Profits double at Manchester United while bill for players' wages hits £34m

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The Independent Online

Manchester United has revealed that player wages soared by 40 per cent last year after it signed top players such as Roy Keane and Paul Scholes on new contracts.

United's wage bill for the six months to 31 January rose to £34m, equivalent to £1.3m a week.

The club is also hoping to sign David Beckham on a new contract in the next few weeks on a deal that could earn the United star £100,000 a week.

Further wage pressure will come from a new, multi-million pound contract with the club's manager Sir Alex Ferguson to remain in the post for the next three years.

Total wages for the year as a whole are expected to be 50 per cent of the group's turnover, the company said. This compares with a 39 per cent ratio last year.

United, toppled from the top of the Premiership by Liverpool at the weekend, said player wages would affect profits in the second half as would amortisation charges related to the way football clubs write down the value of players over the duration of their contracts. Another negative factor will be the phasing out of its sponsorship deal with Umbro as the group starts a new deal with Nike.

Despite the rising costs Manchester United's interim pre-tax profits almost doubled to £30m. This was helped by a net profit on player trading of £7.9m as the group sold Jaap Stam and Andy Cole. Amortisation costs will rise in the second half after the £50m spent on close season signings such as Ruud van Nistelrooy and Juan Sebastian Veron.

Andrew Lee, the leisure analyst at Dresdner Kleinwort Wasserstein, said he was maintaining his hold recommendation on the shares, which rose a penny to 125p, though there were concerns about player wages and the future of television rights. "The value of domestic rights has probably peaked though there should be some upside in the overseas rights where Manchester United would probably hope to get a larger slice of the proceeds," he said.

Chelsea Village, the holding company for Chelsea Football club, slipped out results at 5.45pm yesterday. The group recorded a loss of £4.1m after player trading.

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