Manchester United’s finances are sinking into the red. According to the latest results published by the club and reported by The Times, the overall debt of the Red Devils has reached a historic high.
United may be red on the pitch, but the same color now applies to its bank account. The club’s total debt stands at £1.29 billion, or around €1.47 billion, at the end of the last quarter.
Cost-Cutting Measures Under Sir Jim Ratcliffe
How can this hole be explained? The club has taken out a new €120 million loan to finance recent transfer market activity, pushing financial debt alone to €854 million. Added to that are €246 million in non-current liabilities and around €368 million in current liabilities, mainly linked to short-term transfer payments.
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The Red Devils are now hunting for savings outside the transfer market. The embarrassing end of free cafeteria meals for employees marked the start of a drastic restructuring policy led by minority shareholder Sir Jim Ratcliffe. Nearly 500 jobs have been cut, allowing the club to partially restore its accounts.
After taking into account financial costs of around €24 million, the balance sheet remains negative, with a pre-tax loss of €9.6 million for the quarter. However, the sales of Alejandro Garnacho and Antony, combined with cost-cutting measures, have reduced the wage bill from 56% to 52.5% of revenues.
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