors such as revenues, costs and debts. Each club already knew their wage cap, but La Liga released the figures for reasons of transparency.

The squad spending limit includes spending on the first team in relation to players, the manager, assistant manager and fitness coach (registrable squad, as defined in Art. 38 of the Budget Preparation Rules) and spending on the reserves, the youth system and other areas (non-registrable squad, as defined in Art. 38 of the Budget Preparation Rules).

The total wage limit for all 20 clubs in Laliga for the ongoing 2020/21 season is €2.3billion, down €610million compared to the pandemic-affected 2019/20 season. While the total wage limit of second-tier Segunda Division is €237million.

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The wage limit reduction for the 2020/21 season means some of its biggest clubs will take drastic cuts to their payrolls.

The club’s affected the most are Barcelona and Valencia. They are expected to make a drastic cut in their payroll of about 40% this season, while Real Madrid and Atletico Madrid will only make an adjustment of 27% each.

Spanish Giants, Barcelona had the highest wage cap in Laliga last season but the pandemic affected them a lot. Their wage cap has been reduced by more than €300million, their wage cap for the 2020/21 season will be €382.7million down from €671.4million last season.

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Real Madrid will have the biggest wage limit this season which is €468.5million.

Laliga President, Javier Tebas, said there won’t be disciplinary action for clubs that go over the salary limit because of the unusual situation caused by the pandemic, but he warned that the clubs themselves would eventually feel the financial consequences of overspending.

Laliga President went on to talk about a lot of things, he said: “Clubs are doing what they have to do, this is an unusual year, This is going to affect a few more seasons, but hopefully we will be in a better situation compared to other European competitions.”

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