The £33m operating profit Manchester United posted in their most recent financial report is a reflection of misguided cost-cutting that will hurt the club in the long run, says football finance expert Kieran Maguire.
Despite suffering their first defeat under the interim management of Michael Carrick at Newcastle earlier this week, United still have a three-point cushion in the race for the Champions League spots, which would significantly ease any anxieties about the financial situation at Old Trafford.
This season, 5th place in the Premier League will secure qualification by virtue of the impact that English clubs’ performances in Europe this season have had on UEFA’s association coefficient rankings.
Thanks to UEFA’s new format and revenue distribution system – which were both lobbied for hard by the Glazers – that will likely be worth £100m to United as a minimum in prize money and matchday income.
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In 2025-26, United have no European football of any description. And yet, the club’s latest accounts still project revenues of £640-660m, down only slightly from the club-record £667m they generated last term.
Meanwhile, EBITDA – earnings before interest, tax and non-cash expenses like depreciation and amortisation, a metric used in the finance biz as a rough proxy for the real-terms flow of money in and out of the business – is forecasted at £180-200m.
While revenue is slightly down, so too are operating expenses, with a £22.5m reduction on the same period last year contributing significantly to the £33m operating profit. The main driver of those savings was the ‘headcount reduction’ overseen by Sir Jim Ratcliffe and his enforcers in Manchester.
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This has been widely spun in the press as a vindication of the Ineos boss’s brutal job cuts and wider austerity across the business – slashing payments to ex-player charities and community spending, to name but two examples.
Fans of Manchester United display flags and banners during a sit-in protest against the Glazer's ownership of the club, organised by fan group 1958 after the Premier League match between Manchester United FC and Manchester City FC at Old Trafford on April 06, 2025 in Manchester, England.
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The reality, however, as University of Liverpool football finance lecturer Maguire explains, is more complex. And the next set of accounts, due to be released around the end of May, will likely give a more complete picture.
“Ruben Amorim’s pay-off will go through the Q3 figures, so that will mean they take a hit,” the Price of Football podcast host said in exclusive conversation with United in Focus.
“In terms of the wider headcount reduction, let’s say they get rid of 400 people on an average of £40,000 per year. That would save £16m for the year; that wouldn’t even pay Casemiro’s wage bill.
“Yes, there was an overall reduction in the wage bill, but some of their big payees are off-book: Rashford, Sancho, Hojlund. The total payroll costs are about £300m, so you’re reducing it by about four or five per cent.
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“The real reason for the reduction in the losses is matchday revenue. That was down by just two per cent despite playing 10 matches at home in the quarter compared to 15 the previous season. When you work out the yield per fan, per match, it’s increased significantly. That is because they are marginalising the fanbase, kicking them out of the places they have sat for years and replacing them with tourists.
“In terms of headcount, the measures have been draconian. In any case, I’m hearing that they are now re-hiring people because there are gaps, and Jim Ratcliffe doesn’t like using freelancers. They have lashed out and taken easy wins. There will be a reality check coming.”
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