Man Utd Post Loss as Trump's Tax Reform Offsets Broadcast Boom
Manchester United blamed U.S. President Donald Trump's corporate tax reforms as the reason the Premier League giants posted a £29 million ($40.4 million) second quarter loss to the end of December 2017 despite a boom in broadcast income.
United said an exceptional "accounting write off of £48.8 million" had been made with the U.S. corporate tax rate to tumble from 35 percent to 21 percent following Trump's substantive enactment of US tax reform in December.
Several large corporations have signalled that the law will result in a short-term hit on earnings repatriated from overseas and due to revaluation of assets.
United, who retained their place at the top of Deloitte's Money League ahead of European champions Real Madrid as the richest club in the world, saw broadcast income rise 17.3 percent to £61.6 million thanks in large part to the club's return to the Champions League.
Total revenue for the quarter was up nearly four percent from last year to 163.9 million.
Another wave of TV cash could be around the corner with bids for a new three-year cycle for Premier League TV rights in the UK from 2019-2022 to be presented on Friday.
"The first round of domestic bids is due in tomorrow. Looking at past history we would expect the entire process will conclude in a relatively short period of time - within a couple of weeks," United's CEO Ed Woodward told investors via a conference call.
"There could be some news tomorrow, but more likely within a week or two."
The Premier League are looking to build on the current record £5.14 billion three-year domestic television deal with Sky Sports and BT Sport, which runs until 2019.
In a bid to keep the price of rights rising and encourage potential other bidders such as tech giants Amazon and Facebook, 200 games will be broadcast live, up from 168 in the current deal, in a range of packages.
The expected bonanza from both for domestic and overseas TV rights saw English clubs spent a record £430 million in the January transfer market.
United didn't splash out on transfer fees, but did acquire Alexis Sanchez from Arsenal in a swap deal that saw Henrikh Mkhitaryan move to the Emirates.
Reports say Sanchez will earn pre-tax wages of £500,000 ($697,000, 569,000 euros) a week on a four-and-a-half year deal at Old Trafford.
United's latest financial figures don't include the Chilean's deal, but wages did increase by 9.4 per cent to £69.6m, also in part caused by bonuses derived from the club's Champions League return.