Manchester United’s 2024 Finances Explained

Manchester Utd have now released its Q4 and full year fiscal 2024 results. 

Despite recording record revenues of £661.8 million the club posted a substantial net loss of £113.2 million. Manchester United’s latest financial results mark the fifth successive year in which the club have made an overall loss.

Let’s breakdown Manchester United’s finances and the latest accounts below. 

 

REVENUE

Total revenue increased by £13 million (+2.1%) to record revenues of £661.8 million and this was mostly due to higher broadcast revenues (Champions League in 2023/24 vs Europa League in 2022/23). Despite this boost to the figures, United’s group stage exit in Europe unfortunately meant less potential growth from commercial and matchday revenue.

According to Statista, for the 22/23 accounts, Manchester United’s revenues were the second highest in the Premier League and the likelihood is that this will also be the case for 2023/24.

Commercial Revenue

Commercial revenue overall stood still on last year (22/23) remaining at £302.9 million. Whilst the club saw a £11.7 million increase (10.3%) in Retail and Merchandising Revenues, this was cancelled out by a drop of the same value (£11.7 million) in Sponsorship (-6.1%). The accounts explain the decrease in Sponsorship as a “one off sponsorship credit” they received last year which they didn’t this year. As for Retail and Merchandising, the enhanced performance here was due to the extension of the Adidas agreement and the club’s Megastore revenue improving 8% on last year.

 

Broadcast Revenue

Broadcasting revenue for the year was £221.7 million, increasing by approximately £12.7 million on last year. Competing in the Champions League last season will have contributed to this improvement however finishing 8th in the Premier League meant less income than in 22/23 when club finished 3rd. According to the Premier League Annual Report, the difference between finishing in 3rd and 8th is approximately £17 million.

Matchday Revenue

Matchday revenue increased by £1 million (approx 0.5%) despite United playing eight less home games from the 22/23 season. This was partly due to the club continuing to see large demand for corporate hospitality. United’s run to two cup finals in 22/23 means they played five less domestic cup games. They also only played three home champions league games in the group stages compared to six Europa League home games the previous year.

 

EXPENSES

Total operating expenses for the year were £768.5 million, an increase of £87.4 million, or 12.8%, over the prior year.

 

Wages

Manchester United’s salaries increased by 10.1% to £364.7 million, again due to participation in the Champions League vs The Europa League. Qualification for the Champions League last season meant the players were paid full salaries whereas non qualification for the competition means a 25% wage reduction. This is enforced through clauses written in player contracts to minimise the impact of outgoings when the club misses out on substantial Champions League revenue.

The clubs wages to revenue ratio increased minimally from 51.1% to 55.1%, however this can be considered a relatively heathy level for this particular metric compared to some rival Premier League clubs.

 

Operating Expenses

Other operating expenses decreased by £13.8m to £149.4 which is approximately 8.4%. Whilst the full expenses breakdown is not yet available, this can likely be attributed to a reduction in match day expenses due to fewer home games in the period.

United’s pre-tax loss increased significantly by £98.1m to £130.7 million in the period.

This is mostly due to

• The decrease in adjusted EBIT by approx. £27m
• An increase in exceptional costs of approx £47.8 million incurred by the club for the sale of 27.7% to Sir Jim Ratcliffe’s Trawlers Limited. This can be seen highlighted below. 
• An increase in net finance costs of £40m. Net finance costs for the year were £61.4 million, compared to net finance costs of £21.4 million for the prior year, an increase of £40.0 million, or 186.9%. This is primarily due to more stable foreign exchange rates in the current year resulting in a small unrealized foreign exchange loss on unhedged USD borrowings of £2.8m, compared to large unrealized foreign exchange gain in the prior year of £22.4m."
• These costs mentioned were also somewhat negated by a £17m increase in profit from player sales!

 

Debt

So what about the debt?

Gross financial debt decreased in the year by £66.7 million (10.8%) to £546.6 million, mostly due to clearing some of the balance on the club’s revolving credit facility (AKA the clubs credit card with high interest rates often used for transfer business). The revolving credit facility (which has a total limit of £300 million) had £100 million outstanding in the 2023 accounts. A £70 million payment made in the most recent period, leaves £30 million outstanding in the 2024 accounts.  

Net financial debt decreased by £64.3 million (12%) to £473 million in the period. This is due to the £67m decrease in gross financial debt and a decrease of £2.5 million in cash reserves from £76m to £73.5 million. Cash reserves for the club have unfortunately not been anywhere near pre pandemic levels. Cash in the bank at 2019 was much healthier at £307.6 million and has depleted by 76% since.

 

PSR Compliance

So are Manchester United compliant when it comes to Profit and Sustainability Rules?

The league’s Profit and Sustainability Rules (PSR) allow clubs to lose a maximum of £105m over a three-year period.

PSR takes into account your pre tax profit/loss over a three year period. For United, the latest accounts pre tax loss of £130.7 million takes them to a total of approximately £312.9 million.

This is almost three times the PSR allowable limit of £105 million. Luckily for United, deductions can be made for investment in areas such as the women’s team or youth development, an area United have heavily invested in in recent years. Expenditure for these will not be disclosed in the accounts but it could well be sufficient to ensure the club do not incur any penalty for breach of PSR. The deficit as it stands can be calculated by taking the £312.9 million less the £105 million limit, equaling approximately £207.9 million over the allowable limit. For the three year period, clubs can also include costs incurred due to the Covid-19 pandemic for the 21/22 season which certainly helps United’s case. The fact the club were not in any rush or panic to sell players prior to the 30th June where the accounting period closed suggests the club are quietly confident they have done enough to be compliant. Ultimately, time will tell if the club has complied with PSR for the three year period and we’ve already seen how swiftly the new board have acted to ensure more stringent financial management going forward.

Manchester United have also made redundancies to reduce their staff headcount by around 250 and claimed they will "realise annualised cost savings of approximately £40 million to £45 million" in the next few years. This was confirmed in the statement claiming, "Due to timing and other contractual obligations, the club expects to realise these savings over fiscal years 2025 and 2026."

New Manchester United CEO Omar Berrada released at statement which accompanied the financial accounts claiming,

"We are working to improve our financial sustainability and make changes to our operations to make them more efficient, to ensure we are focusing our resources on improving performance on the ground.

Today, we are announcing new guidance for fiscal 2025 that reflects the partial year impact of the cost savings and organisational changes we implemented over the summer."

Manchester United’s strength is built on the passion and loyalty of its fans. Our clear objective is to return the club to the top of European football. Everyone at the club is aligned behind a clear strategy to deliver sustainable success both on and off the pitch, for the ultimate benefit of our supporters, shareholders and a hugely diverse range of stakeholders.”