Forget 'record revenue': Are Manchester United stagnating financially?

As the board at Manchester United would have liked, the weekend’s reports hailed record revenues for the club.

Indeed, United have an ability to maintain high revenues while on-pitch performances suffer. But it’s a far more complex matter. Details collated by football business blogger Swiss Ramble help to show how United are beginning to suffer from their lack of success.

A number of trophyless seasons filled with dire football has, predictably, taken its toll. The £838m used by the club to pay off Glazer-enforced debt has also left the Reds behind their rivals.

The basic headline may read “financial results remain strong” but that hides a more depressing truth.

Other clubs catching up

United’s status as a commercial juggernaut has never, and still is not, been in doubt. They have an incredible capacity to generate cash in every department.

Importantly, though, there has been a stagnation in United’s growth in this area. Tweets above and below from the Swiss Ramble demonstrate how United’s rivals are gaining ground. These are teams who were not successful while United reigned supreme in the 1990s and 2000s but have now reached UEFA Champions League finals or won Premier League titles.

United’s commercial income remains extremely high but it’s no longer extraordinary. After a big increase during the 2015/16 campaign due to Adidas (£75m) and Chevrolet ($75m) kit deals, growth has been limited.

Meanwhile, the rest of the top six have continued to grow their commercial departments at pace. It won’t be long before the gap is small enough to be irrelevant.

Photo by VI Images via Getty Images

Liverpool are set to announce a new kit deal with Nike that will vastly eclipse the £75m that United receive each season from Adidas. Not only that, but United’s income from the Adidas deal will go down should they fail to qualify for the Champions League again this season. As things stand, United earn more than any other club through kit sponsorship with £164m generated each year. The closest is City at £140m per year. The key is that the gap is decreasing annually.

Glazer-debt restricting United

The key point in United’s finances is of course the stifling of the club’s ability to challenge for trophies due to the Glazers. When the American family took over in 2005, they effectively dumped their debt on United. It’s had an enormous impact and these latest financial reports reveal the extent of it once again.

United have spent nearly £1billion because of the manner in which the Glazers took over, and subsequently ran, the club. It will only continue. They were the only owners in the whole of the Premier League to be paid dividends (of £22m). This has been an annual occurrence and could have covered the wages for two top players, as per Swiss Ramble.

Wage mismanagement

Though United finished sixth last season, their wages shot up. In the last three years, the club’s wage bill has grown by an astonishing £100m. That’s a growth of 43% according to Swiss Ramble, as seen below.

Lack of transfer spending

Though United have infamously spent big in the transfer market, their activities have dropped in recent years. They spent less in the 2018/29 season than in any campaign since Sir Alex Ferguson’s last year in charge. Accusations of a failure to back Jose Mourinho are effectively proved right.

What could be different?

It’s a somewhat disheartening question, but one worth asking: what would be different if the Glazers had not taken over in 2005? There are two possible conclusions to this. It’s unlikely that United would be quite as much of a commercial giant as they are today. The work of Ed Woodward and others in the Glazer-era has probably got the most out of this sporting institution as a business.

But similarly, United would not be a club laced with debt. They make enormous amounts of money but have to dedicate upwards of £40m a season towards debt or Glazer dividends. Another £4m goes to Ed Woodward. These are figures that leave United in a strange situation: making and spending large sums of money, but not quite as much as would otherwise be possible.

Photo by Michael Regan/Getty Images

So fans and critics alike can continue to argue over how much United spend but the real point is that United used to be a club racing away from their rivals. On and off the pitch they led with undeniable success.

They secured a record number of titles while agreeing to record-breaking sponsorships. Now the chasing pack are moving in closer. City, Liverpool, Tottenham and the rest are beginning to match United’s global powers on and off the pitch. Things must change.

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Life-long Manchester United fan with a strong interest in the club's academy. Host of the Manchester United Weekly Podcast and United Through Time. First game at Old Trafford was the 7-1 rout of AS Roma in 2007.