Manchester United released their financial report for the final three months of 2017 on Thursday and the Premier League giants blamed a change in U.S. corporation tax as profits were hit.
President Donald Trump cut the corporate tax rate by 14 percent in December and United had to undertake an accounting write off of $48 million, while revenue for the quarter was up four percent to $228.6 million.
United are owned by billionaire American family the Glazers and are listed on the New York Stock Exchange.
In a conference call with investors, United’s chief financial officer Cliff Baty explained the implications in the tax changes on their finances.
“(The tax changes) should be beneficial to the club in the long term, however we are still working through the details of the potential impact of the more complex aspect of the reforms with our advisers,” Baty said. “This is a non-tax accounting charge only, which has no impact on our financial competitiveness nor our ability to meet Financial Fair Play regulations.”
In more positive news, United’s executive vice-chairman Ed Woodward revealed that Alexis Sanchez arrival in January has seen record shirt sales at the club and the Chilean smashed previous social media records.
“Alexis Sanchez has set a new January signing record in terms of shirt sales – three times that previous record,” Woodward said. “This trade generated some interesting social media stats. It was the biggest United post on Instagram with two million likes and comments, the most shared United Facebook post ever, the most retweeted United post ever and #Alexis7 was the number one trending topic on Twitter worldwide. To put all that into context, the announcement posts generated 75 per cent more interaction than the sale of the world’s most expensive player last summer when Neymar moved from Barcelona to PSG.”
So there you have it.
With United making Alexis Sanchez the highest-paid player in the Premier League at $489,000 per week, the investment already appears to be paying off with his popularity and the social reach of his arrival.
Still, it will be intriguing to see if the new U.S. tax laws continue to hit United hard in their next financial report.