Manchester United s performance is so bad, why can its revenue hit the club s highest record? | Financial Report Observation

Interpretation of financial report

Although Manchester United failed to compete in the Champions League last season, its revenue still set a club's highest record. However, what is slightly embarrassing is that Manchester United has been losing money for six consecutive years.

Recently, Manchester United released its financial report for the 2024-25 season. In terms of performance, Manchester United's total revenue reached 666.5 million pounds after a significant increase in game day and business revenue.

Manchester United's match-day revenue rose to £160.3 million, setting a record for English clubs, while commercial revenue reached £333.3 million, which is enough to offset the decline in broadcast revenue share caused by Manchester United's failure to participate in the Champions League. Despite this, Manchester United still lost £33 million last season, down from £113.2 million the previous year. Manchester United's revenue in the new season is expected to suffer a heavy blow due to the absence of this season's European arena. However, the expected decline is less than the revenue earned from reaching the Europa League final last season, which means that Manchester United's revenue in other areas will continue to grow. Since Sir Ratcliff took over control of the club's daily business from the Glazer family, he has taken a series of cost-cutting measures to make the giant club profitable again. Manchester United's reconstruction plan has resulted in the cuts of up to 450 jobs. Coupled with the decline in human capital caused by Manchester United's failure to qualify for the Champions League, Manchester United's wage expenditure fell to £313.2 million, the lowest level since the 2019-2020 season.

However, the additional cost of Manchester United spending as much as £36.6 million in the sacking of former head coach Teng Hach and his team, as well as the restructuring operations of the new coach team. Earlier this year, Sir Ratcliffe once claimed that if Manchester United does not cut the club's operating costs, they will face a "financial exhaustion" by Christmas.

As of the end of June, Manchester United's cash reserves were 86.1 million pounds. Of course, this is mainly attributed to Sir Ratcliff's injecting £80 million in early this year.

In an interview with BBC Sports, Sir Ratcliff expressed regret that Manchester United was still paying huge fees for the players they signed in previous years.

"If you look at the players we bought this summer (actually last summer) on the books, it means we didn't buy anything. We are still paying for Anthony, still paying for Casemiro, still paying for Onana, and still paying for Hoylen and Sancho," said Sir Ratcliff.

Over the previous season, Manchester United's total debt amounted to £637 million, up from £546.6 million in the previous season, partly due to net borrowing of £130 million from revolving credit last year.

Manchester United's pre-tax loss (calculated according to the Premier League's profit and sustainability rules) was £39.7 million.

According to The Athletic, Manchester United's pre-tax loss calculation is based on the accounts of its subsidiary Red Football Ltd, rather than on the performance of the public limited company (plc) level listed on the NYSE.

Reason Analysis

Manchester United set a new revenue record in a season without the Champions League, which reinforces a well-known concept that Manchester United is so different from other clubs.

Despite a decrease in broadcast rights revenue by £48.8 million, Manchester United still achieved £666.5 million, the third highest figure in Premier League club history. Previously, only Manchester City had revenues exceeding this number in the 2022-23 season and 2023-24 season.

This also sends a signal: Although Manchester United's revenue growth is extremely sensational, their poor performance on the field over the years is causing them to hit. We cannot give accurate comparisons until other clubs officially release their financial data for 2024-25. However, Manchester United is expected to drop to third or fourth in Premier League club revenue rankings. Liverpool is expected to have revenue exceeding £700 million like Manchester City, and Arsenal may have surpassed Manchester United.

If Arsenal achieves this goal, Manchester United will fall out of the top three in the revenue list for the first time in the Premier League, and it will also be its second time to fall out of the top two.

Looking ahead to the 2025-26 season, Manchester United's revenue is expected to remain flat or even decline, which shows that Manchester United's poor performance on the field has also allowed several competitors to surpass them financially. If there is no other improvement, the situation may get worse.

Granted, Manchester United has grown 10% in terms of business revenue, while Manchester United's £160.3 million game-day revenue hit a record high for Premier League clubs, up £23.2 million (17%) from the 2023-24 season.

But the harm of missing the Champions League is still obvious. Last season, Manchester United played a total of 30 games at Old Trafford, earning 5.3 million pounds per day, a decrease from 5.5 million pounds in the previous season. Manchester United's average daily game revenue has increased by £1.2 million (29%) since the 2022-23 season due to the rise in ticket prices.

Since Sir Ratcliff took office in February 2024, the shadow of layoffs has always been over Old Trafford. On the books, a £51.5 million reduction in wage expenditure (14%) also indicates that Manchester United has implemented a large-scale layoff plan.

This decline in spending is mainly attributed to the lack of need to pay more bonuses for participating in the Champions League. In fact, this decline is smaller than the drop in wages when Manchester United missed the Champions League last time. Manchester United's salary expenditure fell by £52.8 million in the 2022-23 season.

Manchester United's insufficient profitability is closely related to a series of bad decisions. In October 2024, Manchester United fired Tenghach and his team for £10.4 million. You know, it's only four months since Manchester United renewed the contract with Tenhach. Dan Asheworth was fired after only five months as sporting director, which cost Manchester United another £4.1 million.

cost reductions do play a role, but costly decisions offset this.

players' amortization costs have risen to more than £190 million, reflecting Manchester United's continued spending money in the transfer market. Previously, in England, only Chelsea spent more than this number. The detailed figures of Manchester United's transfer debt will be disclosed soon. However, the capital consumption caused by huge expenditures can be clearly seen in previous reports. Manchester United spent as much as £279 million in the 2024-25 season, nearly £60 million higher than the record set in the 2019-20 season.

With the exchange rate fluctuations, Manchester United's total pound debt is still increasing compared to a year ago. This is because they used the revolving line of credit in the 2024-25 season. As of the end of June, the loan balance was £160 million, £130 million higher than in June 2024. This is also the data after Manchester United paid back £50 million at the end of April.

After three withdrawals, the total amount of borrowing at revolving credit institutions soared again. This week, Manchester United borrowed another £105 million, raising its revolving credit line to a maximum of £350 million. The good news is that the deadline for Manchester United to repay the credit line has been extended from June 2027 to December 2029.

Conclusion

In addition, it is gratifying that although Manchester United has suffered losses for six consecutive seasons, their losses are decreasing, and the impact of the layoff plan will become clearer in the coming years. Putting aside the additional expense costs incurred by firing Tenghach and Dan Ashworth, operating losses have been reduced from £60 million to £30 million. Wage expenditure has also dropped to its lowest level since the 2019-20 season.

In the 2025-26 season, Manchester United's revenue is expected to remain at the level of 640 million to 670 million pounds for the fourth consecutive year. However, debts have risen instead of falling, and Sir Ratcliff still has the heavy responsibility.