Manchester United (NYSE: MANU) fell deeper into the red in the third financial quarter of a tough season, with the English Premier League club confirming job losses on Wednesday and an increase in ticket prices.
United has seen a raft of changes since British billionaire and INEOS boss Jim Ratcliffe acquired a 27.7% stake in the club earlier this year and took charge of its football operations.
The 20-time English champions finished in only eighth place in the Premier League and its management and owners have been reviewing all aspects of the club’s activities.
United plans to cut about 250 jobs as part of a club-wide redundancy program. It will raise ticket prices by about 5% for the upcoming season.
While Erik ten Hag will stay on as head coach for the new season, the reshaped club has a new CEO and finance chief, alongside a new sporting director and technical director, poaching many of them from rivals to drive change.
“The club is undergoing a meaningful transition both on the pitch and off in the operations of the company, which should serve it well over the next few years,” said Tim Fidler, Portfolio Manager at Ariel Investments, the third-largest investor in the club’s publicly traded shares.
“Despite the disruption, we are optimistic that the club’s long-term prospects are in excellent health,” he added, saying plans to develop the Old Trafford stadium would be key.
United will play in the second-tier Europa League next season thanks to the FA Cup final win over local rival Manchester City in May.
Under the leadership of the Glazer family, who remain majority owners, the club has been criticized over the past decade for splurging on players, ranging from Argentina’s World Cup winner Angel Di María to Brazilian winger Antony.
Player and staff wages in the third quarter rose 7.3%, to 91.2 million pounds. Debt stood at $650 million at the end of March.
It has been a quiet start to the transfer window and Ratcliffe has been clear that United won’t overspend in a bid to win the biggest trophies again.
The Old Trafford club reported a net loss of 71.4 million pounds ($91.4 million) for the three months ended March 31, compared with a loss of 5.6 million pounds a year earlier.
It now expects annual revenue for the year to the end of June of about 660 million pounds and adjusted core profit of about 140 million pounds, slightly below the maximum levels in a range it gave earlier.
New CEO Omar Berrada will join United this weekend from Manchester City’s parent company City Football Group.
($1 = 0.7810 pounds)
(Source: ReutersReuters)
