Bellada: The positive financial effects from Manchester United's layoffs and restructuring plans have begun to show

On February 25th, local time, Sky Sports analyzed Manchester United’s financial situation, pointing out that the club urgently needs to return to the Champions League to generate tens of millions of pounds in revenue, otherwise financial growth pressures will remain significant.

Manchester United CEO Omar Berrada stated that the “positive financial effects” from layoffs and restructuring plans have begun to show. The latest financial report revealed that, despite a slight decline in overall revenue, profitability has significantly improved. However, to continue optimizing financial health, returning to the Champions League remains crucial.

This season, Manchester United’s men’s team missed European competitions, but in the first six months of this fiscal year, the club achieved an operating profit of £32.6 million, compared to a loss of £3.9 million in the same period last year. In just the most recent quarter, operating profit reached £19.6 million, far above last year’s £3.1 million.

Notably, before this financial report was released, minority shareholder Sir Ratcliffe led large-scale layoffs and organizational restructuring. Manchester United stated that cost control measures and staff reductions implemented last year are now beginning to positively impact cost structure and profitability.

However, the club’s total revenue for the second quarter of this fiscal year was £190.3 million, down from £198.7 million in the same period last year. Commercial revenue decreased from £85.1 million to £78.5 million, and matchday revenue fell from £52 million to £49.5 million — directly related to missing out on the Champions League this season.

Therefore, Manchester United must ensure a return to top European competitions next season to sustain financial improvements achieved during the Ratcliffe era. After the Champions League expanded this season, participating in the group stage alone can bring in between £73 million and £86 million.

Currently, the club still carries a long-term debt of $650 million left from the Glazer era, with short-term borrowings rising to £295.7 million.

Good news is that under Erik ten Hag, Manchester United’s men’s team is currently ranked fourth in the Premier League; the women’s team is second in the Women’s Super League and has advanced to the Women’s Champions League quarterfinals. The club believes this lays a foundation for further profit growth in the future.

Berrada said, “We are seeing positive financial impacts from off-field reforms, reflected in cost control and profitability. We remain committed to the ‘football first’ philosophy, continuing to invest in both men’s and women’s first teams.”

He added, “The men’s team is currently fourth in the Premier League, the women’s team is second in the Women’s Super League, and we have reached the League Cup final and the Women’s Champions League quarterfinals. Today’s achievements demonstrate the resilience of our business foundation, and we will continue striving for top competitive results at both men’s and women’s levels.”

Manchester United expects full-year revenue to be between £640 million and £660 million.

Sky Sports reporter Kaveh Solhekol noted that the latest financial report again underscores the importance of returning to European competitions. “If Manchester United wants to return to the top, they must re-enter the Champions League as soon as possible. With the expanded format, English clubs can earn between £73 million and £86 million this season in the group stage.”

He also emphasized that it is still early to celebrate. Despite the club’s overall debt rising to £1.29 billion and no new stadium being built, the club’s financial situation remains barely sustainable without European competitions.

Long-term debt remains at $650 million, short-term borrowings reach £295.7 million, and there are over £500 million in transfer-related payables. Due to missing European tournaments, revenue for the six months ending December last year fell from £341.8 million to £330.7 million.

Matchday revenue decreased by £2.8 million, mainly because Old Trafford hosted five fewer matches compared to the same period last year. However, ticket price increases led to higher per-match revenue, keeping matchday income the highest in England.

The departure of several high-paid players caused total wages in the last three months of last year to drop by 9%, down to £75.1 million. The financial report did not mention the compensation paid after manager Ralf Rangnick was dismissed on January 5, as that period was outside the scope of this report.

Overall, Manchester United’s financial situation has improved, but if they cannot return to the Champions League soon, long-term growth will still face significant pressure.