Manchester United posted its annual earnings this week, detailing a £113.2 million loss as costs rose faster than revenues.

While the earnings leave the club at risk of breaching crucial financial sustainability rules, they also highlight the hit Ratcliffe has taken to his wallet in an attempt to turn around the fortunes of his boyhood club.

The Ineos boss invested £200 million in the club in addition to the £1.3 billion he spent to acquire 27.7% of the team. He intends to invest another £100 million in the club by the end of the year.

Ratcliffe’s review

Ratcliffe, the co-founder and CEO of petrochemicals giant Ineos, isn’t one to take half-measures. 

Since acquiring a minority stake in Manchester United last year, the billionaire has invoked a massive overhaul of the club’s football operations, installing a new top team including CEO Omar Berrada, formerly of cross-city rival Manchester City, new sporting director Dan Ashworth, and technical director Jason Wilcox.

The strategic review that underpinned that overhaul cost the club up to £47.8 million in one-off payments last year, which the club referred to as “exceptional items” in its annual report.

It’s unclear how those figures are broken down, but they could include severance packages for laid-off employees, compensation packages for the former employers of new recruits, and legal and consulting fees paid out to third parties, including Interpath Advisory, a KPMG spin-out, which performed a cost review for the club.

That £47.8 million figure also includes costs related to the majority-owner Glazer family’s share sale to Ratcliffe and restructuring costs.

A representative for Man United didn’t immediately respond to a request for comment.

Manchester United expects to make cost savings of between £40 million and £45 million a year due to its restructuring.

“Beginning in the third quarter of fiscal 2024, the club commenced a business transformation plan to unlock operational efficiency with the ultimate goal of improving the club’s financial sustainability and maximize the resources available to improve football operations,” the club said. 

The club reduced its headcount by 250 people over the Summer as part of its cost-cutting program. 

Ratcliffe gave those who remained an ultimatum after noticing a 20% dip in email traffic on mostly remote Fridays: come into the office full-time or seek alternative employment.

“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,” CEO Berrada said in a statement.

“Today, we announce new guidance for fiscal 2025 which reflects a partial year impact of the transformative cost-savings and organizational changes that we have been busy implementing over the summer.”

The £113.2 million losses realized in the maiden year of the Ratcliffe regime could cause supporters concern.

The Premier League’s Profit and Sustainability Rules (PSR), introduced to reign in reckless spending and ensure competitiveness, allows a club to make a maximum of £105 million in losses over three years.

Manchester United made a loss of £28.7 million in the 2022/23 season and a £115.5 million loss in 2021/22. The club hasn’t turned a profit since before the COVID-19 pandemic.

In a release alongside its annual earnings, Manchester United said it “remains committed to, and in compliance with, both the Premier League’s Profit and Sustainability Rules and UEFA’s Financial Fair Play Regulations.” 

Several clubs violated the new PSR regulations last year, with Everton and Nottingham Forest receiving points deductions for breaching the limit.

Despite spending around £180 million on five new players over the Summer, Manchester United has started this Premier League season in a form similar to how it ended the last one when the club finished in eighth place.

The first team has lost two of its opening three Premier League games, including a humiliating 3-0 defeat at home to arch-rivals Liverpool.