High player costs hurt Manchester United profits

Manchester United (NYSE: MANU - news) has seen profits dip, as costs increase after returning to the Champions League.

The team blamed an increase in player wages as it posted adjusted earnings of £67.8m before interest, tax, depreciation and amortisation.

The figure, for the three months to the end of December, was down 1.7% on the same quarter in 2016.

Executive vice chairman Ed Woodward said the team's "solid business model" had still allowed it to "invest in the future of the club" by extending manager Jose Mourinho's contract as manager and acquiring Alexis Sanchez from Arsenal .

While revenue increased 3.8% to £163.9m in the same period - the second quarter of its 2017-18 financial year - salary expenses were 9.4% higher, at £69.9m.

Much of this increase is because players were paid more after the team secured a slot in the cash-rich Champions League for the current season, following a one-year absence.

Tax reforms by US President Donald Trump have also cost the team, which is controlled by the American Glazer family and listed on the New York Stock Exchange.

The US corporate tax rate was cut from 35% to 21% late last year and the changes forced Manchester United to make an accounting write-off of £48.8m.

Chief Financial Officer Cliff Baty said: "There will be no impact on our financial competitiveness nor our ability to meet Financial Fair Play regulations from the charge."

Meanwhile, bids for the domestic rights to broadcast Premier League matches are due to be submitted by Friday 9 February.

Sky (Frankfurt: 893517 - news) and BT currently share the rights in a three-year deal worth £5.14bn.