OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion should be read in conjunction with our consolidated financial statements and notes included elsewhere in this Annual Report.
Overview
We are one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on Earth. Through our 148-year heritage we have won 69 trophies, including a joint-record 20 English league titles, enabling us to develop what we believe is one of the world's leading sports brands and a global community of fans and followers. Our large, passionate community provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, broadcasting and matchday. We attract leading global companies such as adidas, Qualcomm and Betway that want access and exposure to our community of followers and association with our brand.
How We Generate Revenue
We operate and manage our business as a single reporting segment - the operation of professional sports teams. We review our revenue through three principal sectors - Commercial, Broadcasting and Matchday - and within the Commercial revenue sector, we have two revenue streams which commercialize our global brand: sponsorship revenue; and retail, merchandising, apparel & product licensing revenue.
Revenue Drivers
Commercial
Commercial revenue is derived from sponsors, commercial partners and retail, merchandising, apparel and licensing. We generate our Commercial revenue with low fixed costs and small incremental costs for each additional sponsor, making our commercial operations a relatively high margin and scalable part of our business and a driver of growth for our overall profitability. Total Commercial revenue for the year ended 30 June 2026 was £317.3 million.
Sponsorship
We commercialize the value of our global brand and community of followers through sponsorship relationships with leading international and regional companies around the globe. To better capitalize on the strength of our brand, we have developed a segmentation sponsorship strategy. See "Item 4. Information on the Company - Revenue Sectors - Commercial - Sponsorship - Our Sponsors" for some of our global and regional sponsors as at 8 September 2026.
A partnership with Manchester United provides corporations with the ability to associate themselves with the highly popular Manchester United brand and a global marketing platform to quickly and effectively amplify their brand and message to their potential customers.
For the 2025/26 season, our shirt sponsor was Qualcomm via their Snapdragon brand and this will continue for the 2026/27 season. Total sponsorship revenue for the year ended 30 June 2026 was £160.5 million.
Retail, Merchandising, Apparel & Product Licensing
Our retail, merchandising, apparel & product licensing business includes the sale of sports apparel, training and leisure wear and other clothing featuring the Manchester United brand as well as other licensed products. These products are distributed on a global basis through Manchester United branded retail stores and e-commerce platform, as well as through our partners' wholesale distribution channels.
On 21 July 2023, we signed a 10-year extension to our agreement with adidas in respect of global technical sponsorship and dual-branded licensing rights, which began on 1 August 2015 and now terminates on 30 June 2035. See "Item 4. Information on the Company - Revenue Sectors - Commercial - Retail, Merchandising, Apparel & Product Licensing" for additional information regarding our agreement with adidas.
Total retail, merchandising, apparel & product licensing revenue for the year ended 30 June 2026 was £156.8 million.
Broadcasting
We benefit from the distribution of live football content directly from the revenue we receive and indirectly through increased global exposure for our commercial partners. Broadcasting revenue is derived from our share of the global broadcasting rights relating to the Premier League, Champions League and other competitions. The growing popularity of the Premier League and Champions League in international markets and the associated increases in media rights values have been major drivers of the increase in our overall Broadcasting revenue in recent years.
Season 2025/26 was the first in a new four-year cycle of Premier League domestic broadcasting rights, in a deal worth a total value of £6.7 billion, a 4% increase in live rights value compared to the previous cycle. This is the largest sports media deal ever completed in the UK. The value of the Premier League's international broadcasting rights for the three-year period from 2025/26 to 2027/28 represents a 27% uplift on the previous three seasons and across the big five European football leagues, the Premier League's share of the global rights market is up to 48%, from 40% in the 2019/20 season, demonstrating the continued growth and appeal of the league.
The UEFA club competitions' latest three-year media rights agreement which commenced in the 2024/25 season, is worth €4.4 billion per season, compared to €3.5 billion per season under the previous agreement, an increase of 26%.
Our participation in the Premier League and Champions League, Europa League or Conference League (and consequently, our receipt of the revenue generated by these broadcasting contracts) is predicated on the success of our men's first team, and if our men's first team fails to qualify for these UEFA club competitions or is relegated from the Premier League in any given season, our Broadcasting revenue for that and subsequent fiscal years will be adversely impacted, partially offset by lower operating expenses. Our men's first team did not participate in UEFA competitions in the 2025/26 season, but as a result of performance in the Premier League across the 2025/26 season, will compete in the 2026/27 UEFA Champions League.
In addition, MUTV delivers Manchester United programming and other content to territories around the world. MUTV generated total revenue of £5.7 million, £5.8 million and £6.2 million for each of the years ended 30 June 2026, 2025 and 2024, respectively. Total Broadcasting revenue for the year ended 30 June 2026 was £206.8 million.
Matchday
Matchday revenue is a function of the number of games played in front of a crowd at Old Trafford, the size and seating composition of Old Trafford, attendance at our matches and the prices of tickets and hospitality sales. A significant driver of Matchday revenue is the number of home games we play at Old Trafford in front of a crowd, which is ordinarily based on 19 Premier League matches and any additional matches resulting from the success of our men's first team in the FA Cup, EFL Cup and UEFA club competitions. Our participation in the Premier League and UEFA club competitions (and consequently, our receipt of the revenue generated by these matches) is predicated on the success of our men's first team, and if our men's first team fails to qualify for UEFA club competitions or is relegated from the Premier League in any given season, our Matchday revenue for that and subsequent fiscal years will be adversely impacted, partially offset by lower resulting expenses. Average attendance for our home Premier League matches played in front of a crowd has been over 99% for each season since the 1997/98 season, with strong attendance for UEFA club competitions, FA Cup and EFL Cup matches. Total Matchday revenue for the year ended 30 June 2026 was £153.5 million.
Other Factors That Affect Our Financial Performance
Employee benefit expenses
Player and staff compensation comprise the majority of our operating costs. Of our total operating costs, player costs, which include salaries, bonuses, benefits and national insurance contributions are the primary component. Compensation to non-player staff, which includes our manager, coaching staff and key football management, also accounts for a significant portion. Competition from top clubs in the Premier League and Europe has resulted in increases in player and manager salaries, forcing clubs to spend an increasing amount on player and staff compensation, and we expect this trend to continue.
Other operating expenses
Our other operating expenses generally include certain variable costs such as Matchday catering, policing, security stewarding and cleaning at Old Trafford, visitor gateshare for domestic cups, and costs related to the delivery on media and commercial sponsorship contracts. Other operating expenses also include certain fixed costs, such as property costs, maintenance, human resources, training and developments costs, and professional fees. Our other operating expenses are subject to inflationary pressures and as such, can increase over time.
Amortization, depreciation and impairment
We amortize the capitalized costs associated with the acquisition of players' and key football management staff registrations. These costs are amortized over the period of the employment contract agreed with a player/key football management staff. If a player or key football management staff extends their contract prior to the end of the pre-existing period of employment, the remaining unamortized portion of the acquisition cost is amortized over the period of the new contract. Changes in amortization of the costs of players' and key football management staff registrations from year to year and period to period reflect additional fees paid for the acquisition of players and key football management staff, the impact of contract extensions and the disposal of registrations. As such, increased players' and key football management staff registration costs in any period could cause higher amortization in that period and in future periods and have a negative impact on our results of operations. Moreover, to the extent that the player and key football management staff registration costs vary from period to period, this may drive variability in our results of operations. We also amortize the capitalized costs associated with the acquisition of other intangible assets over their estimated useful lives, which is typically between 3 and 10 years.
Depreciation primarily reflects a straight-line depreciation on investments made in property, plant and equipment. Depreciation over the periods under review results primarily from the depreciation of Old Trafford, including incremental improvements made to Old Trafford each season.
Impairment charges arise when an asset's carrying amount exceeds its recoverable amount. Assets are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable, other than goodwill which is tested for impairment annually.
Exceptional items
Exceptional items are those items that in management's judgment need to be separately disclosed by virtue of their size, nature or incidence in order to provide a proper understanding of our results of operations and financial condition. Exceptional items are disclosed in Note 6 to the financial statements.
Profit on disposal of intangible assets
We recognize profits or losses on the disposal of intangible assets (primarily players' registrations) in our statement of profit or loss. Acquisitions and disposals of players are discretionary and we make transfer decisions based upon the requirements of our first teams and the overall availability of players. These requirements and the availability of players, and resulting profits or losses on disposals, may vary from period to period, contributing to variability in our results of operations between periods.
Finance (costs)/income
A key component of our expenses during each of the past three fiscal years has been interest costs and retranslations of our USD borrowings. We expect finance costs to continue to be a significant component of our expenses. See "Item 5.B. Liquidity and Capital Resources - Indebtedness." Finance costs also include the unwind of the discount recognized on amounts payable or receivable under transfer agreements as appropriate which can vary, depending on transfer activity and interest rates, amongst other factors.
Taxes
During each of the three years ended 30 June 2026, 2025 and 2024, our principal operating subsidiaries were tax residents in the United Kingdom. We were subject to a UK statutory tax rate of 25.0% in the years ended 30 June 2026, 30 June 2025 and 30 June 2024.
Although we are organized as a Cayman Islands exempted company, we report as a US domestic corporation for US federal income tax purposes. As a result, our worldwide income is also subject to US taxes at the US statutory rate (currently 21%).
The current statutory tax rate in the UK is 25% and as a result we expect to utilize UK taxes paid in the calculation of our US tax liability and therefore we do not expect to be double taxed on our income. We expect our future cash tax rate to continue to align more closely to the UK statutory tax rate of 25% now that this rate has taken effect.
We may also be subject to US state and local income (franchise) taxes based generally upon where we are doing business. These tax rates vary by jurisdiction and the tax base. Generally, state and local taxes are deductible for US federal income tax purposes. Furthermore, because most of our subsidiaries are disregarded from their owner for US federal income tax purposes, we are not able to control the timing of much of our US federal income tax exposure. In calculating our liability for US federal income tax, however, certain of our deductible expenses are higher than the amount of those same expenses under UK corporation tax rules, owing to differences in the relevant rules of the two jurisdictions and the related difference in the opening book versus tax basis of our assets and liabilities. Finally, our UK tax liability can be credited against our US federal income tax liabilities, subject to US rules and limitations.
A. | OPERATING RESULTS |
The following table shows selected audited consolidated statement of profit or loss data for the years ended 30 June 2026 and 2025. For a discussion of our results of operations for the year ended 30 June 2024, including a year-to-year comparison between the years ended 30 June 2025 and 2024, refer to Part I, Item 5, "Operating and Financial Review and Prospects" in our Annual Report Form 20-F for the year ended 30 June 2025.
| | | | | | | |
| | Year ended 30 June | | ||||
| | 2026 | | 2025 | | % change | |
Statement of profit or loss data | | (£'000) | | (£'000) | | | |
Revenue | | 677,649 | 666,514 | 1.7 | % | ||
Analyzed as: | | | | | | ||
Commercial revenue | | 317,329 | 333,274 | (4.8) | % | ||
Broadcasting revenue | | 206,765 | 172,977 | 19.5 | % | ||
Matchday revenue | | 153,555 | 160,263 | (4.2) | % | ||
Operating expenses | | (701,895) | (733,686) | 4.3 | % | ||
Analyzed as: | | | | | | ||
Employee benefit expenses | | (302,025) | (313,256) | 3.6 | % | ||
Other operating expenses | | (159,217) | (170,429) | 6.6 | % | ||
Depreciation and impairment | | (20,631) | (17,002) | (21.3) | % | ||
Amortization | | (211,813) | (196,373) | (7.9) | % | ||
Exceptional items | | (8,209) | (36,626) | 77.6 | % | ||
Operating loss before profit on disposal of intangible assets | | (24,246) | (67,172) | 63.9 | % | ||
Profit on disposal of intangible assets | | 46,881 | 48,742 | (3.8) | % | ||
Operating profit/(loss) | | 22,635 | (18,430) | - | | ||
Finance costs | | (77,657) | (58,988) | (31.6) | % | ||
Finance income | | 8,037 | 37,754 | (78.7) | % | ||
Net finance costs | | (69,620) | (21,234) | (227.9) | % | ||
Loss before income tax | | (46,985) | (39,664) | (18.5) | % | ||
Income tax credit | | 4,031 | 6,641 | (39.3) | % | ||
Loss for the year | | (42,954) | (33,023) | (30.1) | % | ||
Revenue
Total revenue for the year ended 30 June 2026 was £677.6 million, an increase of £11.1 million, or 1.7%, compared to the year ended 30 June 2025, as a result of an increase in revenue in our Broadcasting revenue sector, partially offset by a decrease in our Commercial and Matchday revenue sectors, as described below.
Commercial revenue
Commercial revenue for the year ended 30 June 2026 was £317.3 million, a decrease of £16.0 million, or 4.8%, over the year ended 30 June 2025.
| ● | Sponsorship revenue for the year ended 30 June 2026 was £160.5 million, a decrease of £27.9 million, or 14.8%, over the year ended 30 June 2025, primarily due to the Club's training kit sponsorship agreement with Tezos in the prior year, which ended before the start of the 2025/26 season; and |
| ● | Retail, merchandising, apparel & product licensing revenue for the year ended 30 June 2026 was £156.8 million, an increase of £11.9 million, or 8.2%, over the year ended 30 June 2025, due to the current year including a full year of our in-house e-commerce model in partnership with SCAYLE, compared to only ten months in the prior year, combined with a one-off credit during the year ended 30 June 2026 relating to amended terms of this model. |
Broadcasting revenue
Broadcasting revenue for the year ended 30 June 2026 was £206.8 million, an increase of £33.9 million, or 19.6%, over the year ended 30 June 2025, primarily due to the men's first team finishing 3rd in the Premier League, compared to 15th in the prior year, partially offset by the men's first team not participating in UEFA competition in the current year, compared to reaching the UEFA Europa League final in the prior year.
Matchday revenue
Matchday revenue for the year ended 30 June 2026 was £153.5 million, a decrease of £6.8 million, or 4.2%, over the year ended 30 June 2025, due to the men's first team playing ten fewer home matches in the current year compared to the prior year, partially offset by strong demand for our general admission and hospitality offerings.
Total operating expenses
Total operating expenses (defined as employee benefit expenses, other operating expenses, depreciation and impairment, amortization and exceptional items) for the year ended 30 June 2026 were £701.9 million, a decrease of £31.8 million, or 4.3%, over the year ended 30 June 2025. This decrease is explained by category below.
Employee benefit expenses
Employee benefit expenses for the year ended 30 June 2026 were £302.0 million, a decrease of £11.2 million, or 3.6%, over the year ended 30 June 2025. This is primarily due to changes in the make-up of the men's first team squad, combined with savings associated with headcount reduction programs implemented in the prior two fiscal years.
Other operating expenses
Other operating expenses for the year ended 30 June 2026 were £159.2 million, a decrease of £11.2 million, or 6.6%, over the year ended 30 June 2025. This is primarily due to savings associated with the club's drive to improve operating efficiency, combined with reduced matchday costs as a result of hosting ten fewer home matches in the current season compared to the prior year.
Depreciation and impairment
Depreciation and impairment for the year ended 30 June 2026 amounted to £20.6 million, an increase of £3.6 million, or 21.3%, over the year ended 30 June 2025.
Amortization
Amortization, primarily of registrations, for the year ended 30 June 2026 was £211.8 million, an increase of £15.4 million, or 7.9%, over the year ended 30 June 2025, primarily due to continued investment in the first team playing squad. The unamortized balance of registrations as of 30 June 2026 was £452.3 million, of which £156.1 million is expected to be amortized in the year ending 30 June 2027. The remaining balance is expected to be amortized over the four years ending 30 June 2031. This does not take into account player acquisitions after 30 June 2026, which would have the effect of increasing the amortization expense in future periods, nor does it consider player departures subsequent to 30 June 2026, which would have the effect of decreasing future amortization charges. Furthermore, any contract renegotiations would also impact future charges.
Exceptional items
Exceptional items for the year were a cost of £8.2 million, comprising costs associated with the departure of former men's first team head coach Ruben Amorim, along with final costs in relation to the Club's restructuring programs. The charge also includes additional contributions we expect to pay towards the Football League pension scheme deficit.
Exceptional items for the year ended 30 June 2025 were a cost of £36.6 million, as a result of compensation for loss of office costs incurred in relation to the restructuring of the club's operations, as well as costs associated with the departure of former men's first team head coach Erik ten Hag and various members of football staff.
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the year ended 30 June 2026 was £46.9 million, compared to a profit of £48.7 million for the year ended 30 June 2025. The profit on disposal of intangible assets for the year ended 30 June 2026 primarily related to the disposals of Garnacho (Chelsea) and Hojlund (Napoli), combined with additional fees associated with disposals made in previous years. The profit on disposal of intangible assets for the year ended 30 June 2025 primarily related to the disposal of McTominay (Napoli), Wan-Bissaka (West Ham), Greenwood (Olympique Marseille) and Hannibal (Burnley).
Net finance costs
Net finance costs for the year ended 30 June 2026 were £69.6 million, compared to net finance costs of £21.2 million for the year ended 30 June 2025. This is primarily due to a large unrealized foreign exchange loss on unhedged USD borrowings of £10.0 million in the current year, compared to a large unrealized foreign exchange gain of £22.9 million in the prior year.
Income tax
The income tax credit for the year ended 30 June 2026 was £4.0 million, compared to £6.6 million for the year ended 30 June 2025. In both years the credit arose primarily as a result of deferred tax assets recognized in respect of losses arising in the respective year.
Safe Harbor
See the Section entitled "Forward-Looking Statements" at the beginning of this Annual Report.
B. | LIQUIDITY AND CAPITAL RESOURCES |
Our primary cash requirements stem from the payment of transfer fees for the acquisition of players' registrations, capital expenditure for the improvement of facilities at Old Trafford and Carrington, payment of interest on our borrowings, employee benefit expenses, other operating expenses and, for certain periods, dividends on our Class A ordinary shares and Class B ordinary shares. Historically, we have met these cash requirements through a combination of operating cash flow, proceeds from transfer fees from the sale of players' registrations, drawdowns on our revolving facility and through the sale of our Class A and Class B ordinary shares. Our existing borrowings primarily consist of our secured term loan facility, our senior secured notes and outstanding drawdowns under our revolving facility. We have US dollar revenues that we use to hedge our US dollar borrowing exposure. We continue to evaluate our financing options and may, from time to time, take advantage of opportunities to repurchase or refinance all or a portion of our existing indebtedness to the extent such opportunities arise.
Our business ordinarily generates a significant amount of cash from our Matchday revenues and commercial contractual arrangements at or near the beginning of our fiscal year, with a steady flow of other cash received throughout the fiscal year. In addition, we ordinarily generate a significant amount of our cash through advance receipts, including season tickets (which include general admission season tickets and seasonal hospitality tickets), most of which are received prior to the end of June for the following season. Our Broadcasting revenues from the Premier League and UEFA are paid periodically throughout the season, with primary payments made in late summer, December, January and the end of the football season. Our sponsorship and other commercial revenue tends to be paid either quarterly or annually in advance. However, while we typically have a high cash balance at the beginning of each fiscal year, this is largely attributable to deferred revenue, the majority of which falls under current liabilities in the consolidated balance sheet, and this deferred revenue is unwound through the statement of profit or loss over the course of the fiscal year. Over the course of a year, we use our cash on hand to pay employee benefit expenses, other operating expenses, interest payments and other liabilities as they become due. This typically results in negative working capital movement at certain times during the year. In the event it ever became necessary to access additional operating cash, we also have access to cash through our revolving facility. As of 30 June 2026, we had £110 million of outstanding loans under our revolving facility.
Pursuant to our contract with adidas, which began in August 2015 and was extended in July 2023, the minimum guarantee payable by adidas over the life of the extended agreement to June 2035 is £1,650 million, being £750 million per the original term, plus £900 million per the extension, subject to certain adjustments. See "Item 4. Information on the Company - Revenue Sectors - Commercial - Retail, Merchandising, Apparel & Product Licensing" for additional information regarding our agreement with adidas.
We also maintain a mixture of long-term debt and capacity under our revolving facility so that we have sufficient funds available for short-term working capital requirements and for investment in the playing squad and other capital projects, including those related to our ambition to build a proposed new stadium.
Our cost base is more evenly spread throughout the fiscal year than our cash inflows. Employee benefit expenses and fixed costs constitute the majority of our cash outflows and are generally paid evenly throughout the 12 months of the fiscal year.
In addition, transfer windows for acquiring and disposing of registrations occur in January and the summer. During these periods, we may require additional cash to meet our acquisition needs for new players and we may generate additional cash through the sale of existing registrations. Depending on the terms of the agreement, transfer fees may be paid or received by us in multiple installments, resulting in deferred cash paid or received. If we seek to acquire players with values substantially in excess of the values of players we seek to sell, we may be required to utilize cash available from our revolving facility to meet our cash needs.
Acquisition and disposal of registrations also affects our trade receivables and payables, which affects our overall working capital. Our trade receivables include accrued revenue from sponsors as well as transfer fees receivable from other football clubs, whereas our trade payables include transfer fees and other associated costs in relation to the acquisition of registrations.
Capital expenditures at Old Trafford
Our stadium, Old Trafford, remains one of our key assets and a significant part of the overall experience we provide to our followers. Old Trafford has been our home stadium since 1910 and has undergone significant changes over the years. To maintain the quality of service, enhance the fan experience and increase Matchday revenue, we continually invest in the refurbishment and regeneration of Old Trafford. Following a substantial development prior to the 2006/07 season, we expanded seating capacity at Old Trafford from approximately 68,000 to 74,240. The current capacity of Old Trafford is 74,500. In addition, we have continued to invest in improving hospitality suites and office and catering facilities through refurbishment programs.
We record these investments as capital expenditures. Capital expenditure at Old Trafford was £7.7 million, £13.1 million and £8.2 million for the years ended 30 June 2026, 2025 and 2024, respectively.
In addition, we spent approximately £14.7 million, £42.7 million and £4.8 million for the years ended 30 June 2026, 2025 and 2024 respectively, at Carrington, our training facility. The significant increase in the year ended 30 June 2025 is due to the investment in our new, world-class men's first team facility, which opened in August 2025.
The year ended 30 June 2026 also includes capital expenditure of £63.5 million for freehold property related to our ambition to build a proposed new stadium, with no comparative expenditure in the years ended 30 June 2025 and 30 June 2024.
Digital media capital expenditure
We intend to continue investing in our digital media assets, including our website, mobile application and digital media capabilities.
Net intangible asset - registrations capital expenditure
Our average net intangible asset - registrations capital expenditure over the last 5 years has been a cash outflow of £146.1 million per fiscal year. However, net intangible asset - registrations capital expenditure has varied significantly from period to period, as shown in the table below, and while we expect that trend to continue, competition for talented players may force clubs to spend increasing amounts on player registration fees. We may explore new player acquisitions in connection with future transfer periods that may materially increase the amount of our net intangible asset - registrations capital expenditure. Actual cash used or generated from net intangible asset - registrations capital expenditure is recorded on our statement of cash flow under net cash outflow or inflow from investing activities.
Last 5 Years Net Intangible Asset - Registrations Capital Expenditure(1)
(1) | The net intangible asset - registrations capital expenditure data presented is the sum of all cash used for purchases of intangible assets - registrations and all cash generated from sales of intangible assets - registrations. |
Working Capital
Our directors confirmed that, as of the date of this Annual Report, after taking into account our current cash and cash equivalents and our anticipated cash flow from operating and financing activities, we believe that we have sufficient working capital for our present requirements for at least the next 12 months.
Commitments
As of 30 June 2026, the Group had contracted capital expenditure relating to property, plant and equipment amounting to £0.5 million and to other intangible assets amounting to £nil. These amounts are not recognized as liabilities.
Cash Flow
The following table summarizes our cash flows for the years ended 30 June 2026 and 2025:
| | | | |
| | 2026 | | 2025 |
| | (in £ millions) | ||
Cash flow from operating activities | | | | |
Cash generated from operations | 216.2 | 107.5 | ||
Interest paid | (38.9) | (37.2) | ||
Interest received | 2.1 | 3.4 | ||
Tax paid | (0.7) | (1.0) | ||
Net cash inflow from operating activities | 178.7 | 72.7 | ||
Cash flow from investing activities | | | ||
Payments for property, plant & equipment | (85.9) | (44.7) | ||
Payments for intangible assets | (292.3) | (278.8) | ||
Proceeds from sale of intangible assets | 148.6 | 48.8 | ||
Net cash outflow from investing activities | (229.6) | (274.7) | ||
Cash flow from financing activities | | | ||
Proceeds from revolving facility | 225.0 | 230.0 | ||
Repayment of revolving facility | | (275.0) | | (100.0) |
Proceeds from refinanced senior secured notes | | 414.4 | | - |
Repayment of refinanced senior secured notes | | (320.2) | | - |
Proceeds from issue of shares | | - | | 80.0 |
Principal elements of lease payments | (1.7) | (0.4) | ||
Debt issue costs paid | | (7.2) | | - |
Net cash inflow from financing activities | 35.3 | 209.6 | ||
Net (decrease)/increase in cash and cash equivalents(1) | (15.6) | 7.6 | ||
(1) | Excluding the effects of exchange rate ranges on cash and cash equivalents |
Net cash inflow from operating activities
Cash generated from operations represents our operating results and net movements in our working capital. Our working capital is generally impacted by the timing of cash received from the sale of tickets and hospitality and other matchday revenues, broadcasting revenue from the Premier League and UEFA and commercial revenue. Cash generated from operations for the year ended 30 June 2026 was £216.2 million, an increase of £108.7 million from £107.5 million for the year ended 30 June 2025.
Additional changes in net cash inflow from operating activities generally reflect our finance costs. We currently pay fixed rates of interest on our senior secured notes and variable rates of interest on our secured term loan facility and revolving facility. Interest paid was £38.9 million for the year ended 30 June 2026, broadly in line with the year ended 30 June 2025. Interest on our senior secured notes is normally paid semi-annually, in June and December.
Net cash inflow from operating activities was £178.7 million for the year ended 30 June 2026, an increase of £106.0 million compared to a net cash inflow of £72.7 million for the year ended 30 June 2025.
Net cash outflow from investing activities
Capital expenditure for the acquisition of intangible assets as well as for improvements to property, principally at Old Trafford and Carrington, are funded through cash flow generated from operations, proceeds from the sale of intangible assets and, if necessary, from our revolving facility. Capital expenditure on the acquisition, disposal and trading of intangible assets tends to vary significantly from year to year depending on the requirements of our men's first team, overall availability of players, our assessment of their relative value and competitive demand for players from other clubs. By contrast, capital expenditure on the purchase of property, plant and equipment tends to remain relatively stable as we continue to make improvements at Old Trafford and Carrington. The year ended 30 June 2025 saw unusually high capital expenditure, as part of our investment in a new, world class, men's first team facility at our Carrington training centre.
Net cash outflow from investing activities for the year ended 30 June 2026 was £229.6 million, a decrease of £45.1 million from £274.7 million for the year ended 30 June 2025. This decrease was primarily due to cash received from transfer receivable financing transactions implemented in the year ended 30 June 2026, combined with stronger contractual transfer receivable cash flows received, partly offset by expenditure in relation to the acquisition of land in conjunction with our ambition to build a proposed new 100,000 seater stadium.
Net cash inflow from financing activities
Net cash inflow from financing activities for the year ended 30 June 2026 was £35.3 million compared to net cash inflow of £209.6 million for the year ended 30 June 2025. This is due to net proceeds, including issue costs, of £89.5 million arising from the refinancing of our Senior Secured Notes, partially offset by net repayments on our revolving facility of £50.0 million.
During the year ended 30 June 2025, we received £80.0 million of proceeds from the issuance of Class A and Class B ordinary shares in connection with the Trawlers Transaction, in addition to a net drawdown on our revolving facility of £130.0 million.
Indebtedness
Our primary sources of indebtedness consist of our senior secured notes, our secured term loan facility and our revolving facility. As part of the security for our senior secured notes, our secured term loan facility and our revolving facility, substantially all of our assets are subject to liens and mortgages.
Description of principal indebtedness
Senior secured notes
On 10 June 2026, our wholly-owned subsidiary, Manchester United Football Club Limited, issued $550.0 million in aggregate principal amount of 5.36% senior secured notes (which we refer to throughout this Annual Report as the "senior secured notes"). As of 30 June 2026, the sterling equivalent of £409.0 million (net of unamortized issue costs of £5.5 million) was outstanding. The outstanding principal amount was $550.0 million. The senior secured notes mature on 10 June 2031.
The senior secured notes are guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited and MU Finance Limited and secured against substantially all of the assets of those entities and Manchester United Football Club Limited. These entities are wholly-owned subsidiaries of Manchester United plc.
The note purchase agreement governing the senior secured notes contains a financial maintenance covenant requiring us to maintain consolidated profit for the period before depreciation, amortization of, and profit/(loss) on disposal of, intangible assets, exceptional items, net finance costs, and tax ("EBITDA") of not less than £125 million for each 12 month testing period. We are able to claim certain dispensations from complying with the consolidated EBITDA floor including up to twice (in non-consecutive financial years) during the life of the senior secured notes if we fail to qualify for the first round group stages (or its equivalent from time to time) of the Champions League. The impact of IFRS 16 is excluded for the purpose of covenant compliance testing. The covenant is tested on a quarterly basis and we were in compliance with the covenant for each quarter throughout the financial year.
The note purchase agreement governing the senior secured notes contains events of default typical for securities of this type, as well as customary covenants and restrictions on the activities of Red Football Limited and each of Red Football Limited's subsidiaries, including, but not limited to, the incurrence of additional indebtedness; dividends or distributions in respect of capital stock or certain other restricted payments or investments; entering into agreements that restrict distributions from restricted subsidiaries; the sale or disposal of assets, including capital stock of restricted subsidiaries; transactions with affiliates; the incurrence of liens; and mergers, consolidations or the sale of substantially all of Red Football Limited's assets. The covenants in the note purchase agreement governing the senior secured notes are subject to certain thresholds and exceptions described in the note purchase agreement governing the senior secured notes.
The senior secured notes may be redeemed in part, in an amount not less than 5% of the aggregate principal amount of the senior secured notes then outstanding, or in full, at any time at 100% of the principal amount plus a "make-whole" premium of an amount equal to the discounted value (based on the US Treasury rate) of the remaining interest payments due on the senior secured notes up to 10 June 2031. There is no "make-whole" premium payable if the senior secured notes are redeemed after 10 June 2029, subject to certain conditions being met.
The senior secured notes were refinanced in June 2026, increasing the principal amount from $425.0 million to $550.0 million and extending the maturity date from 25 June 2027 to 10 June 2031. As part of this transaction, proceeds were received in relation to the new senior secured notes on 10 June 2026 and the previous senior secured notes were repaid in full on 12 June 2026. We did not incur any early repayment charges or make-whole payments. Further detail is provided in the Consolidated Statement of Cash Flows, included in this annual report.
Secured term loan facility
Our wholly-owned subsidiary, Manchester United Football Club Limited, has a secured term loan facility with Bank of America Europe Designated Activity Company as lender. As of 30 June 2026, the sterling equivalent of £168.6 million (net of unamortized issue costs of £0.9 million) was outstanding. The outstanding principal amount was $225.0 million. The remaining balance of the secured term loan facility is repayable on 10 June 2031, although the Group has the option to repay the secured term loan facility at any time before then. On 10 June 2026, the maturity of the secured term loan facility was extended from 6 August 2029 to 10 June 2031, consistent with the senior secured notes.
Loans under the secured term loan facility bear interest at a rate per annum equal to the US dollar Secured Overnight Financing Rate ("SOFR") plus a credit adjustment spread (provided that if the rate is less than zero, SOFR shall be deemed to be zero) plus the applicable margin. The applicable margin, if no event of default has occurred and is continuing, means the following:
| | |
| | Margin % |
Total net leverage ratio (as defined in the secured term loan facility agreement) | | (per annum) |
Greater than 3.5 | 1.75 | |
Greater than 2.0 but less than or equal to 3.5 | 1.50 | |
Less than or equal to 2.0 | 1.25 |
While any event of default is continuing, the applicable margin shall be the highest level set forth above.
Our secured term loan facility is guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited and secured against substantially all of the assets of those entities. These entities are wholly-owned subsidiaries of Manchester United plc.
The secured term loan facility contains a financial maintenance covenant consistent with the senior secured notes as detailed above.
Our secured term loan facility contains events of default typical in facilities of this type, as well as typical covenants including restrictions on incurring additional indebtedness, paying dividends or making other distributions or repurchasing or redeeming our stock, selling assets, including capital stock of restricted subsidiaries, entering into agreements restricting our subsidiaries' ability to pay dividends, consolidating, merging, selling or otherwise disposing of all or substantially all of our assets, entering into sale and leaseback transactions, entering into transactions with our affiliates and incurring liens. Certain events of default and covenants in the secured term loan facility are subject to certain thresholds and exceptions described in the agreement governing the secured term loan facility.
Revolving facility
In July 2025, we amended our revolving facilities by consolidating all revolving facilities into a single syndicate, provided by our existing lenders, Bank of America, NatWest and Santander, alongside HSBC as a new entrant (the "new revolving facility"). The new revolving facility expires on 31 December 2029, with maximum capacity of £400.0 million, following a further upsize of £50.0 million in February 2026. As of the date of this report, we had £200.0 million in outstanding loans and £200.0 million in borrowing capacity under our new revolving facility.
Loans under the new revolving facility attract interest at a rate per annum equal to SONIA plus a credit adjustment spread (or in relation to a loan in Euros, EURIBOR, or in relation to a loan in USD, SOFR plus a credit adjustment spread) (provided that if that rate is less than zero, SONIA or, as the case may be, EURIBOR or SOFR (as applicable) shall be deemed to be zero) plus the applicable margin. The applicable margin, if no event of default has occurred and is continuing, means the following:
| | |
| | Margin % |
Total net leverage ratio (as defined in the new revolving facility agreement) | | (per annum) |
Greater than 3.5 | 1.75 | |
Greater than 2.0 but less than or equal to 3.5 | 1.50 | |
Less than or equal to 2.0 | 1.25 |
While any event of default is continuing, the applicable margin shall be the highest level set forth above.
A commitment fee is payable on the available but undrawn amount of the new revolving facility, at a rate equal to 35% per annum of the applicable margin.
Our new revolving facility is guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited and secured against substantially all of the assets of those entities. These entities are wholly-owned subsidiaries of Manchester United plc.
In addition to the general covenants described below, the new revolving facility contains a financial maintenance covenant consistent with the senior secured notes as detailed above.
Our new revolving facility contains events of default typical in facilities of this type, as well as typical covenants including restrictions on incurring additional indebtedness, paying dividends or making other distributions or repurchasing or redeeming our stock, making investments, selling assets, including capital stock of restricted subsidiaries, entering into agreements restricting our subsidiaries' ability to pay dividends, consolidating, merging, selling or otherwise disposing of all or substantially all of our assets, entering into sale and leaseback transactions, entering into transactions with our affiliates and incurring liens. Certain events of default and covenants in the new revolving facility are subject to certain thresholds and exceptions described in the agreement governing the new revolving facility.
As of 30 June 2026, we were in compliance with all covenants under our debt facilities.
Off balance sheet arrangements
Transfer fees payable
Under the terms of certain contracts with other football clubs in respect of player transfers, additional amounts would be payable by us if certain specific performance conditions are met. As noted above, we estimate the value of any contingent consideration at the date of acquisition based on the probability of conditions being met and monitor this on an ongoing basis. The maximum additional amount that could be payable as of 30 June 2026 is £122.8 million.
Transfer fees receivable
Similarly, under the terms of contracts with other football clubs for player transfers, additional amounts would be payable to us if certain specific performance conditions are met. In accordance with the recognition criteria for contingent assets, such amounts are only disclosed by the Company when probable and recognized when virtually certain. As of 30 June 2026, we believe receipt of £nil to be probable.
Other commitments
In the ordinary course of business, we enter into capital commitments. These transactions are recognized in the consolidated financial statements in accordance with IFRS, as issued by the IASB, and are more fully disclosed therein.
As of 30 June 2026, we had not entered into any other off-balance sheet transactions.
C. | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. |
We do not currently have, and have not had during the past three years, any research and development policies in place. See "Item 4. Information on the Company - Intellectual Property" for information about our intellectual property and licenses.
D. | TREND INFORMATION |
Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events since 30 June 2026 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
E. | CRITICAL ACCOUNTING ESTIMATES |
The preparation of our financial information requires management to make estimates, judgments and assumptions concerning the future. Estimates, judgments and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.
For a summary of all of our significant accounting policies, see Note 2 to our audited consolidated financial statements as of 30 June 2026 and 30 June 2025 and for the years ended 30 June 2026, 2025 and 2024 included elsewhere in this Annual Report.
We believe that the following accounting policies reflect the most critical estimates and assumptions and are significant to the consolidated financial statements.
We do not consider there to be any significant judgments in the preparation of the consolidated financial statements.
Recognition of revenue
Commercial
Commercial revenue (whether settled in cash or value in kind) comprises revenue receivable from the exploitation of the Manchester United brand through sponsorship and other commercial agreements, including minimum guaranteed revenue, revenue receivable from retailing Manchester United branded merchandise in the United Kingdom and licensing the manufacture, distribution and sale of such goods globally, and fees for the Manchester United men's first team undertaking tours.
A number of our commercial contracts contain significant estimates in relation to our allocation and recognition of revenue in line with performance obligations. Minimum guaranteed revenue is recognized over the term of the commercial agreement in line with the performance obligations included within the contract and based on the sponsorship benefits enjoyed by the individual sponsor. In instances where the sponsorship rights remain the same over the duration of the contract, revenue is recognized as performance obligations are satisfied evenly over time (i.e. on a straight-line basis).
In July 2023, we signed a 10-year extension to our agreement with adidas which began in August 2015 and now terminates in June 2035. The minimum guarantee payable over the term of this extended agreement is £750 million per the original term and an additional £900 million due under the extension, resulting in a total of £1,650 million, subject to certain adjustments. Payments due in a particular year may increase if the club's men's or women's first teams win the Premier League or Women's Super League, respectively, FA Cup or continental competitions with the maximum possible increase being £4.4 million per annum. Payments may decrease if the men's first team fails to participate in the UEFA Champions League. Under the extended term, the agreement contains a clause to state that a £10 million deduction will be applied for each year of non-participation in the UEFA Champions League, commencing from the 2025/26 season. Our men's first team did not qualify to participate in the 2025/26 UEFA Champions League resulting in a £10 million deduction to the contract price. Participation in the UEFA Champions League is typically secured via a top 4 finish in the Premier League or winning the UEFA Europa League, and revenue is recognized based on management's estimate of how many non-participation events will occur over the life of the contract. In line with IFRS 15, this estimate is considered at each reporting date. The total revenue of this contract, including the impact of any estimated deduction in respect of the Champions League clause, is recognized evenly over the life of the contract and the impact of changing the estimated deduction by one year on revenue recognized in any one financial year is £0.8 million.
Broadcasting and Matchday
For our accounting policies relating to Broadcasting revenue and Matchday revenue, which management does not consider to involve critical estimates and judgments, see Notes 4.3(ii) and (iii) to our audited consolidated financial statements as of 30 June 2026 and 2025 and for the years ended 30 June 2026, 2025 and 2024 included elsewhere in this Annual Report.
Value of intangible assets - registrations
The costs associated with the acquisition of players' and key football management staff registrations are capitalized as intangible assets at the value of the consideration payable, including an estimate of the value of any contingent consideration based on probability of payment being made at the balance sheet date. Subsequent reassessments of the amount of contingent consideration payable are also included in the cost of the individual's registration. The estimate of the value of the contingent consideration payable requires management to assess the likelihood of specific performance conditions being met which would trigger the payment of the contingent consideration such as the number of player appearances. This assessment is carried out on an individual basis. Costs associated with the acquisition of players' and key football management staff registrations include transfer fees, Premier League levy fees, agents' fees and other directly attributable costs. These costs are amortized over the period covered by the individual's contract. To the extent that an individual's contract is extended, the remaining book value is amortized over the remaining revised contract life. See "B. Liquidity and Capital Resources - Off Balance Sheet Arrangements".
Recognition of deferred tax assets
We recognize deferred tax effects of temporary differences between the financial statement carrying amounts and the tax basis of our assets and liabilities.
Deferred tax assets are recognized only to the extent that it is probable that the associated deductions will be available for use against future profits and that there will be sufficient future taxable profit available against which the temporary differences can be utilized, provided the asset can be reliably quantified. In estimating future taxable profit, management use "base case" approved forecasts which incorporate a number of assumptions, including a prudent level of future uncontracted revenue in the forecast period. In arriving at a judgment in relation to the recognition of deferred tax assets, management considers the regulations applicable to tax and advice on their interpretation. Future taxable income may be higher or lower than estimates made when determining whether it is appropriate to record a tax asset and the amount to be recorded. Furthermore, changes in the legislative framework or applicable tax case law may result in management reassessing the recognition of deferred tax assets in future periods.
Recognition of tax related provisions
The Group is subject to a number of ongoing player related tax enquiries with HMRC, and management regularly estimates the expected amounts payable as a result of these enquiries. Provisions are recognized based on management's best estimate at the end of the reporting period of the probable future cash flows required to settle future liabilities which by their nature are uncertain. Management considers both the facts and evidence of each case on an individual basis, combined with our knowledge and experience in similar matters in estimating the value of these provisions. These provisions may change over time as a result of developments in the enquiries, additional evidence, or changes in precedent from other similar cases in the industry. The timing of these expected outflows is also by its nature uncertain and are therefore recognized based on management's best estimate.