Manchester United are confident they comply with Premier League and UEFA financial rules despite posting a £113.2m net loss in their latest accounts.
It is the fifth consecutive year United have made an annual loss, with the club £115.5m in the red in 2021-22 and £42.1m in 2022-23.
Profitability and sustainability rules (PSR) permit a £105m loss over a three-year period, but within the regulations certain deductions are allowed in relation to investment in infrastructure, the academy and women’s teams, among other things, which United believe means they will not fall foul of spending regulations.
Everton and Nottingham Forest received points deductions last season after exceeding permitted losses in regards to PSR.
United achieved club-record revenues of £661.8m in the year ending 30 June and have engaged in a number of cost-cutting measures, which the club hierarchy hope will lead to savings between £40m and £45m a year.
United announced plans in July to make 250 people redundant as part of restructuring under Sir Jim Ratcliffe, who bought a 25% stake in United in December and now heads football operations at Old Trafford.
As part of the club’s new structure under Ratcliffe, Omar Berrada moved from Manchester City to become the new chief executive. Part of Berrada’s remit is to put United on safer financial ground by making them operate in a more efficient manner, while maximising football and commercial success.
The £73.1m increase in losses compared with last year can, in part, be attributed to overspending in the transfer market. Eight-figure fees were paid for Mason Mount, André Onana and Rasmus Højlund but the investment – which contributed to a 10% increase in the wage bill, to £364.7m – failed to secure Champions League football last season as United finished eighth.
This will have a knock-on effect in next year’s accounts, with United’s broadcast revenue expected to drop by £30m due to them being in the Europa League rather than the Champions League.
There was a one-off cost of £47.8m relating to a strategic review, which ultimately led to Ratcliffe buying into the club and overseeing management changes that included Dan Ashworth and Jason Wilcox being appointed to senior roles. Ratcliffe has committed to injecting $300m (£229m) into United by the end of the calendar year, having already paid two-thirds of that amount. Work has begun on £50m redevelopment plans at the Carrington training ground.
“The club remains committed to, and in compliance with, both the Premier League’s profit and sustainability rules and UEFA’s financial fair play regulations,” said Berrada.
“We are working towards greater financial sustainability and making changes to our operations to make them more efficient, to ensure we are directing our resources to enhancing on-pitch performance.
“Ultimately, the strength of Manchester United is driven by the passion and loyalty of our supporters. Our clear objective is to return the club to the top of European football.
“Everyone at the club is aligned on a clear strategy to deliver sustained success both on and off the pitch, for the ultimate benefit of our fans, shareholders, and hugely diverse range of stakeholders.”
The Guardian
