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Manchester United’s full-year losses have risen after a tough season on the pitch and exceptional costs from Sir Jim Ratcliffe’s purchase of a minority stake in the club in December.
Revenues increased 2.1 per cent to £661mn in the year ending on June 30, while operating expenses were £768.5mn, a 12.8 per cent rise. United also crashed out of the lucrative Champions League in the early stages and, despite winning the FA Cup, the men’s team slumped to eighth in the domestic table, its worst result since the Premier League began in 1992.
Full-year net losses rose to £113mn from £28.7mn the previous year, partly because of higher spending on players and wages. The club also incurred £47.8mn of exceptional costs, primarily from the sale of a 27.7 stake to petrochemicals billionaire Ratcliffe.
After several years of disappointment on the pitch, United is trying to turn its fortunes around at a time when it continues to underperform. The club qualified for the Europa League this season, one rung down from the Champions League, the highest level of European competition. This will affect revenues in the current financial year.
It expects to generate £650mn to £670mn in revenue this season and adjusted earnings of £145mn to £160mn, against a figure of £147mn in the year to the end of June.
The club’s New York-listed A shares, which carry fewer voting rights than the B shares owned by the Glazers and Ratcliffe, were down 8.5 per cent to $15 in morning trading on Wednesday, a steep discount to the $33 paid by Ratcliffe to buy into the club.
As Ratcliffe became a co-owner alongside the Glazer family, a strategic overhaul was launched and 250 jobs have been cut. There have also been a series of senior leadership appointments and an investment programme to improve training facilities.
United expects to cut about £40mn to £45mn a year from its costs because of the restructuring, including the jobs cuts, which will cost the club £10mn in redundancy payments.
The puzzle for Ratcliffe and the Glazers is how to restore United’s playing performance. The club has not generated an annual profit since before the Covid-19 pandemic but still brings in significantly higher revenues than most of its English rivals.
Despite its patchy performance on the pitch, United continues to attract commercial partners, including Snapdragon. The subsidiary of chipmaker Qualcomm has extended its shirt sponsorship with the club to 2029.
Chief executive Omar Berrada, who joined from rival Manchester City this year, said the “clear objective is to return the club to the top of European football”.
“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,” he said.
