Manchester United(MANU) - 2023 Q4 - Annual Report

Financial Performance - Total revenue for the fiscal year ended June 30, 2023, was £643.9 million, an increase of 10.4% from £583.2 million in 2022[190] - Total revenue for the year ended June 30, 2023, was £648.4 million, an increase of £65.2 million, or 11.2%, compared to the previous year[338] - Total operating expenses decreased by £11.5 million, or 1.7%, to £681.1 million, with employee benefit expenses down £52.8 million, or 13.7%[344] - The income tax credit for the year ended 30 June 2023 was £3.9 million, a significant decrease from £34.1 million for the year ended 30 June 2022, primarily due to deferred tax assets recognized from losses[351] - Cash generated from operations for the year ended 30 June 2023 was £128.9 million, an increase of £7.2 million from £121.7 million for the year ended 30 June 2022, driven by increased Commercial and Matchday revenues[367] Revenue Breakdown - Commercial revenue reached £302.9 million for the year ended June 30, 2023, up from £257.8 million in 2022, reflecting a growth of 17.5%[186] - Total Commercial revenue for the year ended June 30, 2023, was £302.9 million[319] - Total sponsorship revenue for the year ended June 30, 2023, was £189.5 million[320] - Total retail, merchandising, apparel & product licensing revenue for the year ended June 30, 2023, was £113.4 million[322] - Total Broadcasting revenue for the year ended June 30, 2023, was £209.1 million[325] - Total Matchday revenue for the year ended June 30, 2023, was £136.4 million[326] Sponsorship and Partnerships - The agreement with adidas, extended until June 30, 2035, enhances the company's global technical sponsorship and dual-branded licensing rights, excluding mono-branded licensing rights[198] - In fiscal year 2023, the company announced five new global and regional partnerships and extensions to three existing partnerships, emphasizing a proactive approach to securing sponsorships[197] - The primary source of revenue in the commercial sector comes from sponsorship agreements, allowing global companies to partner with the club[238] - Sponsorship agreements provide various rights, including exposure on the club's television platform, website, and social media channels[239] - The club's strategy focuses on larger, established global brands for sponsorships rather than regional partnerships[240] Broadcasting and Media Rights - Broadcasting revenue was £209.1 million for the year ended June 30, 2023, a decrease of 2.6% from £214.9 million in 2022[188] - The international broadcasting rights for the Premier League's new cycle represent a 28% uplift on the previous cycle, with overall growth for the current cycle at 16%[206] - The UEFA club competition's media rights agreement, worth €3.5 billion per season, marks a 9% increase on the previous contract, indicating strong demand for live sports content[207] - Broadcasting revenue from the Premier League is shared among clubs based on finishing position and live television appearances, with international rights fixed at the previous cycle's equal share adjusted for inflation[255] Matchday Revenue - Matchday revenue increased significantly to £136.4 million for the year ended June 30, 2023, compared to £110.5 million in 2022, marking a growth of 23.5%[189] - The average attendance for home Premier League matches has been over 99% since the 1997/98 season, indicating high capacity utilization[279] - The company aims to enhance matchday revenue by restructuring stadium composition, focusing on developing hospitality facilities that sell at higher prices[281] Digital and Fan Engagement - The CRM database holds approximately 60.0 million records as of June 30, 2023, providing insights to drive revenue[182] - Total social connections grew to over 240.9 million as of June 30, 2023, representing a 9.1% increase from 220.8 million in 2022[182] - The club's digital collectibles range and Discord community launched in the year ended June 30, 2023, targeting younger audiences and expanding engagement opportunities[205] - The mobile application launched in 2018 has been enhanced to include features such as messaging and access to the Premier League archive, driving additional data acquisition and personalization capabilities[270] Financial Sustainability and Regulations - UEFA's cost control rule restricts spending on player and coach wages, transfers, and agent fees to 70% of club revenues, with gradual implementation to reach this percentage by the 2025/26 season[286] - The club's financial sustainability regulations aim to ensure clubs operate within their means and maintain financial stability[290] - The club reported a loss of €34.4 million for the four years ended June 30, 2022, exceeding the allowable loss limit of €5 million by €29.4 million[288] - The updated break-even assessment allows a larger deficit of up to €60 million over a three-year period, which can be increased to €90 million based on specific financial criteria[285] Investments and Expenditures - Net capital expenditure on property, plant and equipment for the year ended June 30, 2023 was £15.6 million, an increase of £7.3 million from £8.3 million for the year ended June 30, 2022[372] - Net capital expenditure on intangible assets for the year ended June 30, 2023 was £124.6 million, an increase of £39.5 million from £85.1 million for the year ended June 30, 2022, primarily due to player acquisitions[372] - The company has conducted 29 exhibition games globally over the last 6 years, generating guaranteed fees and additional revenue from sponsorship opportunities[247] Community Engagement and Sustainability - The Foundation delivered over 23,000 sessions in 2022/23, totaling more than 30,000 hours of community outreach programs[296] - The club achieved the Carbon Trust Standard and the Gold Standard in Green Tourism Business Certification, reflecting its commitment to sustainability[304] Player and Team Development - The youth academy has included a homegrown player in every matchday squad for the last 85 years, contributing to the club's talent development and reducing transfer market expenses[234] - The men's first team consists of 60 players under contract, with 32 having made appearances for the team[228] - The club's women's team aims to develop a competitive squad with a core of players from its successful Girls' Regional Talent Club[233]