Kieran Maguire predicts Man United could axe Ten Hag as manager but keep him on payroll
Today at 19:36
Man United have had their worst ever start to a Premier League season and Erik ten Hag’s job is far from safe – but the call over his future will be a financial one as much as it is based on performances.
United flirted with the upper limit of Premier League PSR (Profit and Sustainability Rules) in 2023-24 and only narrowly avoided a breach because of £40m in lost earnings they attributed to the pandemic.
The margins are likely to be tight again this year given that, for all the sweeping change enacted by Sir Jim Ratcliffe so far, the club’s wage and amortisation will still be astronomical.
Ten Hag is reportedly due around £14m in compensation if he is given the boot, and that sum would come out of their PSR quota immediately.
To explore this topic, as well as a range of other Man United finance issues, TBR Football spoke exclusively to Liverpool University football finance lecturer and industry insider Kieran Maguire.
United set to appoint new behind-the-scenes figure
It was reported this week that United are all but set to name Marc Armstrong as their new chief commercial officer, poaching the executive from Paris Saint-Germain.
And for the long-term financial prospects of the club, Maguire thinks this appointment could be just as important as the decision over Ten Hag’s future.
“It’s always depressing when we have to talk about the suits instead of the football, but this is an essential role,” he said.
“From 2016 to around 2022, commercial income and matchday income had flatlined. We are starting to see an uptick now. The Adidas and the Snapdragon deal will show a boost.
“Trying to persuade sponsors to become official partners for United is harder than it was 15 years ago. They can’t offer a great deal of success on the pitch.
“Their impregnable reputation at Old Trafford has ceased. They are still seen as a big scalp, but not to the same extent as before.
“Also, some of the potential big deals that will take place when the new stadium goes ahead will be absolutely critical.
“Could there be a naming rights deal? Could they name individual stands? Trying to get long-term partners for the hospitality boxes at the right price will be essential.
“It is going to be a very expensive project and ultimately it will have to be funded either by debt or by share issues.
“If there is any public money, it will go to the surrounding areas in terms of providing transport links and infrastructure. That has been the case at Bramley Moore Dock and at Spurs. There has always been an element of local government funding, but that won’t be for the stadium itself.
“Unfortunately, what we have seen on social media and in the media itself is tribalism masquerading as analysis on this issue.”
Sir Jim Ratcliffe’s stance on Man City’s APT case
Easily the biggest news this week, which will have an affect on how United are run financially for years to come, was that Man City had partially succeeded in their challenge to the Premier League’s APT rules.
APT (associated party transaction) rules govern commercial deals signed with owner-linked companies, and United were one of the clubs to give evidence against City at the tribunal.
That was at odds by the noises made by Ratcliffe, who had appeared to express some sympathy with City based on his free-market capitalist philosophy.
“Ratcliffe is a bit like Trump,” Maguire observed.
“He has advisers but he won’t listen to them because he takes a dictatorial approach.
“I wasn’t surprised that they gave evidence against City. Everyone is acting in self-interest. United’s aim is to finish in the top four. Anything that can diminish Man City’s chances of doing the same is going to be seized.”
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PSR and the cost of sacking Ten Hag
Premier League clubs are allowed to lose a maximum of £105m over a rolling three-year period, and the cost of sacking Ten Hag would eat into that considerably.
Maguire assessed how much the club will directly factor in their financial position when making the ultimate call on the Dutchman’s future.
“It will be a factor but not the only factor,” he said.
“Finishing in the top four or not will be a bigger factor because £14m is peanuts compared to what they can get in the Champions League.
“£14m is the equivalent of four places in the Premier League, because each place is worth £3.5m.
“I think people also need to take into consideration that the sales of Scott McTominay and Mason Greenwood have significantly improve United’s PSR position. They were both academy sales, which allows them to retain all the profit.
“They might also choose to keep him on payroll for 18 months as opposed to terminating his contract immediately for £14m. That would see the impact absorbed over two financial years.
“They will also have to recruit a new coach and that coach will be added in, but it doesn’t necessarily need to be a £14m hit in 2024-25.”
