Man Utd dismiss points deduction fears despite £313m loss in three years

Manchester United have brushed aside concerns about potential point deductions after the club posted huge losses for last season.

United expect to make up to £35 million in savings after costs after axing around 250 jobs – more than a fifth of the workforce – in a mass redundancy programme that concluded at the end of last month.

United said they remain in compliance with the Premier League’s profit and sustainability rules (PSR) and Uefa’s financial regulations after their latest accounts for the year to June 30 revealed losses before tax of £130.7 million.

It means their losses before tax over the past three seasons have amounted to £312.9 million. The club have posted five consecutive full-year losses, due in part to increased investment in the playing squad.

Premier League clubs are permitted to incur a financial loss of £105 million over a three-year period – at an average of £35 million per year – on the proviso that £90 million of that is covered by “secure funding” from the owner.

United are able to make a series of allowable deductions against those losses from investment and spending in infrastructure, women’s football, youth development, community initiatives, Covid and for depreciation, and the club are satisfied they are compliant.

Telegraph Sport understands that they could be permitted to deduct or exclude from their PSR calculations some of the £47.8 million costs incurred during the takeover process that ended with Sir Jim Ratcliffe acquiring a 27.7 per cent stake in the club in February.

Record revenues of £661.8m

Other Premier League clubs have also been subject to buyouts since the PSR rules came into force.

“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,” United said in the accounts.

Kieran Maguire, lecturer in football finance at Liverpool University, suggested that a series of deductions could bring United’s losses down to just over £100 million – and within PSR parameters. Maguire estimated that over the past three seasons United could claim around £45 million in infrastructure deductions, £66 million in academy costs, £40 million in Covid claims from 2021/22, plus potentially the takeover costs totalling almost £48 million as well as investment in the women’s team worth an estimated £6 million.

United posted record revenues of £661.8 million for the 2023/24 season. The club are forecasting turnover of between £650 million and £670 million for 2025, which is expected to include the £50 million upgrade of the club’s Carrington training base due to be completed next summer, and £10 million of costs relating to what they are calling their “headcount reduction programme”.

Ratcliffe has embarked on a major cost-cutting drive since becoming a co-owner of the club and employed corporate restructuring firm Interpath Advisory to see where savings could be made.

“With the intention of creating a leaner, agile and more sustainable structure, the club… announced an employee redundancy programme in July 2024, which was concluded at the end of August 2024 and resulted in the rationalisation of the club’s employee base by approximately 250 roles across all departments,” the club said in their accounts.

“In total, the club expect to realise annualised cost savings of approximately £40 million to £45 million, before implementation costs of £10 million. Due to the timing and other contractual obligations, the club expects to realise these savings over fiscal years 2025 and 2026.”

Broadcast revenues for 2025 are forecast to be £30 million lower than last season as the club are not competing in the Champions League. The guidance for next year also includes a £30 million improvement in the retail, merchandising and licensing arm of the business following the transition of e-commerce to an in-house operation in partnership with SCAYLE.

United’s accounts revealed that the takeover process cost the club £47.8 million – of which $31.5 million (£24.9 million) went to the US merchant bank Raine, which brokered the deal.

As part of his minority buyout, Ratcliffe injected $200 million (£153.4 million) of fresh capital with a further $100 million (£76.7 million) to be invested before the end of the year, some of which is being used to fund the training ground refurbishment.

While United’s commercial revenues for 2023/24 remain unchanged on the previous 12 months, at £302.9 million, broadcast income surged to £221.8 million, primarily as a result of their involvement in the Champions League. There was a marginal increase in match-day revenue to £137.1 million.

The wage bill rose by 10 per cent (£33.3 million) to £364.7 million after the club’s return to the Champions League last season. United’s net loss for the period was £113.2 million, their second biggest in five years.

United chief executive Omar Berrada said the club were “extremely focused on working collectively to create a bright future with football success at the heart of it”.

He added: “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.

“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.”

Meanwhile, United are interested in appointing Marc Armstrong, the chief revenue officer at Paris St-Germain, in a new chief business officer role.

Negotiations are ongoing with United, who want to appoint somebody who can oversee all the commercial areas of the business.

Armstrong is well regarded at PSG and known to Jean-Claude Blanc, United’s football club board member and chief executive of Ineos Sport who formerly worked for the French champions.

He joined PSG, initially as chief partnerships officer, in 2018 from the National Basketball Association in the US, where he was vice-president of global marketing partnerships and emerging markets. He was formerly the National Football League’s commercial director.