This week, Manchester United face their biggest game since 1990 when they play Real Sociedad.
United have contested four Champions League finals, winning two and losing two, during that 35-year timeframe, but none have been as consequential to the club’s future as Thursday’s Europa League Round of 16 first-leg tie in Spain. The same will apply in next week’s second leg at Old Trafford — and every Europa League game until the final in Bilbao, Spain, on May 21 — if United get that far.
The reason? Failure to win the Europa League would mean United miss out on a place in next season’s Champions League, triggering a financial nightmare that would leave a £100 million hole (at least) in the club’s budget at a time when money is already tight at Old Trafford.
United’s Premier League struggles — they sit in 14th position, 11 points behind sixth-place Newcastle — and elimination from the FA Cup with a fifth-round defeat at home to Fulham on Sunday mean they cannot qualify for Europe via any other route this season than by winning the Europa League. Win it, as Jose Mourinho’s United did in 2017, and the club will unlock the door to the Champions League’s financial riches, fast-track United’s path back to stability and enable coach Ruben Amorim to start the work of rebuilding the team.
But United are now playing a high-stakes game and failure to win the Europa League will send the club sliding into a bleak future that could take years to escape.
The team are losing, the financial results are bad, staff at all levels have been informed of further job cuts to come — adding to the roughly 200 who left in the final months of 2024 — and supporters are planning a protest against the owners, the Glazer family, and Sir Jim Ratcliffe’s INEOS Group before Sunday’s clash at Old Trafford against Arsenal.
The Europa League offers United an escape route from their problems. Here’s why it’s vital they take it.
How bad are United’s finances?
United’s financial headroom due to PSR is now minimal. The most recent accounts covering the period between Oct.1-Dec. 31, 2024, revealed a 12% drop fall in revenue, operating profit down 88.7%, an increase in the club’s debt to £515.7m ($655.4m) and a total of £414m ($526.1m) owed in transfer fees. [It’s worth noting that owed fees aren’t unusual in football: Chelsea (£491m), Tottenham (£307m) and Arsenal (£268m) Manchester City (£230m) and Liverpool (£123m) also owe money on previous incoming transfers.]
Interest payments on United’s debt are now £35m ($44.5m) a year and this season has also seen United pay out compensation totalling £14.5m ($18.4m) to manager Erik ten Hag, sporting Dan Ashworth and several coaches following dismissals earlier this season.
United’s financial problems are why Ratcliffe’s INEOS Group, who now control the club as minority shareholders, have embarked on a huge cost-cutting drive including up to 400 job cuts, ticket price rises and the end of free meals for non-playing staff at the club.
More bad news: United earned £40.5m ($51.5m) from the Premier League merit payment scheme by finishing eighth — their worst-ever Premier League finish — last season. With each position worth £3.1m ($3.9m), United would only earn £21.8m ($27.7m) if they fail to improve on their current position of 14th, leading to another significant drop in earnings.
Why is European qualification so important?
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United’s problem is that they have lots of players — namely Marcus Rashford, Casemiro, Mason Mount and Antony — who are surplus to requirements, but their diminishing transfer value (due to years of poor performances) and/or high salary makes it difficult to move them on without incurring a big financial loss.
United may have to subsidise a move for former academy star Rashford, now on loan at Aston Villa, due to a lack of clubs being prepared to take on the remaining three years of his £325,000-a-week salary.
Casemiro, a £70m ($89.1m) signing on a four-year contract from Real Madrid in August 2022, would be worth £17.5m ($22.2m) on the club’s balance sheet next season due to the amortization of his transfer fee. As a consequence, United would need a club to pay £17.5m to sign the 33-year-old this summer — anything less would be recorded as a financial loss, edging United closer to breaching PSR.
United need to rebuild their squad, but with money raised from moving on homegrown players — who did not cost a transfer fee — enabling any fee to be classed as pure profit in the accounts, players such as Kobbie Mainoo, Alejandro Garnacho and Rashford are the most attractive potential outgoings to the club. Any cash generated would be crucial to avoiding a PSR breach.
As for expensive flops including Casemiro, Mount, Antony, Rasmus Højlund and Joshua Zirkzee, United face little or no chance of avoiding big losses if they offload any of them. They are the football equivalent of extravagant credit card purchases with a big pricetag and minimal resale value.
Is there a shortcut out of the mess?
Winning the Europa League is the quickest way for United to get back to somewhere close to a sound financial footing. It’s a magic wand that opens the door to a brighter future, albeit one that would still involve servicing the debt and rebuilding the squad.
However, United’s financial problems are deep-rooted and cannot be solved by annually walking a tightrope of attempting to qualify for the Champions League. United must either renovate Old Trafford or build a new stadium, which would cost at least £1 billion ($1.27bn). A squad overhaul is also crucial, but unavoidably expensive.
“If you look at United’s most recent accounts, the fundamentals are still quite impressive from a match-day and commercial revenue perspective,” Chris Mann, Head of Sporting Strategy at Sportsology, told ESPN. “But the poor performance on the pitch is really hurting them. “It feels like they are stuck in a Catch-22 situation — a club with a Champions League cost-base and a mid-table reality, but at the same time as trying to make the team more competitive and get it back in the top six.”
So is there a way out beyond simply winning the Europa League?
“Player recruitment is an area United need to improve,” Mann said. “They have signed lots of players who haven’t performed for significant sums and have therefore declined in value.
“There is also the route of private equity investment, something Ratcliffe has shown he hasn’t been averse to securing with other businesses, and the City Football Group and Atletico Madrid have both taken this option in recent years, but the risk with that is investors wanting a quick return.
“The panacea would be the Glazers selling up completely and clearing the debt, but that is almost certainly not going to happen. Unfortunately, United are in a really difficult position and there are no easy solutions.”
Ultimately, United need to win on the pitch to make everything better off it. And nothing could possibly be bigger right now than Amorim’s team winning the Europa League this season.
