Man U's cash reserves halved

LONDON -- Manchester United revealed the financial impact on Thursday of its early exit from the Champions League, with earnings dropping and cash reserves being halved in the first three months of the year.

United was deposed as Premier League champions by Manchester City on Sunday and eliminated from the lucrative Champions League at the group stage in December.

The quarterly accounts show that earnings for the club owned by the American Glazer family dipped by almost 10 percent year-on-year to $32.3 million and revenue dipped by six percent to $112.1 million.

United's cash reserves also dropped from $80 million at the end of 2011 to $41 million by March 31. The figure had stood at $238 million at the end of 2010.

"I do think everyone at the club, from (manager) Alex (Ferguson) down, agree we underperformed in Europe this year," United chief executive David Gill said earlier this week.

The 19-time English champions have been ranked football's most valuable club for eight years in a row by Forbes magazine, which valued them at $2.24 billion last month.

The club remains English football's biggest moneymaker, with enhanced sponsorship deals offsetting the drop in revenue from failing to advance further in the Champions League.

In fact, commercial revenue rose 15 percent year-on-year to $43.4 million and exceeded match-day revenue, including ticket sales, in the first three months of 2012.

"We should recognize we're a very successful club, one of the top three in terms of turnover in world football, and it generates a lot of cash to invest in players," Gill said. "We will continue to do so and our style is both buying players and giving youth a chance."

United continues to invest in developing Old Trafford and its training ground while spending more on its squad, with wages rising by 9 percent year-on-year to $178 million.

"This increase largely relates to growth in player remuneration, driven by new player acquisitions and further contractual negotiations together with increased costs and headcount arising from the continued growth in our sponsorship and commercial operations," United's quarterly report says.

The club's debt, resulting from the 2005 takeover by the Glazers, has been cut $673.8 million despite incurring $28.8 million in interest payments in three months.