Manchester United has cancelled the corporate credit cards of senior figures at Old Trafford to reduce costs and help the club comply with profit and sustainability regulations (PSR).
Sources have told ESPN that Co-Owner Sir Jim Ratcliffe has cancelled corporate credit cards, as part of a cost saving initiative to prevent the Premier League club from being penalised by the league’s PSR.
Manchester United hasn’t exactly been a football club that could be described as financially savvy. In fact, during the reign of its owners, the Glazer family, the club has racked up an impressive debt, which currently stands at £773.3m.
Despite the club adding to this debt year-on-year, surprisingly, it has not found itself on the wrong side of the league’s PSR, unlike fellow Premier League clubs, Everton and Nottingham Forest.
However, last summer, United faced a £257,000 fine due to a breach of UEFA’s financial sustainability regulations. Additionally, overspending across the last two summer transfer windows has put Manchester United in a challenging financial position.
The Red Devils have spent a whopping £381m on new players since June 2022, which isn’t best coupled with decreased revenue – stemming from the club’s group stage exit from this season’s Champions League.
Taking these figures into consideration, experts believed that Manchester United were on the brink of being penalised by the league and could have followed the likes of Everton who faced an initial 10 point deduction earlier this year, which was later changed to six.
So what good fortune presented itself to the club to plaster over these damning financial wounds?
The first aid kit came in the form of Sir Jim Ratcliffe. Ratcliffe, via his Ineos Group, acquired a significant 27.7% stake in United from the club’s owners in February. In light of this development, Ratcliffe initiated a thorough review of costs at Old Trafford.
Sources told ESPN that Manchester United holds confidence in their ability to adhere to the Premier League’s Profit and Sustainability Rules (PSR).
However, the club’s Chief Operating Officer, Collette Roche, expressed caution in December, stating, “We have to be very careful to ensure we remain compliant.”
She further stressed the necessity of “being really disciplined on spending going forward, with a balance between incomings and outgoings”.
Looking for ways to cut costs, Ratcliffe has allegedly proposed a plan to cancel corporate credit cards.
According to ESPN, a club source confirmed that as a result of the review, heads of departments have had their corporate credit card privileges revoked, aiming to instigate a shift in culture, creating a more cost-conscious and disciplined approach.
Additionally, sources told ESPN that heads of all departments at United are also expected to meet Interpath consultants to assess departmental budgets and explore ways to save money and improve outcomes.
Supporters of United may have not batted an eye at this news last year, however, Ratcliffe has emphasised that all of these cost cutting approaches are directly linked to increasing the amount of money that can be spent on the squad and other football objectives, such as a new state of the art stadium. A balance that Premier League clubs are struggling to get right, as of late. #
As mentioned earlier, Everton and Forest have been docked points for breaching PSR. The majority of Everton’s money was spent on constructing a new stadium and Forest spent its cash on bolstering its squad to ensure it could compete in the league.
John Textor, Crystal Palace’s owner, labelled Financial Fair Play (FFP) a “fraud term”, earlier this year at the Financial Times Business of Football summit. In the same speech he explained how the regulations hold him and fellow Co-Owners from spending as much money as they could.
Opinions such as this have led to owners of smaller teams feeling that it is an impossible task to compete against the big six, who also aren’t fans of the regulations themselves.
Due to this collective opinion, the Premier League is reportedly looking to remove points deductions in favour of a luxury tax penalty as part of potential changes to the PSR, with 17 out of 20 clubs expected to vote in favour of a system overhaul, according to the Daily Mail.
Amidst all of this chaos and joint dissatisfaction there are clubs that have proven the regulations are fit for purpose. Brighton and Hove Albion, for example, has recently reported record profits in a year that the club competed in Europe for the first time in its history, proving that with a financially savvy mindset anything is possible.
