Man United on course for world-record £220m bonanza thanks to Sir Jim Ratcliffe - Kieran Maguire
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Seven months on from Sir Jim Ratcliffe’s part-takeover of Man United and it is fair to say that INEOS’s reign so far has been a mixed bag, especially in terms questions over Erik ten Hag’s future.
After fans and board alike were swept up in the emotion of an unexpected victory over Man City in the FA Cup final last May, the new regime triggered a one-year extension to Ten Hag‘s contract.
That was despite United finishing 8th in the Premier League, their worst ever finish in the competition, and despite a scattergun recruitment record.
Granted, Ten Hag won two trophies in his first two seasons in charge, but those two cup victories coincided with annual financial losses of £33m and £113m.
Now, United are considering Gareth Southgate as the Dutchman’s replacement, with the club already six points off the pace in the race for the top four after just six league games.
But while he so far has remain steadfast on the managerial situation, Ratcliffe – who is Britain’s second-richest person – has made sweeping changes in nearly every other department at Old Trafford.
Highly-rated executive Omar Berrada has joined from Man City to become the club’s CEO, while United finally landed Dan Ashworth as their new sporting director following a protracted saga with Newcastle.
Those are just two of the most high-profile changes out of – quite literally – hundreds throughout the club. And the shake-up goes far beyond personnel.
A rethink of the wage structure, a pivot towards a new strategy to comply with PSR, and plans to build a world-class new stadium have also been on the agenda.
To assess Ratcliffe’s time in M16 so far, TBR Football spoke exclusively to Liverpool University football finance lecturer, Price of Football author, and industry insider Kieran Maguire.
INEOS, Ratcliffe and life under the new regime
United, INEOS and Ratcliffe garnered unwanted headlines in the summer when it was revealed that over 250 staff had been let go in a move which would cost the club millions.
This initiative, which was rather clinically dubbed a ‘headcount rationalisation’ by the club, came not long after they committed to paying Ten Hag another year’s worth of his circa £9m salary.
Maguire’s view? Ratcliffe – whose main source of wealth is from the chemicals industry – is treating United as he would any other investment in his portfolio, he says.
“I think there is an element of desire and hope above realty in terms of the executive changes.
“INEOS have only been at the club for a few months. If we take a look at the costs of sacking 250 Mancunians, the total was £12.3m.
“Of that figure, nearly half – £5.7m – was paid to an existing executive such as Richard Arnold.
“The impact on morale at the club will have been ignored by INEOS because they are used to a product industry like chemicals as opposed to a service industry like football.
“Ultimately, if people are fearful for their jobs as is the case at Old Trafford at present, it is bound to have an impact on overall employee happiness.
“This might be communicated and have an impact on players, although it is hard to prove that.
“INEOS need to be given time, but people should also remember that their track record in terms of running football clubs is relatively mediocre.
“The new CEO has not been a football CEO before. Dan Ashworth is no doubt very good at arranging meetings on Zoom and Teams, but he has only had one transfer window to make a difference at United. And the record to date in terms of recruitment is mixed.
“United have said they should be contending for the Premier League in 2028, but we’re only seven matches into the season. They have to be given more time to change the culture of the club.”
The staggering value of a new stadium as Old Trafford plans progress
Regardless of what performances on the pitch look like under the watch of Ratcliffe and INEOS, the regime’s ultimate legacy will be how they decide to proceed with plans to build a new stadium.
INEOS favour the construction of a new stadium entirely as opposed to expanding Old Trafford, which could be retained and downsized as a home for their academy and women’s teams.
The project could take up to a decade in total and would saddle United, whose debt burden from the Glazers is already significant, with up to £2bn worth of extra debt.
But, as Maguire explains, a new 100,000-seater stadium would also be financially transformative for the club, both in terms of world-record matchday and commercial income as well as their prestige as an institution.
“A 100,000-capacity Old Trafford is likely to have the same number of season ticket holders as the current stadium.
“The focus is very much likely to be on commercial, hospitality and tourist fans. These pay the most per head.
“We have seen spectacular increases in the amounts being charged to corporate fans.
“One who contacted me recently has seen their ticket price go up from £3,600 per year in 2022-23 to £6,000 this season, but they are still willing to pay it.
“So there is no reason that Man United could not be looking at £200-220m per year from matchdays, especially if they can qualify for the new-format Champions League.
“This would be more revenue than a third of the clubs in the Premier League generate from all sources. That would give them a significant financial advantage over their peer group.
“However, there will be significant borrowing costs incurred, unless Sir Jim Ratcliffe proves to be a truly benevolent owner and decides to lend the club the money interest-free.
“There is nothing to stop him doing that. He certainly has the wealth to do it. I think this will be a test of just how genuine a Man United fan he really is.
“Remember, he did bid to buy Chelsea only a year before he decided to buy Man United.”
‘Project 150’ and Ratcliffe’s roadmap to glory
It emerged last week that CEO Berrarda has spoken to staff about ‘Project 150’, which is the plan to win the Premier League by 2028, the club’s 150th anniversary.
The plan, backed by Ratcliffe and his David Brailsford, is ambitious, but is it realistic from a financial point of view?
“Ratcliffe’s roadmap will be similar to the way he has dealt with other corporate acquisitions,” said Maguire.
“His record, which has been successful from a financial point of view, has been to cut costs, cut the workforce, and try to grow revenues.
“It can be argued that United have underperformed in the last 10 years. When they were winning with Sir Alex Ferguson in charge, it was in spite of rather than because of the Glazers.
“Ratcliffe’s approach has been to change things at the top of the club, bringing in Omar Berrada, Dan Ashworth and Jason Wilcox.
“Whether that is too many changes at one time is up for debate. It has to be remembered that David Gill was known as a very safe pair of hands and left at the same time as Ferguson. His departure is a very underappreciated aspect of analysis around Man United.
“Ratcliffe will be treating United in exactly the same way that he treats a chemical plant. Identify unnecessary costs, have a hostile relationship with staff that don’t matter – which in his view is everybody apart from the players and the manager – and make marginal cost savings regardless of the impact on morale and staff welfare.”
