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Manchester United(MANU) - 2022 Q4 - Annual Report

Financial Performance - Total revenue for the fiscal year ended June 30, 2022, was £583.2 million, an increase from £494.1 million in 2021[173]. - Commercial revenue reached £257.8 million for the year ended June 30, 2022, compared to £232.2 million in 2021[170]. - Broadcasting revenue was £214.9 million for the year ended June 30, 2022, down from £254.8 million in 2021, impacted by COVID-19[171]. - Matchday revenue significantly increased to £110.5 million in 2022, compared to £7.1 million in 2021, as all matches operated at full capacity[172]. - Total operating expenses rose by 28.6% to £692.6 million from £538.4 million in 2021[339]. - Employee benefit expenses increased by 19.1% to £384.1 million, up from £322.6 million[339]. - Profit on disposal of intangible assets was £22.0 million, a 197.3% increase from £7.4 million in the previous year[339]. - Total revenue for the year ended June 30, 2022, was £583.2 million, an increase of £89.1 million, or 18.0%, compared to the previous year[340]. - Commercial revenue for the year ended June 30, 2022, was £257.8 million, an increase of £25.6 million, or 11.0%, over the previous year[341]. - Broadcasting revenue for the year ended June 30, 2022, was £214.9 million, a decrease of £39.9 million, or 15.7%, compared to the previous year[342]. - Matchday revenue for the year ended June 30, 2022, was £110.5 million, an increase of £103.4 million, or 1,456.3%, due to the return of fans[343]. - Total operating expenses for the year ended June 30, 2022, were £692.6 million, an increase of £154.2 million, or 28.6%, over the previous year[344]. - Employee benefit expenses for the year ended June 30, 2022, were £384.2 million, an increase of £61.6 million, or 19.1%, over the previous year[345]. - Amortization for the year ended June 30, 2022, was £151.5 million, an increase of £27.1 million, or 21.8%, over the previous year[347]. - Exceptional items for the year ended June 30, 2022, were a cost of £24.7 million, compared to £nil in the previous year[348]. - Net finance costs for the year ended June 30, 2022, were £62.2 million, compared to net finance income of £12.9 million for the previous year[350]. - Cash resources as of June 30, 2022, were £121.2 million, with access to undrawn revolving facilities of £200 million[354]. Revenue Breakdown - Total Commercial revenue for the year ended 30 June 2022 was £257.8 million[315]. - Total sponsorship revenue for the year ended 30 June 2022 was £147.9 million[316]. - The Premier League represented 25.1%, 35.9%, and 23.2% of total revenue for the years ended 30 June 2022, 2021, and 2020, respectively[310]. - The second largest customer, adidas, represented 13.1%, 15.7%, and 15.3% of total revenue for the years ended 30 June 2022, 2021, and 2020, respectively[310]. - Broadcasting revenue is derived from centrally negotiated domestic and international television rights, with income shared among Premier League clubs based on performance[246]. Audience and Engagement - The club's games during the 2021/22 season generated a cumulative audience reach of 2.9 billion viewers, averaging over 59.8 million viewers per game[166]. - Total social connections grew to over 220.8 million as of June 30, 2022, a 25.4% increase from 176.1 million in 2021[166]. - As of June 30, 2022, the company had over 220.8 million social connections, including approximately 75 million on Facebook, over 58.8 million on Instagram, and over 36.2 million on Twitter[266]. - For the 2021/22 season, the company generated over 2.8 billion interactions across all social media platforms[266]. - The company launched a free global mobile application at the start of the 2018/19 season, enhancing e-commerce functionality and user engagement[263]. - The mobile application includes features such as messaging, matchday audio streaming, and access to the Premier League archive collection, driving additional data acquisition[263]. - The company aims to deepen relationships with fans through a CRM database, enabling targeted communications and upsell opportunities[267]. - The digital media strategy includes localized content in multiple languages to enhance engagement with followers globally[261]. - MUTV is available in 230 markets globally, offering a variety of content including live football and behind-the-scenes coverage[268]. - The membership program saw over 276,000 members at the end of the 2021/22 season, a 95.7% year-on-year increase[273]. Sponsorship and Partnerships - The club has secured new partnerships, including a training shirt partnership with Tezos and a principal shirt partnership with TeamViewer, enhancing engagement through AR solutions[189]. - The company has developed a dedicated sales team to enhance sponsorship opportunities, focusing on larger global brands rather than regional partnerships[227]. - The company believes there is significant growth potential in financial services products, including credit and debit cards, as part of its commercial strategy[234]. - The company retains full control over its retail, merchandising, apparel, and product licensing, generating revenue from a wide range of products globally[237]. - The company aims to expand its e-commerce capabilities by improving digital shopping experiences and targeted merchandise offerings[244]. Community and Social Responsibility - The Manchester United Foundation has impacted over 75,000 young people through community projects and raised over £50,000 for charitable causes[289]. - The club launched the SEE RED campaign to confront racism and discrimination, promoting fan responsibility in reporting incidents[294]. - The club's equality, diversity, and inclusion strategies are embedded throughout its business operations[296]. - The club has frozen general admission season ticket prices for the 2022/23 season for the eleventh consecutive year to support fans[275]. Football Operations - Manchester United operates under FIFA, UEFA, and FA regulations, ensuring compliance with international and domestic football governance[208][209][210]. - The Premier League allows four teams from Manchester United to qualify for the Champions League, enhancing competitive opportunities[209]. - The club's football operations include a global scouting network and a focus on developing players through its youth academy[211]. - The men's first team participates in the Premier League, FA Cup, EFL Cup, and international competitions like the Champions League[212]. - The club's women's team aims to compete at the highest level in Europe, with players from the academy forming a core part of the team[220]. - Manchester United's football operations are supported by a team of over 225 individuals, including coaches, scouts, and medical staff[213]. - The company has enhanced its scouting infrastructure over the past 5 years, establishing a presence in all major footballing nations to improve talent recruitment[223]. - The youth academy has included a homegrown player in every matchday squad for the last 85 years, contributing to talent flow to the men's first team[221]. - The Under 18 men's team won a record 11th FA Youth Cup in May 2022, with the final attended by over 67,000 fans[222]. Infrastructure and Facilities - The company has invested significantly in its performance center, enhancing training facilities with advanced sports and science equipment to ensure players achieve peak physical condition[224]. - The club's commitment to enhancing the fan experience includes investments in facilities and premium seating at Old Trafford[180]. - The club's stadium, Old Trafford, has a capacity of 74,240 and welcomed back 10,000 supporters for the final home match of the 2020/21 season[271]. - Matchday revenue has been enhanced by restructuring stadium facilities, focusing on higher-priced hospitality options[275]. - The average attendance for home Premier League matches has exceeded 99% since the 1997/98 season, indicating high capacity utilization[272]. Compliance and Regulations - The break-even test result submitted in March 2022 was positive, indicating compliance with Premier League Profitability and Sustainability Rules[286]. - UEFA's updated regulations allow a larger deficit of up to €60 million over a three-year period, with specific financial criteria[282]. - UEFA's monitoring process includes breach indicators that trigger additional reporting requirements, ensuring financial compliance[278]. - Total fixed distribution amounts for the Champions League are €1.101 billion, for the Europa League are €255.8 million, and for the Europa Conference League are €188 million[251]. - The total market pool for the Champions League is €300.3 million per annum, while for the Europa League it is €139.5 million per annum, and for the Europa Conference League it is €23.5 million per annum[251]. - UEFA announced a total revenue shortfall of approximately €566 million due to COVID-19, representing 16% of total revenues, which will be recouped over five seasons from 2019/20 to 2023/24[255]. - A projected annual reduction of approximately 3.5% in distributions to clubs is expected through to the 2023/24 season[257].