Manchester United is set to undergo a significant transformation in its corporate structure to enhance financial sustainability and operational efficiency. As part of this restructuring initiative, the club may make up to 200 more jobs redundant. Additionally, the club has confirmed the cessation of free staff lunches at Old Trafford, a move expected to save over £1 million annually. These changes come against a backdrop of financial losses, with the club reporting a cumulative loss of over £300 million in the past three years and a total debt amounting to £1.1 billion.
The club's recent quarterly accounts revealed a loss of £27.7 million for the period, with operating profits plummeting from £27.5 million to £3 million. Manchester United has been grappling with financial difficulties for five consecutive years. According to CEO Omar Berrada, these issues are unsustainable and jeopardize the club's compliance with Premier League and UEFA regulations.
"We are initiating a wide-ranging series of measures which will transform and renew the club. Unfortunately, this means announcing further potential redundancies and we deeply regret the impact on those affected colleagues. However, these hard choices are necessary to put the club back on a stable financial footing." – Manchester United
The restructuring plan aims not only to stabilize finances but also to allow reinvestment in men's and women's football success and infrastructure improvements. The Glazer family, who own the club, previously sold 25% of Manchester United to INEOS for approximately £1 billion. Over the past decade, they have collected dividends totaling £177 million, despite the club's escalating debt and financial losses.
"Our two main priorities as a club are delivering success on the pitch for our fans and improving our facilities. We cannot invest in these objectives if we are continuously losing money." – CEO Omar Berrada
The club's total debt has surged from £600 million to £731 million over 19 years, with interest payments on this debt reaching £834 million. This financial burden started when the Glazer family acquired the club, borrowing heavily and placing the debt on the club itself.
"When they bought the club, they borrowed £600m and loaded it on to the club. The club have paid £834m in interest on that debt, 19 years later that debt has gone up to £731m. This is a club who were debt-free when the Glazers bought United." – Sky Sports News chief reporter Kaveh Solhekol
"They also spent £391m in transfer payments. Total debt is £1.1bn. In the past 10 years the Glazers family have taken dividends of £177m and just over a year ago they sold 25 per cent of the club for around £1bn to INEOS." – Sky Sports News chief reporter Kaveh Solhekol
Despite these challenges, Manchester United remains committed to its charitable endeavors. The annual donation of £40,000 to the Manchester United Disabled Supporters' Association will continue unchanged. Additionally, charitable activities will now focus primarily on the Manchester United Foundation and the Disabled Supporters' Association.
The club's transformation strategy is designed to return Manchester United to profitability, crafting a more robust financial platform from which it can operate. This strategy also emphasizes maintaining compliance with UEFA and Premier League regulations while delivering success on the field for its fans.
"At the end of this process, we will have a more lean, agile and financially sustainable football club, while continuing to provide a world-class service to our valuable commercial partners. We will then be in a much stronger position to invest in football success and improved facilities for fans, while remaining compliant with UEFA and Premier League regulations." – CEO Omar Berrada
CEO Omar Berrada reiterated the importance of these changes, emphasizing that financial stability is crucial for investing in both football success and facility enhancements. The focus remains on creating a financially sustainable model that supports the club's ambitions both on and off the pitch.
"We have lost money for the past five consecutive years. This cannot continue" – CEO Omar Berrada
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