Manchester United profits fall

Manchester Utd: European competitions are a money spinner

By Simon Hooper CNNSI.com Europe

Manchester United Plc's full-year pre-tax profits have slipped £5.6 million ($8.2 million) to just £16 million ($22.55 million) as player salaries rose 20 percent, the English Premiership champions have announced.

Uncertainty surrounding the future of the transfer system has caused shares to plummet during the close season.

Manchester Utd has seen its share price fall about 40 percent since the stock's peak at more than 400p in March when United became the first £1 (£1.47 billion) billion club

But the news is not going to set off alarm bells around Old Trafford, nor will it threaten the football club's position as the world's richest.

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Indeed, for those who still subscribe to the old-fashioned ideal of Manchester United as a football club, and for whom trophies count for more than profit margins, the small dip offers a refreshing reassurance that the club's on-field success has not yet been completely marginalised. The supporter remains superior to the shareholder.

The club's willingness to raise player costs by 20 percent and to make Roy Keane the highest-paid player in England earlier in the year suggests that the club is finally ready to use its financial muscle to compete with European rivals for whom cups, championships and star names remain the stock by which wealth is measured.

Manchester United are the world's biggest and richest club and a key player amongst the G14 clubs that will decide the future of European football, but the title of most successful eludes it.

For a club virtually guaranteed an annual berth in the Champions League by its domestic dominance, its one European Cup of the modern era remains a pretty poor return and in many ways United's probity as a Plc is seen as contributing to this.

By comparison, Real Madrid this summer spent £41 million ($60 million) on Portuguese winger Luis Figo, despite debts approaching £200 million ($295 million).

The club's reward for such fiscal recklessness has been two European Cups and a squad of the world's most glamorous stars.

Lazio, now a perennial contender in Italy and Europe, have spent £90 million ($133 million) on new players since the end of last season. Yet club president Sergio Cragnotti has brought the club a first Italian league championship since 1974.

In the past United have shirked from the sort of investment that would have added a Batistuta, Zidane or Rivaldo to the Old Trafford stable of talent.

But the arrival of French World Cup-winning goalkeeper Fabien Barthez from Monaco at the start of the season for £7.8 million ($11 million) is a step in the right direction. Crucially, United have succeeded in tempting a player to swap the Mediterranean for the Manchester winter.

Big transfers, big debts for European soccer
August 31, 2000

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