Sir Jim Ratcliffe is making drastic cuts to Manchester United’s operation for fear that the club are on a fast-track to bankruptcy. Whether such seismic concerns are legitimate or unfounded, it reflects a tale of off‑field financial woe that matches the club’s 12 years in the title‑contending wilderness.
The failure to reel in a 21st championship or make a genuine challenge for one is a direct corollary of slow decline and mismanagement under Malcolm Glazer, and then his six children after his death in 2014.
Related: Ratcliffe believes latest Manchester United job cuts will help club avoid going bust
Before the latest proposed staff cuts, Ratcliffe’s other acts included shedding around 250 jobs last summer and autumn, and the cessation of Sir Alex Ferguson’s ambassadorial role, which was costing the club around £2m a year.
In other money-saving measures Bryan Robson, Andy Cole and Denis Irwin, prominent players under Ferguson, were reportedly having their salaries as ambassadors reduced, while Jackie Kay, the head of team logistics and an employee for three decades, is one prominent non-football employee who is set to lose her job. Casting Ratcliffe as even more of a Scrooge, for some, is how he is thought to have ended the annual £100 Christmas bonus for administrative employees, replacing it with a £40 voucher from Marks & Spencer.
So: how have England’s record 20-time champions, the storied club of the Busby Babes, the holy trinity of Best-Law-Charlton, and Ferguson, these shores’ greatest manager, reached a stage where their largest single minority shareholder believes financial meltdown is a realistic prospect?
For Ratcliffe and his advisers the answer is clear: the mismanagement cited above and overseen by the Glazer regime, the latest headline being a £300m loss over the past three years.
The 72-year-old inherited this morass when he purchased 27.7% of the club’s shares last February. What followed was a $300m (£240m) injection due to Ratcliffe’s concern over a stressed balance sheet and that the club would run out of cash. Yet other decisions approved by the man who became head of United’s football policy under the terms of his buy-in have hardly helped.
In Ratcliffe’s first summer market he signed off a £200m outlay to back the then manager, Erik ten Hag, to recruit Joshua Zirkzee, Noussair Mazraoui, Matthijs de Ligt, Manuel Ugarte and Leny Yoro. Yet by 28 October Ten Hag was sacked, with his coaching staff of René Hake, Jelle ten Rouwelaar, Pieter Morel and Ruud van Nistelrooy all following. A total of £10.4m was paid in compensation.
Hiring Ruben Amorim as Ten Hag’s replacement, plus the Portuguese’s coaching quintet of Carlos Fernandes, Jorge Vital, Adélio Cândido, Emanuel Ferro and Paulo Barreira, who followed from Sporting, cost a further £11m.
Six weeks later Dan Ashworth departed as United’s sporting director after only five months, despite Ratcliffe having heralded his appointment by saying the club was recruiting a world-class operator and paying Newcastle millions in compensation.
United’s troubled pecuniary position can be traced back 20 years to Glazer Sr’s leveraged takeover. This loaded an approximate £500m debt on United, a sum yet to be paid off. Instead, the latest accounts from November showed the figure to stand at an eye-watering, crippling £714m.
While servicing the debt has soaked up millions, current borrowings in November were also £232.3m, a rise of £36.5m from the June end‑of-year accounts.
To the £200m splurged on five players Amorim had no say in recruiting, and who are part of a squad not built for the Portuguese’s 3-4-3 system, can be added the billion-plus spent in the previous windows since Ferguson retired in May 2013 after leading United to their last league title.
Too many players recruited became a loss as they failed to be sold on for a profit. Example: Paul Pogba cost a British record transfer fee of £89.3m when he joined from Juventus in August 2016. Six years later and at his theoretical peak, aged 29, he returned to the Italian club on a free.
Across town, Manchester City are a diametric proposition: the champions’ on-field success in the past decade or so runs alongside a smart business operation that this summer had filled their coffers with more than half a billion to invest in Pep Guardiola’s squad.
Related: Red flags raised after debts soar at Sir Jim Ratcliffe’s chemicals empire
The yawning disparity between United and their neighbours was illuminated in the winter window. Despite plunging Premier League form under Amorim, United could only source £25.1m to buy Patrick Dorgu from Lecce plus about £1.5m to bring in Ayden Heaven from Arsenal.
At City, with their uneven displays threatening even Champions League qualification, Guardiola was backed with a £172m splurge on Omar Marmoush, Vitor Reis, Abdukodir Khusanov and Nico González.
Now, moving forward, the forecast for United in the summer window is hardly rosier: the ability to considerably strengthen will depend on making a profit from player sales.
But there is potentially better news forthe club in the longer term: their football chief believes his drastic measures will, in two years, make United a robust financial proposition with a competitive advantage over their rivals. The appropriate reaction to this stance may be to wait and see. Yet Ratcliffe means business, so by 2027 we will know if he is successful.
