What happens when a moveable object meets a stoppable force? Man United’s pitiful Europa League final defeat to Tottenham answered the question and leaves the Red Devils facing financial hardship.
United were arguably the better of the two teams on the night, though it was an extraordinarily low bar. This was a match which stunk of 17th vs 16th place in the Premier League, not the fourth-richest team in the world against the ninth-richest.
As Sir Jim Ratcliffe handed out silver medals to Ruben Amorim and his squad of overpaid, underperformers in Bilbao, the Ineos supremo might have been wishing he’d just stuck to petrochemicals.
Photo by Chris Brunskill/Fantasista/Getty Images
Photo by Chris Brunskill/Fantasista/Getty Images
Unlike football finance, petrochemicals are predictable. Historically, there haven’t been gigantic revenue lurches from one year to the next in that industry. Yes, Ineos are struggling at present but that is largely down to geopolitical factors, as well as Ratcliffe’s misadventures in the off-road vehicle industry.
Incidentally, last night’s Europa League final opponents Tottenham are set to receive millions of pounds after Ineos Grenadier, the 4×4 car company which is a personal passion project of Ratcliffe’s, asked to terminate their sponsorship deal with the club early.
That partnership was struck before Ineos bought their stake in United and is emblematic of the firm’s profligacy, as well perhaps of Ratcliffe’s personal shortcomings.
Diagram showing the ownership and voting structure of Manchester United, broken down between Ineos and Sir Jim Ratcliffe, the Glazers, and the NYSE shareholders
Manchester United ownership diagram Credit: Adam Williams / United in Focus / GRV Media
After the Europa League defeat, it will be morbidly fascinating to see whether the 72-year-old is capable of change or whether he will double down on his programme of job cuts, cost optimisations and generally tight-fistedness that surely makes even Daniel Levy, his opposite number at Spurs, wince.
For too long, United have subsisted on a financial diet of ham-fisted brand tie-ins, the loyalty of their fanbase and a Profit and Sustainability Rules (PSR) system that favours them implicitly.
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They have somehow conspired to squander all of those advantages. Stasis – in terms of revenue, commercial growth and the Man United brand – has turned into regression.
Last night’s embarrassment at San Mames might have been the ultimate day of reckoning.
Manchester United in deep financial trouble after Europa League final defeat
Really, the Europa League trophy and a big party in the Basque Country for a fanbase who have suffered all season should have been all that was on the line last night.
But the pre and post-match vox pops in Bilbao demonstrated that supporters were all too aware of what was at stake financially for United.
There will be no European football of any kind next season for the Red Devils for the first time since 2014-15 and only the second time since English clubs were banned from Europe in the late 1980s.
Had United won and qualified for the Champions League next season, they would have had:
An extra £5m in Europa League prize money
Bare minimum of 2025-26 £55m in Champions League revenue
Up to an extra £100m in performance-related UEFA prize money
At least four extra matchdays at Old Trafford, worth up to £22m in total
Potential for three more knockout matches of matchday income, worth up to £25m
£3-4m for UEFA Super Cup revenue
Potential qualification for 2029 Club World Cup, worth £50-100m
Reinstatement of full basic rate from sponsors like Adidas, worth estimated £15m total
Retail boom, worth estimated £2-3m
The Europa League final was billed as a £100m game by many but, in reality, it could have been worth so much more.
For a club that lost £113m in the last financial year, it’s an absolute gut punch.
Graph showing Manchester United's pre-tax profit and loss account from 2013-14 to 2023-24
Manchester United profit and loss account over the last 10 years Credit: Adam Williams/United in Focus/GRV Media
And with the Premier League’s PSR enforcers lurking and a summer rebuild needed to turn the tide, United have skewered themselves.
It is worth noting that United would also have shelled out millions in bonuses had they qualified for the Champions League.
That would have eaten into their earnings but on a net basis, they would still be in giant profit.
Where does this leave Ineos ahead of summer transfer window
As far as participation in the Champions League goes, if you’re not at the table, you’re probably on the menu.
Next season, at least nine, possibly 10 Premier League clubs will play in Europe. That’s nine or 10 rivals who are all benefiting from UEFA revenue while United aren’t, nine or 10 rivals who have a tacit advantage over the Red Devils in the transfer market.
Club European competition(s)
Liverpool Champions League
Arsenal Champions League
Tottenham Champions League
Man City Champions League / Europa League
Newcastle Champions League / Europa League / Conference League
Chelsea Champions League / Europa League / Conference League
Aston Villa Champions League / Europa League / Conference League
Nottingham Forest Champions League / Europa League / Conference League
Crystal Palace Europa League
Brighton/Brentford Conference League (if Chelsea win Conference League final and finish 6th)
The coming summer transfer window was always going to see a great deal of churn in the Man United squad, but last night’s feckless defeat has amplified the magnitude of the project.
The club will have drawn up two budgets once it became clear that the success of their season hinged on the Europa League final, one for if they had won it and another for if they hadn’t.
Now the worst has happened, United have two interwoven problems that will affect Ruben Amorim’s summer transfer budget:
Profit and Sustainability Rules
Access to cash
Man United will struggle to comply with PSR in 2024-25 with no European football
The Premier League and UEFA assess PSR (FFP, in old money) in rolling three-year windows, while UEFA’s new squad cost ratio rule is applied on an annual basis over a calendar year.
For the three-year assessment period up until the end of 2023-24, United only narrowly swerved a Premier League PSR breach thanks to exceptional costs in the 2021-22, when the club was still suffering in the fallout of the COVID-19 pandemic.
Infographic explaining Profit and Sustainability Rules (PSR), the system which used to be called Financial Fair Play (FFP).
Profit and Sustainability Rules infographic Credit: Adam Williams / United in Focus / GRV Media
This season, statements in the club’s quarterly accounts have maintained that they are on track to comply with domestic and European PSR/FFP.
In 2025-26, however, things are going to get much more challenging.
The 2024-25 accounts will likely showcase narrower losses than the previous financial year.
The sales of academy products Scott McTominay and Mason Greenwood, which count as ‘pure profit’ in PSR terms, as well as a reduction in the wage bill will offset the £200m or so they spent in the transfer market, of which only £40m hits the balance sheet this season.
But even with United projecting revenues of £650m for the season, significant operating profits will likely see the club post an overall loss in the region of £60m.
Factoring in last season’s £113m loss, adding back PSR-exempt expenses like youth, infrastructure and women’s team spending and looking at the club’s operating losses, they likely have a £100m-plus hole to fill to comply with Premier League PSR next season.
So before United can even think about buying new players, mass sales will be necessary.
Expect to see homegrown players with no amortised book value – Alejandro Garnacho, Kobbie Mainoo and Marcus Rashford – leave the club this summer. Their sales are more efficient in PSR terms.
Infographic explaining amortisation in football finance, with United in Focus logo
Amortisation in football finance infographic Credit: Adam Williams/United in Focus/GRV Media
United will also be keen to trim their wage bill, which was £365m last term.
However, selling big earners like Anthony and Rasmus Hojlund will barely help in PSR terms and could even negatively impact the final calculation given their amortised book values and the improbability that the club will be able to recoup decent fees for them.
Ratcliffe could also consider exploiting a loophole in the rules, like Chelsea have with the intra-company sales of their women’s team and two hotels at Stamford Bridge. That’s a one-time-only measure, however, and relies on the Premier League approving any would-be deal for fair market value.
Cash flow: Sir Jim Ratcliffe needs to inject more money
The reason that United will consider selling players who might not necessarily benefit the PSR calculation outside the shedding of their wages is cash flow.
PSR and cash flow are distinct from one another. PSR is based on the profit-and-loss account, which includes non-cash expenses like amortisation and depreciation and is not a reflection of the actual flow of cash in and out of the business.
United had £96m of cash in the bank as per their last quarterly report, but that will have decreased in the second half of the season when revenues are low.
The club also owes hundreds of millions in transfer instalments, while interest payment, wages and other running costs mean that outgoings are higher than incomings.
They have £548m worth of debt due for repayment in 2027 too, which they will probably have to roll over at double the interest rate.
These are all huge drains on resources. The Europa League final defeat means Champions League cash won’t cover them.
Photo by Jonathan Moscrop/Getty Images
Photo by Jonathan Moscrop/Getty Images
So, Ratcliffe needs to find some cold, hard cash from somewhere. This issue is even more pressing than PSR. Ineos have the following options:
Sell players
Cut the wage bill
More job cuts and ticket price increases
Loan money to the club, thereby increasing debt
Convert debt to equity out of his own pocket
Use more of United’s revolving credit facility
Sell a stake in the club to a third party
Another New York Stock Exchange listing
Almost £95m wiped off United’s share price after Tottenham loss
In many ways, Ratcliffe is a symptom of the Glazer disease at Old Trafford.
He is a convenient patsy for the American family, whose leveraged buyout and subsequent absenteeism has crippled the club with debt and seen costs spiral out of control in lieu of a coherent sporting strategy.
Back in 2012, the Glazers listed Man United on the New York Stock Exchange, just seven years after they had de-listed the club from the London Stock Exchange following their takeover.
Chart showing Manchester United's share price on the New York Stock Exchange, with United in Focus logo
Manchester United share price Credit: Adam Williams/United in Focus/GRV Media
The reason for the U-turn? They needed to raise capital to pay down the enormous debt which they themselves had loaded onto the club with the LBO.
In the end, they paid off a chunk of the debt and trousered some of the cash for themselves. The debt has since spiralled once more.
Manchester United gross debt chart from the Glazers' leveraged buyout to present day
Manchester United’s gross debt over the years Credit: Adam Williams/United in Focus/GRV Media
13 years on, the share price is lower than at the initial public offering and the reporting requirements for a publicly listed company – United issue financial statements four times as often and in far more detail than the 19 other Premier League clubs – are a major headache for the ownership.
Also, the share price is a numerical reminder of how financial performance is indexed to results on the pitch, contrary to what Ed Woodward said about United’s commercial performance back in 2013.
After last night’s defeat to Spurs, United’s share price fell by five per cent, wiping nearly £95m off the total value of the shares in circulation.
It’s not hard to see why the club’s biggest institutional shareholders, Ariel Investments and Lindsell Train, have slashed their stakes dramatically in recent years.