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Revenue from contracts with customers

6 Months Ended

Dec. 31, 2021

Revenue from contracts with customers

Revenue from contracts with customers

6 Revenue from contracts with customers

6.1 Disaggregation of revenue from contracts with customers

The principal activity of the Group is the operation of men’s and women’s professional football clubs. All of the activities of the Group support the operation of the football clubs and the success of the men’s first team in particular is critical to the on-going development of the Group. Consequently the chief operating decision maker (being the Board and executive officers of Manchester United plc) regards the Group as operating in one material segment, being the operation of professional football clubs.

All revenue derives from the Group’s principal activity in the United Kingdom. Revenue can be analysed into its three main components as follows:


		Three months ended				Six months ended
		31 December				31 December
		2021		2020		2021		2020
		£’000		£’000		£’000		£’000
Sponsorship		35,215		37,780		71,484		74,286
Retail, merchandising, apparel & product licensing		29,193		24,832		57,289		48,028
Commercial		64,408		62,612		128,773		122,314
Domestic competitions		46,383		51,706		69,262		87,989
European competitions		38,266		55,421		56,813		65,054
Other		1,764		1,577		3,680		3,259
Broadcasting		86,413		108,704		129,755		156,302
Matchday		34,619		1,534		53,373		3,206
		185,440		172,850		311,901		281,822

All non-current assets, other than US deferred tax assets, are held within the United Kingdom.

6 Revenue from contracts with customers (continued)

6.2 Assets and liabilities related to contracts with customers

Details of movements on assets related to contracts with customers are as follows:


		Current
		contract assets
		– accrued
		revenue
		£’000
At 1 July 2020		45,966
Recognized in revenue during the period		64,354
Cash received/amounts invoiced during the period		(44,525)
At 31 December 2020		65,795
Recognized in revenue during the period		37,563
Cash received/amounts invoiced during the period		(62,328)
Loss allowance		(486)
At 30 June 2021		40,544
Recognized in revenue during the period		66,055
Cash received/amounts invoiced during the period		(36,771)
At 31 December 2021		69,828

A contract asset (accrued revenue) is recognized if commercial, broadcasting or Matchday revenue performance obligations are satisfied prior to unconditional consideration being due under the contract.

The Group considered the current and expected future economic impact surrounding the COVID-19 pandemic and determined that there was no material impact on impairment of contract assets.

Details of movements on liabilities related to contracts with customers are as follows:


		Current		Non-current
		contract		contract		Total contract
		liabilities –		liabilities –		liabilities –
		deferred		deferred		deferred
		revenue		revenue		revenue
		£’000		£’000		£’000
At 1 July 2020		(171,574)		(18,759)		(190,333)
Recognized in revenue during the period		82,929		—		82,929
Cash received/amounts invoiced during the period		(43,815)		—		(43,815)
Reclassified to current during the period		(4,987)		4,987		—
At 31 December 2020		(137,447)		(13,772)		(151,219)
Recognized in revenue during the period		74,272		—		74,272
Cash received/amounts invoiced during the period		(63,979)		—		(63,979)
Reclassified to current during the period		9,170		(9,170)		—
At 30 June 2021		(117,984)		(22,942)		(140,926)
Recognized in revenue during the period		75,882		—		75,882
Cash received/amounts invoiced during the period		(115,497)		—		(115,497)
Reclassified to current during the period		1,668		(1,668)		—
At 31 December 2021		(155,931)		(24,610)		(180,541)

6 Revenue from contracts with customers (continued)

6.2 Assets and liabilities related to contracts with customers (continued)

Commercial, broadcasting and Matchday consideration which is received in advance of the performance obligation being satisfied is treated as a contract liability (deferred revenue). The deferred revenue is then recognized as revenue when the performance obligation is satisfied. The Group receives substantial amounts of deferred revenue prior to the previous financial year end which is then recognized as revenue throughout the current and, where applicable, future financial years.