Sacking Jose Mourinho before Christmas cost Manchester United £19.6million, the Premier League club have revealed in their second-quarter financial results.
That sum, which is listed under “exceptional items” in the accounts, includes pay-outs for the five members of his staff who left with him on December 18.
It is less than was initially reported in some quarters but four times the amount United had to pay predecessors David Moyes and Louis van Gaal when they were fired in 2014 and 2016 respectively.
The severance pay, however, is the only bad grade in an otherwise glowing report, with the club posting record revenues of £208.6million for the quarter, which translate into earnings before interest, tax, depreciation and amortisation (EBITDA) of £104.3million and an operating profit of £44million.
The club’s wage bill for the quarter, which ended on December 31, rose to £77.9million, an increase of £8.2million (11.8 per cent) on the corresponding period a year ago.
Commercial revenue, thanks to new sponsors such as Remington, inched up to £65.9million, although the retail and merchandising part of that equation fell slightly, and matchday proceeds increased by £2.1million (5.7 per cent) on 12 months ago, primarily due to playing one more Champions League game at home.
But the real boost came from broadcasting, up £28.5million (37.9 per cent) to £103.7million, as UEFA’s new Champions League broadcasting deal really started to kick in.
In a statement, executive vice-chairman Ed Woodward said: “The appointment of Ole (Gunnar Solskjaer) and Mike (Phelan) as caretaker manager and assistant manager has had a positive impact throughout the club.
“We are delighted with the improvement in the team’s performances since December and we look forward to a strong finish to the 18/19 season.”
Mourinho was sacked shortly after United lost 3-1 to Liverpool, the fifth league defeat of the season and a result which left the Old Trafford club 19 points behind their fierce rivals from Merseyside.
Since then, however, they have won eight of nine Premier League games – drawing the other – and have returned to the top four, leapfrogging Arsenal and Chelsea. Solskjaer earned the league’s manager-of-the-month prize for January.
The Norwegian’s remarkable run came to an end on Tuesday, when United were beaten 2-0 at home in the Champions League by Paris St Germain – but the mood at Old Trafford is undoubtedly brighter than it was under Mourinho.
Another reflection of that can be seen in the club’s share price, which hit 17.28 US dollars (£13.49) in New York in December but is now heading back towards 20 US dollars (£15.60).
On a conference call with investors, Woodward paid tribute to former youth coach Eric Harrison, who died on Wednesday evening aged 81, describing him “as the embodiment of the club’s commitment to youth”.
Woodward was also asked about the club’s search for a permanent replacement for Mourinho, as Solskjaer and Phelan have only been signed up until the end of the season, but the vice-chairman said he did not want to get into a running commentary on that subject and the club would make an announcement “when it had something to say”.
He was slightly more forthcoming on the prospect of United appointing their first director of football, saying the club was “continually assessing our football structures” and had already made huge investments behind the scenes in the academy, recruitment and sports science.
Joining him on the call were group managing director Richard Arnold and chief financial officer Cliff Baty, who raced through the financial report’s headline figures.
Arnold spoke at some length about United’s investment in China, where the club will be opening several “entertainment and experience centres” by the end of 2020 to cement their position as the nation’s favourite club.
He underlined the significance of this by pointing out that China was now the Premier League’s most valuable overseas broadcasting market.
Arnold also talked about United’s app, which he said was “number one globally”, the club’s esports ventures and the summer tours to Australia and Asia, where they will play in the International Champions Cup. It has been reported that Singapore will stage the ICC in 2019.
One thing that was not discussed on the call, and only mentioned briefly in the report, was the debt United’s owners the Glazer family placed on the balance sheet when they controversially bought the club in 2005. That figure, which is effectively the remainder of the loans the Americans borrowed to buy the club, currently stands at £317.7million.
