Manchester United fell to defeat in the final of the Europa League on Wednesday evening
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Avram Glazer, co owner alongside Sir Jim Ratcliffe, owner of Ineos and co-owner of Manchester United
Avram Glazer, co owner alongside Sir Jim Ratcliffe, owner of Ineos and co-owner of Manchester United
(Image: Getty Images)
For Manchester United, Wednesday evening at the Estadio de San Mames could have brought about a silver lining to a dire season, one that would have allowed them to accelerate their plans for a rebuild.
But a 1-0 defeat to Premier League rivals Tottenham Hotspur, another club that needed the boost that a Europa League final success had to offer, meant that the Red Devils’ UEFA Champions League hopes disappeared, with Spurs instead punching their ticket to the league phase of next season’s competition.
That qualification has earned Spurs a lucrative sum to enable them to head into the summer transfer market with plenty more ammunition than they would have had otherwise. For United, a club that has an annual wage bill of £365m, one of the largest in the Premier League, and transfer debt of £331m, the third largest in the league, against transfer receivables of just £60m due, the loss in Spain will be impactful.
Qualification for the Champions League yields enormous success. With participation alone worth £15.6m and every victory and draw in the revamped competition’s league phase delivering an additional £1.7m and £580,000, just making it to the league phase can bring in, conservatively, around £20m, and that is before factoring in any progression to the knockout stages, where the money continues on a steep incline. The Champions League value pillar is more lucrative than that of the Europa League and is worth another £20m to clubs.
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Matchday revenue then plays another significant role. Playing in the league phase guarantees four home games for each team, adding an extra £17.2m for United. That means, conservatively, the club could have booked some £70m in Champions League-related revenue before even taking into account the potential for knockout qualification and more matchday revenue.
This isn’t the plan that club co-owner Sir Jim Ratcliffe had envisaged playing out when he paid £1.2bn for a 27.7% stake in the football club, complete with football strategy oversight, back in December of 2023.
Job cuts of 250 or more have painted a picture of a club that needs to address its cost base, and Ratcliffe has been candid about that. The way that the club approaches the transfer market this summer will also be instructive about how big a challenge Ratcliffe and club head coach Ruben Amorim face in turning around the tanker for next season. It will be a long process.
The era, for now at least, of United being at the table for the biggest deals and the biggest fees for the top talent is over. That has to be accepted. It is a club in decline, and this season should have shown club chiefs that they cannot simply trade on just being Manchester United.
Champions League qualification would have addressed some of what ails them, but not all of it, and questions still remain about just how much capital should be allocated to the transfer market to a manager who has so far endured a dismal record and faces starting next season already fighting for his Red Devils career so early on.
The club already face diminished revenue from the Premier League via its central funding. The club currently sit 16th, which would earn them £14m in merit payments. That is a sum £22.7m less than the £36.7m that they managed to achieve last year, and with the Europa League money that has been earned from this season, which includes matchday revenue attributable to the competition, standing at £65.7m, that will be absent from the forecasts for the next financial year.
The focus will be on driving down payroll and more aggressive player trading in terms of outgoings to try and claw back some of the deficit. It seems likely now, without the benefit of Champions League funds next season, and the diminished commercial revenues from Adidas by £10m as per the clause in their deal if United fail to make the Champions League two seasons in a row, that what happens in terms of incomings will be guided by who leaves Old Trafford, and that puts the club on the backfoot in the market. It’s unlikely the club will make early moves because they don’t have the financial flexibility to take on such risk without alighting themselves of some big earners for a profit.
These are tough times and Manchester United, and the impact of defeat last night in the face of what has been a dramatic competitive decline cannot be overstated. Ratcliffe has talked a good game about where he sees the club in the future, but that vision is further and further away with each missed opportunity. There is now little room for manoeuvre and where United find themselves in five years will be determined by how they manage to navigate the financial struggles of the present.