Manchester United have announced their latest financial results, and they have posted a net loss of £71.4 million during the first quarter of the year 2024 – between January and March.
The Red Devils only posted a net loss of £5.6m during the same three-month period in 2023, with the acquisition of major shares by Sir Jim Ratcliffe playing a key role in such a huge difference between a year.
The British billionaire became Man United co-owner after buying 27.7% of their shares – while consultancy fees owed to the American firm Raine, who brokered the deal, were also paid – leading to £30.3m in exceptional costs.
Reports claim the US merchant bank earned £25m from the sale, and costs were paid by Man United rather than the Glazers, who earned £715m from the sale of their shares to Ratcliffe.
56 lawyers from Latham & Watkins LLP working across a host of cities including London, New York, Washington DC, San Diego, Houston, Washington, Orange County and Brussels all worked on the transaction, which saw the club’s legal bill run into the millions.
Their failure to progress from the Champions League group stage also took a toll on their finances, as finishing last in Group A behind Bayern Munich, Copenhagen and Galatasaray ensured they did not get anything when the knockout stages of the competition and Europa League started in February.
As a result, Man United ended up playing fewer home games than they did during the first quarter of 2023, with four of their five FA Cup games heading into the final played away from home, while their elimination from the Carabao Cup round of 16 by Newcastle United in November was also a factor.
Consequently, revenue was down 20% (from £170m to £136.7m) compared to the same period last season, which the Red Devils attributed to playing nine fewer home matches.
Their total operating expenses were up 15% on the equivalent quarter last year to £203.7m, which included £91.2m in employee costs as they invested heavily into the first-team squad.
It led to amortisation costs related to the payment of transfer fees over the course of players’ contracts reaching £46.3m, up by £3.4m on the same quarter last year.
Man United will hope things improve significantly during the second quarter (April to June), and that Ratcliffe investing over £200m in developing their infrastructure will come in handy.
They have confirmed via their latest accounts plans for a redundancy programme, which could lead to around 250 people losing their jobs across the club, and whether that will help them balance the books and ultimately avoid breaking the Premier League’s profitability and sustainability rules (PSR) remains to be seen.
