The world's richest football club, Manchester United, has reported lower annual profits, and has said lower media revenues will hit profits this year.
The club said pre-tax profits were £27.9m in the year to July 31, down from £39.3m the previous year. It said lower media revenues would strip around £14m from overall turnover in the new financial year. This is partly because of its third place finish in the Premiership last season.
'As there are no costs associated with this revenue, this will have a significant impact on our profitability,' the club said in a statement.
The fall in profits for the year to July 31 reflected the impact of buying new players, including through the re-investment of the proceeds from last year's sale of England captain David Beckham.
Turnover for the year was slightly lower at £169m, due to fewer games at Old Trafford, while underlying operating profits grew by 6% to £58.3m. Profits were helped by an increased share of the Champions League television money after its Premiership win in 2002/3.
The club says plans to increase the capacity of Old Trafford to more than 75,000 are progressing well.
United revealed that it had planned to bid for Everton striker Wayne Rooney in Summer 2005, but interest from Newcastle United 'forced us to accelerate our plans or risk losing him'. The club said next summer's transfer budget had now been spent. Players' wages represented 45% of revenue, below its target of 50%.
The club paid agents' fees of £5.5m in the last year. Pressure from major shareholders JP McManus and John Magnier earlier this year forced the club to give more details of fees paid as a result of player transfers.
Shares in the company closed down £2.02 to £25.00 in London this evening.
