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Manchester United's co-owner Sir Jim Ratcliffe has overseen cutbacks Oli Scarff/AFP via Getty Images Manchester United still lead the way. Not in the manner they would like to, granted, but at least in terms of off-field timeliness. Because they are listed on the New York Stock Exchange, United are required to be prompt in releasing financial information. Sure enough, the publication of their full 2024-25 accounts in mid-September was the swiftest among English clubs and across Europe’s elite. Advertisement Some may scoff at United’s inclusion among the latter — they are absent from any of the three UEFA competitions this season — but financially, there’s little doubting their size. United booked club-record revenues of £666. 5million last season, surpassing the £661. 8m which landed them as the fourth-highest-earning club in world football a year earlier. In spite of the positive top line, United were loss-making. Again. They sit on the other side of a sixth consecutive year in the red, with pre-tax losses totalling £397. 4million in that time and debt closing in on an all-time high, even after over £200m in share injections by new co-owner Sir Jim Ratcliffe. The juxtaposition with record turnover is stark. Twenty years on from the Glazers’ takeover, a year and a half into Ratcliffe’s quasi–reign, United’s finances are more intriguing than ever. Breaking income records in a season where they were without Champions League football is noteworthy, but more impressive in isolation than in context. Compare United’s turnover to expectations elsewhere in the game, and the picture is rather less rosy. Revenues are growing across football’s elite. Even in lieu of other clubs releasing last season’s financials, we know several are likely to have surpassed United’s top line. Liverpool are expected to have breached the £700million barrier, while it would be no surprise if Arsenal have gazumped United too. Abroad, Barcelona have overtaken them, and probably Bayern Munich too. If all four of those teams have done so, it would make United the eighth-highest-earning club; since consulting firm Deloitte began producing annual rankings of club revenues in 1997, they have never dropped below fifth. Before the Covid-19 pandemic hit in the 2019-20 season, United’s revenue was £627. 1million. In the six years since, income has only grown by £39. 4m, a compound annual growth rate (CAGR) of just 1. 02 per cent. Some growth is better than none, but other clubs have gained significant ground — Arsenal may have overhauled a revenue gap which sat at £231. 6m in 2019. United’s problem is obvious: poor footballing performance is holding back broadcast income. Last year, they earned £173million from that revenue stream, their lowest since 2016, other than pandemic-impacted 2019-20. Liverpool earned more than that just from winning the Premier League. Advertisement The Anfield side also benefited from the generous new prize pot on offer in the Champions League, as did four other English clubs. This season, six English sides are doing so, and none of them are called Manchester United. One reason United were so keen to win May’s Europa League final was the financial boost of the spot in the Champions League that came with the trophy. Broadcast income for 2024-25 would have been even lower were it not for United’s enduring appeal. Despite finishing 15th in the 20-team table, their £136. 2million distribution from the Premier League was the division’s 11th highest, a byproduct of 28 of their 38 league games being televised live in the UK. Only Liverpool (30) and Arsenal (29) were shown more. United were able to book record turnover because other revenue streams grew notably. Matchday income of £160. 3million was a comfortable club (and English) record, up 17 per cent on 2023-24. Commercial income grew 10 per cent to £333. 3m, an impressive year-on-year increase. Gate receipts surged. United’s run to the Europa League final helped them tot up 30 games at Old Trafford, five more than a season earlier. Naturally, that boosted ticket takings, as did “strong demand for our hospitality offering”, per the club’s results announcement. Even so, the lack of Champions League football was an issue here, too. On a per-game basis, matchday revenue dropped from £5. 5million to £5. 3m. Still, recent price rises have clearly had their impact: last year’s per-game takings were 29 per cent higher than two seasons earlier. Commercial growth was even more impressive. United remain a powerhouse, and £30. 4million income growth was mainly attributable to improved retail and merchandise sales, up £19. 7m (16 per cent) to £144. 9m. The driver there was United’s new in-house e-commerce platform in partnership with SCAYLE, which launched 12 months ago. Growth in this area had stuttered to a standstill, so last season’s improvement was welcome. Advertisement More is expected in 2025-26: United have issued an overall revenue projection of £640million to £660m, which is a reduction, but not a huge one given there’s no European football at all this season, and so none of the matchday income that accompanies those extra games. They will doubtless have planned to improve their Premier League finish, but other lucrative undertakings are being considered too. United will have more midweeks spare than usual between now and May. Nowhere is Ratcliffe’s drive to slash costs clearer than in staff numbers. Announcements since February 2024 indicate a total of up to 450 full-time United employees could depart, and 2024-25’s headcount was already down 208 on a year earlier. Given that’s an average figure and the redundancy program was ongoing across the season, a further drop is expected in 2025-26. Full-time staff reduced by 18 per cent, yet a comparison with United’s ‘Big Six’ rivals shows why Ratcliffe and company still feel there’s fat to trim. United’s 932 football and administrative staff last season was higher than the most recent average of the other five clubs. The number of people United employ is crucial to understanding their total wage bill, which at £313. 3million was down £51. 5m (14 per cent) and at its lowest point since 2019-20. The reduction was born of both staffing cuts and the impact of no Champions League football last season, meaning player wages dropped. United’s wages as a proportion of turnover figure has never been unhealthy, but after the pandemic it reached a record 66 per cent. Combined with other high costs and the impact of Covid-19, it meant their profitability cratered. The club’s wages to revenue had averaged 49 per cent in the decade to the end of 2018-19. In the five years following, it averaged 59 per cent. Last season saw it tumble to 47 per cent, and United’s player wage bill gobbles up even less. Like most clubs, they don’t disclose wage splits, but a UEFA report in 2022-23 detailed player wage costs of around £217million. That meant £115m went on non-playing staff, more than the total salary costs at two of their Premier League rivals that year. With 635 administrative staff, United’s non-playing wage bill remained one of the league’s highest, even as it is dropping in line with restructuring. Advertisement That’s worth remembering when comparing wage bills with those elsewhere in the game. At Manchester City, just 381 administrative staff were employed in 2023-24, yet their wage bill was £412. 6million — £99. 4m more than United’s most recent number. It means the gulf between the pair’s player salaries is even larger than a comparison of total staff costs suggests. A falling wage bill is good for outgoings but might also create a new challenge. Spending alone won’t win you things, but pushing the boat out on wages does tend to increase your chances; the lower your bill there, the harder it is to compete on the pitch. And, as we’ve seen, poor performance equals less prize money. Nobody expects Ruben Amorim’s side to win the Premier League this season, but if United are to return to the top of English football, they’ll need to either ramp player-wage spending back up or buck a decades-long trend. In the 33 years of the Premier League era, only one club have been crowned champions with a wage bill outside of that season’s top four payers: Leicester City in 2015-16. Cost-cutting wasn’t limited to salaries. United’s other expenses (generally non-staff costs excluding depreciation) actually went up 14 per cent, to £170. 4million — a club high and only behind neighbours City in England on latest available figures. Peek under the hood, though, and you find clear impact from choices that have been made. Other expenses were up £21million but most cost categories showed a reduction, the main outlier being retail, merchandising and e-commerce costs. That new platform with SCAYLE wasn’t free to launch, and expenses were up £25. 1m, suggesting initial costs were higher than the revenue boost. It seems likely that will reverse in future years. Elsewhere, costs were down notably across travel and entertaining (36 per cent lower than 2023-24), legal and professional (20%), commercial and broadcasting (13%) and property expenses (8%). External matchday costs were up £4m (13%) but down proportionally, as United played 61 matches last season, an increase from 52 a year earlier. On a per-game basis, matchday expenses have dropped 9% in two seasons. Advertisement Of course, United’s efficiency drive would have been more successful were it not for two big missteps in the football department. Sacking manager Erik ten Hag and his backroom staff last October, then parting ways with sporting director Dan Ashworth a few weeks later meant £14. 5million in exceptional costs, adding around 50 per cent to an operating loss which dropped by 48% otherwise. If United choose to remove Amorim, Ten Hag’s successor, it will add to managerial change costs which now top £50million since Sir Alex Ferguson’s retirement 12 years ago. That figure is only a sliver of United’s turnover in that time but unwanted costs bear greater weight now than ever before. Less avoidable costs stymied United’s financial recovery and contributed to a pre-tax loss which, at £39. 7million, was simultaneously a £91. 1m (70 per cent) improvement on a year earlier and the club’s fourth-highest ever deficit. Exceptional costs relating to club-wide restructuring totalled £22. 1m and, since Ratcliffe’s arrival, expenses incurred by the reduction of the wider workforce are at £34. 4m and have naturally limited the speed at which United can return to profitability. Those costs will wane as the restructuring programme comes to an end, and United will benefit from savings in future years. Already, the scale of cost-cutting has had a notable impact. United halved their operating loss to £30. 5million, their best result in five years. Based on the most recent figures, this put them seventh in the Premier League, where almost all clubs lose money on the day-to-day, and player sales are increasingly relied upon to boost bottom lines. On an EBITDA basis — earnings before the impact of interest, tax, depreciation and (principally player) amortisation — United’s £182. 8million is close to the mark hit in pre-Covid times, and comfortably a league best. No other Premier League club has ever topped that number, and it reflects United’s wage control and high revenues. Profitability struggles have come further down the chain, where significant transfer spending has shredded EBITDA, and the costs of servicing sizeable debts have only added to the load and contributed to six consecutive years of loss-making. It is worth saying, however, that United were in the red even before interest costs in each of the past five seasons, something which was not the case before 2020-21. Profitability and sustainability rules (PSR) are on everyone’s lips nowadays, and for a time there were concerns United would run into trouble with the game’s financial regulations. As The Athletic detailed in June, though, the matter is more nuanced than previously known. Advertisement United’s PSR assessment is based on the results of Red Football Limited (RFL) rather than Manchester United plc. RFL’s pre-tax losses for 2022-23 and 2023-24 totalled just £55. 1million, well below the Premier League’s £105m limit. Some add-backs around intra-group loan interest and exchange rate movements were applied for United’s PSR submission, but that level of loss, plus the sizeable deductions the club can make for expenditure on infrastructure, the academy, community and their women’s team, meant there was little fear of a breach. The Athletic estimated United could have lost up to £141million in 2024-25 without breaching Premier League PSR. With just £39. 7m pre-tax loss in the plc, before those expenditure deductions, there was little to worry about. United are projecting similar Adjusted EBITDA (a proxy for operating performance) this season which, along with a few other factors, such as an expected reduction in exceptional restructuring costs, should mean any 2025-26 loss is reduced. As such, they shouldn’t have any PSR problems this time either. The cost-cutting at United has not touched transfer spending. They spent £343million on player registrations in the year to June 30, a new single-year club record by almost £100m. A further £167. 8m then went in the two months before the summer window closed on September 1 (Matheus Cunha’s fee was recorded within that £343m figure as he signed in June), taking gross transfer spend since Ratcliffe’s arrival to £510. 8m. Only Chelsea and Liverpool have spent more in that time.   Net transfer spending under his INEOS banner is at £365. 3million. That jars with the cost-cutting rhetoric but makes clear the Ratcliffe camp’s belief that returning United to former footballing glories is key to fixing finances. United’s squad had cost £1. 1bn to assemble by the end of June, the third most expensive in football at the time, and after deadline day that number is up to £1. 2bn. Transfer debt is on the rise across football, particularly in England, and The Athletic has already covered United’s ballooning transfer payables recently. Yet it’s still worth highlighting just how big their transfer debt is: at a net £344. 5million, it is likely the highest in world football. What’s more, £182. 8million is payable before the end of June 2026, meaning pressure on United’s cash flow is unlikely to ease in the short term. They drew down a further £105m on their revolving credit facility (RCF) — effectively, a corporate overdraft which aids day-to-day liquidity — between July and September, in part to help meet such large transfer liabilities. Advertisement One way to reduce transfer debt and improve finances more broadly is to be better sellers in the market. United have been poor at moving players on for good money, a byproduct of spending big on individuals who have then not hit expectations at Old Trafford. Other clubs have embraced player trading as a key strand of their business model. In the decade to 2023-24, United made £174. 2million profit on player sales, only the 18th highest in England, £400m behind City and over £650m behind Chelsea. There are signs of change, though. Much of the narrative over the summer was about United making some money from sales, and they did eventually find buyers for Alejandro Garnacho and Antony. Combined with over £20million in fees due from moves by former United players, as with Anthony Elanga’s switch to Newcastle from Nottingham Forest, the club have generated £75. 7m in sales in 2025-26, £44m as profit. Further activity could push them past the single-season £83. 7million sales record set when Cristiano Ronaldo moved to Real Madrid in June 2009. Better sales at United are both a positive and needed, but they still struggle relative to their peers. Eight Premier League clubs surpassed £100million in player sales this summer. The improvement in player sales is also tinged with a reminder of past failings. United’s accounts disclosed £55. 4million received for players with a net book value of £31. 7m at the time of sale. The bulk of that related to Antony, who was signed for over £80m three years ago. Getting him off the books to Real Betis was a success this summer but United clearly took not only a big haircut on the fee paid for him, but one so large it generated an accounting loss too. The time it takes for cost-cutting to be fully realised, alongside continued big transfer spending, means United’s debt is near its highest ever point. Advertisement Debt-free before the Glazers arrived, the club’s financial debt topped out at £773. 3million in both June 2010 and December 2023. The figure was £637million at the end of June this year, but events since have pushed it higher. Those combined £105m drawdowns on the RCF, alongside United’s unmoving $650m (£484m at the current rate) in long-term debt, put current estimates for total debt above £750m. The RCF, for a long time unused, was extended further in July. United now have £350m in short-term borrowing capabilities, of which £265m has been utilised. That such borrowing was needed even after Ratcliffe injected £238. 5million in shares last year is indicative of United’s outgoings. While we await the latest accounts from most teams, £750million-plus of financial debt pitches United as one of the most indebted clubs in world football. Ahead of them are Barcelona, Real Madrid, Tottenham and Everton, but spot the common theme there. Each of those four either has a new stadium or an old one that’s been/is being hugely and expensively revamped to be best in class; United, currently, have neither. At the end of 2018-19, United had £307. 6million in cash. Six years later, the balance has dwindled to £86. 1m, and that’s less than half the short-term transfer debt. United’s existing reserves weren’t enough to fund activities since the end of the previous decade. Over the past six seasons, the club has received £390. 3million in external funding: that £238. 5m in shares from Ratcliffe, and a further net £151. 8m in loans from banks. The up-to-date amount is £495. 3m, as the above doesn’t include the further £105m pulled down on the RCF. All of that has been required even as United continue to make huge sums on a day-to-day basis. In 15 of the past 17 seasons, over £100million cash has been generated from operations. Across the past six seasons, cash from operations totalled £620. 9m. Advertisement United’s problem is that their outgoings have been far larger. Across operating activities, Ratcliffe’s equity injections, added loans and a sliver from positive exchange rate movements, they’ve recorded incoming cash since June 2019 of £1. 021billion. But outgoing cash was £1. 243billion. Part of that, as ever, stems from the Glazers’ takeover in 2005. Across interest paid on loans and dividends paid out to shareholders (principally a certain family whose name rhymes with razor), £230million left the coffers in the past six years. A further £21. 3m went on a share buyback in 2019-20.   That still only counts for a fifth of the outgoing cash in that time, though. Far more draining has been United’s transfer activity. Some £877. 1m, net, went on fees, the most by any English club other than Chelsea (£1. 218bn). United’s transfer splurging has plainly contributed to the financial situation they’re in, but it’s the convergence of that and declining on-field performance which has pushed them to where they are today. Their free cash flow (FCF), the amount left over after capital expenditure (things like transfer fees) and interest costs, was over £200million in the red last season, not far shy of its pandemic nadir. That neatly summarises why £130m of added RCF borrowings and Ratcliffe’s final £80m equity injection were needed. Unspoken above about United’s operating cashflow was the fact the £620. 9million cash in through the door between 2019 and 2025 was almost half the £1. 112bn they generated in the prior six-year period. The club spent heavily on transfers then too, £660. 7m, but still managed to build up a hefty pile of cash. The growth in wages as a proportion of revenue, alongside other cost growth, flatlining income and even greater spending on transfers has driven United’s cash squeeze. A further recent drain on cash has been increased infrastructure activity. The state of the Old Trafford roof drew much attention a year ago, but United have at least started spending more on improvements: an average of £11. 6million a season over the past three years, against £5. 8m per season over the previous decade. More substantial has been investment at Carrington, United’s training ground, which a chunk of the money from Ratcliffe was earmarked for — £42. 7m went into works there last season, to go alongside £13m in the previous two years; a further £13. 3m in capital works were contracted at the end of June, albeit how much of that related to Carrington isn’t known. Lower capital spending in 2025-26 will aid United’s cash position. United’s financial revival still has a way to go. Transfer payables are growing rather than reducing, likewise broader debt. Annual interest payments on the latter are sneaking back up to the £40million mark. Advertisement Yet there has been a clear impact from the choices taken over the past two years. The wage bill is down and, before interest and exceptional costs relating to restructuring both outside and inside the manager’s dugout, they were in the black for the first time in five years.   More reductions will come: United have incurred substantial costs in reducing the workforce; future years will see savings without the offsetting hit of redundancy packages. If Amorim can build on the weekend’s win against Sunderland, there might be no need to incur further managerial costs. Significant player departures loom, even if they won’t command fees when they go. In Casemiro, Jadon Sancho, Harry Maguire and Tyrell Malacia, United have a quartet of contracts expiring next June which, after including employer costs on top, would comprise wage savings not far shy of £1million a week. Around 80 per cent of Sancho’s pay this season is at least being covered by Aston Villa during his loan there, while Rasmus Hojlund’s good start having been similarly borrowed by Napoli enhances the likelihood of that move being made permanent for €44m (£38. 3m; $51. 3m at current rates). Higher debt is a concern, but conversely shows growing confidence in United’s finances. The club consolidated their existing RCFs into one bigger facility, and in doing so reduced the interest rate on short-term borrowings. The level of those borrowings means interest could nominally be up in 2025-26, but lower than if the consolidation hadn’t taken place. That interest remains a burden — more now than ever, given costs elsewhere. Cash interest payments of £853million have been made since the Glazers arrived. It is simply accepted as a cost of living for United now. Fixing underlying operations has taken priority over debt reduction. Doing the former will prove easier if results on the field improve. United’s wage bill now sits well behind those of peers, a situation which naturally makes it harder to compete. Hefty transfer spending is the apparent offset, and looks a bold strategy; the correlation of wages to performance is much stronger, though there’s evidence that patience pays off for big transfer spenders. How much patience United can afford is unknown, however. Each season out of the Champions League will make it harder to catch up to their rivals. And all of this is without even mentioning a new Old Trafford, which would cost over £1billion to build. Funding that will be easier with the revenues playing in Europe’s top club competition brings, but returning to UEFA’s top table will require much better use of resources. Advertisement Overall, the picture for United is a mixed one. There are obvious improvements, and a clear, if brutal, plan has been implemented to fix a club whose finances had been allowed to reach a parlous state. In the short term, United can breathe a little easier, even with higher debt. But getting it right on the pitch is now of utmost importance. Ratcliffe and his INEOS empire provided a lot of necessary funds last year, but a recent halting of dividends in the latter’s wider business doesn’t point to a likelihood United will be able to tap more owner funding any time soon. United’s fortunes off the field will be driven by those on it. Spot the pattern. Connect the terms Find the hidden link between sports terms Play today's puzzle Chris Weatherspoon is a Football Finance Writer for The Athletic UK. A chartered accountant, he has previously covered the business of sport on a freelance basis, spanning deep dives into individual club accounts and broader analyses of industry-wide trends and issues, and utilises data and financial acumen to explore the money behind the game. Follow Chris on Twitter @CWeatherspoon_