Manchester United have suffered their biggest financial loss in nearly eight years as a result of Donald Trump’s new tax reforms in America.
United were knocked into the red by a non-cash write-off of £48.8million, leading to an overall loss of £29m for the six months to December 31, according to the club’s latest financial figures announced on Thursday.
It represents United’s worst results since a third-quarter loss of £65.8m in 2010. In the same period last year, they had made a profit of £18.7m.
Manchester United blame President Trump for their biggest financial loss in nearly eight years
Trump’s US tax reforms forced the Premier League outfit to write off £48.8m
The club blamed it on Trump’s tax cuts which have slashed America’s corporation tax rate from among the highest in the west to one of the lowest as the US president tries to get the country’s economy moving.
It has affected many companies worldwide, even those like United who only pay a fraction of their taxes in the US.
The club’s chief financial officer, Cliff Batey, insisted that it is a one-off charge that has pushed United into a loss but will have no other impact.
‘It should be beneficial to the club in the long-term,’ said Batey.
It represents United’s worst results since a third-quarter loss of £65.8m in 2010
‘It’s important to reiterate that it’s a non-cash accounting charge only which has no impact on our financial competitiveness or our ability to meet Financial Fair Play regulations.’ United’s overall revenue for the quarter rose four per cent to £163.9m, although commercial, sponsorship and matchday revenue were all slightly down.
The club spent £69.6m on wages and benefits in the final three months of 2017, up £6m on a year earlier due mainly to player bonuses for reaching the Champions League.
Old Trafford chief Ed Woodward claimed that United’s ‘solid business model’ has enabled them to offer new signing Alexis Sanchez a total of £600,000-a-week, and extend manager Jose Mourinho’s contract.
Woodward revealed that the Sanchez deal was already paying off after the Chile star set a new record for shirt sales by a January signing – treble the previous best set by Juan Mata in 2014.
New signing Alexis Sanchez has set a new record for shirt sales by a January transfer
The announcement of Sanchez’s move from Arsenal also eclipsed Neymar’s transfer from Barcelona to Paris Saint-Germain on social media.
He said: ‘It was the biggest United post on Instagram with two million likes and comments, the most shared United Facebook post ever, and the most retweeted United post ever – #alexis7 was the number one trending topic on Twitter worldwide.
‘To put that in context, the announcement generated 75 per cent more interaction than the announcement of the sale of the world’s most expensive player last summer when Neymar moved from Barcelona to PSG.’