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Oil’s $133 Billion Black Market

Oil’s $133 Billion Black Market

With oil prices back on…

Manchester United Posts Record Revenue Without Petrodollars

Manchester United

Manchester United has become the first British soccer club to surpass the half a million pound mark in annual revenue, according to its latest quarterly earnings report.

Some Red Devils supporters viewed the revenue gains as notable due to the lack of sponsorship from oil companies, unlike many other clubs, including crosstown rival Manchester City, which is run by the United Arab Emirates-based Abu Dhabi United Group (ADUG).

An October 2015 opinion piece in the Manchester Evening News, however, claims that teasing ManCity over the influx of petro-dollars belies the fact that the club turned over a profit seven years after having been purchased by ADUG.

Russia and Middle Eastern states have spent funds on other soccer clubs in Europe, such as the state-owned Qatar Airways sponsoring the jersey of storied Spanish side FC Barcelona. Chinese investment has also helped prop up European clubs in recent years including a minority stake in Champions League runners-up Atletico Madrid.

The influx of oil funds does occasionally have a price, however. English Premier League side Chelsea achieved a remarkable turnaround, on the field and off, after having been bought in 2003 by Roman Abramovich, a Russian billionaire whose wealth came primarily from the oil industry. Yet the club could see its bottom line being hit after Abramovich lost an estimated US$820 million in the first days of this year due to the low price of oil and Russia’s economic troubles.

As reported by Goal.com, the famed ManU posted earnings of US$684million (or £515.3 million) in the 2015-16 financial year. Related: Why Is Big Oil Backing Clinton Over Trump?

Revenue from match days grew to US$142 million, while commercial income spiked 36.3 percent to US$356 million. In addition, the club’s operating profit reached US$92 million after having increased annually by around 30 percent.

Apart from winning the FA Cup in 2015, the club’s triumphs in recent years have been few and far between in recent years and this has hurt their finances. Their debts have grown a mere two percent but the US$347 million deficit equals slightly more than half of the yearly earnings. Revenue was also lost from the lack of participation this year in the lucrative UEFA Champions League, paying off former head coach Louis van Gaal and replacing him with Jose Mourinho, and big money player signings including that of Paul Pogba.

By Erwin Cifuentes for Oilprice.com

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