United Count Cost Of Champions League Absence

Manchester United (NYSE: MANU - news) 's revenue fell by 10% in the first quarter of this season, as the club paid the price for its absence from the Champions League.

United failed to qualify for European competition for the first time in 18 years last season, causing significant reductions in broadcast, match-day and commercial income.

Revenue fell by £9.8m to £88.7m for the first three months of the financial year, with match-day income down 21.8% and broadcast earnings falling by 13%.

In a statement released to investors, the club said both falls were "primarily due to non-participation in the Champions League".

Commercial revenue also fell as a result, down by 5.2%, largely because of a reduction in the guaranteed income from the current kit deal with Nike (Sao Paolo: NIKE34.SA - news) .

Offsetting the reduction, player wages were down 6.6%, reflecting the fact the club did not have to pay bonuses for qualifying for European competition.

Club sources said the results were slightly ahead of market expectations, but they still underline the importance of a rapid return to the Champions League for a club still carrying £362m of debt, an increase of £1m on the previous quarter.

The figures also underlined the increasing importance of commercial income to the club. It accounted for 62% of total revenue in the last quarter, with broadcasting accounting for 19% and match-day revenue just 17%.

Under new manager Louis van Gaal, United are currently seventh, two points off the Champions League places but yet to demonstrate that a return to European competition is probable.

United spent £150m on players in the summer transfer window including a British record £62m on Angel di Maria, but executive vice chairman Ed Woodward does not envisage significant spending in January.

"We are not looking at the market for short-term fixes in January, however we do have summer targets and were any of them to become available in January we would move, but that is low probability," he said in a conference call with investors.

Woodward (NasdaqGS: WWD - news) also stressed he was confident about the possibility for United's commercial growth, particularly in the US, following a successful US tour this summer.

Despite the faltering on-field performance the club is confident that commercial income will continue to rise, largely because of new sponsorship deals that will begin next season.

United has signed a £750m 10-year deal with Adidas , and continues to pursue global sponsorship opportunities. Total revenue for the financial year is forecast to be £385m - £390m, down around £30m on last year.