What Business owners can learn from Manchester United's latest accounts

A Decade of Mismanagement

In the world of sports, Manchester United is an iconic name, synonymous with success, global appeal, and dominance in football. However, in recent years, the club's performance, both on and off the field, has faced significant challenges. There was some optimism when the majority owners of the club, Joel and Avram Glazer, sold 28% of the club to Sir Jim Radcliffe, founder of INEOS, in late 2023. Radcliffe is the wealthiest person in Britain, and a boyhood United fan, who promised to 'put the Manchester into Manchester United' ,after taking control of football operations - however his short time in charge has been nothing short of tumultuous to say the least. Whilst there has been some big positives, United's latest financial accounts have further highlighted the structural, financial and operational issues that the club face, with clubs supporters trust citing "a decade of mismanagement" as the main catalyst for this.

In this blog, we will take a look at some of the big talking points that have emerged from the clubs quarterly accounts, to find out what lessons Owners and Directors can take away and apply to their own Businesses.

A lack of identity leads to costly fixes

One of the biggest talking points which emerged from Wednesdays accounts was how much the club spent on sacking former coach Erik ten Hag and his coaching staff. Whilst this is part and parcel of football, the reason it sparked ridicule is because Radcliffe and his sporting team conducted a 'strategic review' of Ten hag and the teams performance as a whole in the summer, whilst simultaneously interviewing other managers. This very public saga suggested they were not convinced by Ten Hag (who was hired before their partial takeover), despite their statements to the contrary. Despite all of this, they gave him a new contract extension, only to dismiss him a few months into this season. Radcliffe's team had also paid to release Director of football Dan Ashworth from his gardening leave, set by former club Newcastle, only to fire him 5 months later. The total amount spent on payoffs amounted to a staggering £14.5 million, with £4.1 million spent on the hiring and firing of Ashworth alone.

This outlay suggests Radcliffe and his leadership group are not aligned in their strategic vision for the club. This has been something levelled at INEOS at Nice, the French football club that Radcliffe also owns. Since they acquired Nice in 2019, the team has had no fewer than 7 managers. From the outside looking in, it appears that they want very instant success in a sport where the most successful teams can sometimes take years to gel and reach their goals.

This is not a new issue, however. Before Radcliffe and INEOS came aboard, the Glazers have been frequently criticised for their lack of sporting vision for the club, hiring coaches with completely different styles, tactics, and transfer targets from the previous one. This has often meant that the playing staff that one manager wanted are totally unsuitable to the next, requiring further financial investment to bring in players that are suitable.

This is backed up by former defender, Raphael Varane, who coincidentally gave a tell-all interview to the Athletic this week about his time at the club. He noted the difference between United and fellow super club Real Madrid, who he played for before signing for the Red Devils:

"Even from the inside as a player, there wasn't a clear structure on how things were going to work. There hasn't been a fixed methodology for years. At Madrid, they have a defined way of doing things at every level of the club. At Manchester, it was not clear or defined enough to know how to recruit, how to play, how to communicate. There weren't the same procedures, processes, structure." - Raphael Varane (via The Athletic)

Without solid planning, Manchester United has found itself making knee-jerk decisions based on immediate needs rather than believing in a coherent vision for the future, and sticking by it. Business owners must ensure that they are not merely reacting to short-term challenges but instead are investing time and resources into crafting a vision that will guide them over the long haul. Whether in a sports team or a tech start-up, a lack of foresight can cause operational inefficiencies and wasted resources.

Resting on Laurels can lead to losses, failures, and redundancies

Manchester United's financial struggles are partly a result of poor internal planning spanning well beyond the last decade. United were the most successful club in England for 26 years under the stewardship of Sir Alex Ferguson, who was often praised for his ability to manage virtually all operations within the club, from boardroom to training pitch. His reign was so long that it felt as though United would always be there or there abouts to compete for big trophies each season, which would in turn bring with it prize money, and lucrative commercial opportunities. But since Ferguson retired in 2013, the club has continued to make expensive investments, such as signing high-profile players and managers, without fully assessing how they would fit within the club, their potential return on investment, and the long term impacts to cash flow.

The ownership seemingly didn't have a thorough contingency plan for when Ferguson was to eventually retire - leaving a huge void and an incredible amount of pressure on the new talent brought in over the 11 years since. The Glazers didn't hire a Director of football (a post that has become increasingly important in football over the last 2 decades) until 2021.

This lack of proactivity has led to the many so-called 'panic buys' in periods of particular turmoil in recent years, the greatest example of this was the signing of winger Antony in 2022. Antony was valued by the clubs transfer department at around £35 million pounds, but after a terrible start to the season, and only a few days left of the that summers transfer window, the club desperately paid a massive £85 million to his parent club Ajax, who had all of the bargaining power to command an inflated fee.

The clubs historic failure to conduct internal contingency plans, and self assess has lead to this pattern of reactionary expenditure - resulting in increased debt levels, higher wages, and poor returns from commercial ventures, all of which are now reflected in the club’s financial losses. The club owes a £414 million in transfer fees to other clubs, and debt is up from £506.6 million to £515.7 million.

This increase in debt has crippled the clubs ability to buy the players it needs in recent seasons. In turn, on pitch performance has massively declined, and the teams failure to qualify for the Champions League last season has lead to a 42% decrease in broadcast revenue. As a result Radcliffe and INEOS have had to make a number of hugely unpopular decisions, from making hundreds of staff redundant, cutting money to charities, and raising ticket prices to £66 minimum across all ages.

For business owners, this should serve as a reminder to proactively plan for all eventualities. What will your business do if an important staff member leaves? Is your Business doing everything it can to remain successful? How does your Business stack up against competitors? Business owners need to have a thorough understanding of the market and the long-term implications of their decisions. This includes being cautious about over-leveraging, making big investments without understanding their full impact, and ensuring that decisions are made with a clear understanding of future trends and risks. As you can see, the domino effect can be massive.

The Importance of Good PR

Another lesson to take from Manchester United’s recent struggles is the importance of maintaining positive relationships with both internal and external stakeholders. This is something that the Glazer family have struggled with ever since they purchased the club in 2005. Their lack of engagement with fans and how seldom they were spotted at games, juxtaposed with their enthusiasm for the other sports club they own - the Tampa Bay Buccaneers - has led to an entire fan movement emerging to try and force them to selling up.

Ownership PR—the way owners manage their public image and communicate with their stakeholders—is often an overlooked but critical part of a business's success. When owners make decisions that are seen as self-serving, poorly timed, or detached from the needs and values of the fanbase or employees, it can quickly erode trust and damage relationships. This can result in diminished morale within the organisation, protests from fans, and even loss of support from key sponsors or investors.

As previously mentioned, many of the decisions made by Radcliffe and INEOS have been unfavourable. Take for example his justification for the increase in ticket prices. Whilst he acknowledged it was a tough decision, Radcliffe cited the fact that London club Fulham's ticket prices were higher than United's, despite being a far lesser club in terms of stature and success.

"I don't think it makes sense for a ticket to cost less than a ticket to see Fulham." - Sir Jim Radcliffe (via United we Stand)

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This quote angered many fans, who pointed out that Fulham is one of the more affluent areas in the countries capital, and that many match going United fans are from areas of Northern England that earn significantly less.

For business owners, maintaining strong and positive relationships with all stakeholders is essential. Decisions that negatively impact employees or customers, or that seem to disregard their needs and expectations, can cause a ripple effect that is difficult to recover from. Similarly, transparent and open communication is key to building loyalty and maintaining a positive public image. While not every decision will be popular, owners should ensure that their choices are explained clearly, are in line with the company’s core values, and are seen as efforts to improve the long-term future of the business.

The Power of Commercial strength

Despite Manchester United's operational and on-pitch struggles, the club has proven that a strong commercial strategy can still deliver impressive revenue results. In the last quarter, Manchester United reported an 18.5% increase in commercial revenue, underscoring the power of its global brand and marketing efforts. This remarkable growth in commercial income highlights the importance of diversifying revenue streams beyond just performance on the field. Part of this came as a result of a new shirt sponsorship deal.

The club states on its own website that its commercial model is 3-fold: sponsorship; retail merchandising & product licensing, and mobile content

Football finance expert Kieran Maguire has hailed United's ability to perform on a commercial level, despite on field failings.

"Manchester United's ability to monetise their badge is unparalleled as far as football is concerned" - Kieran Maguire (via Football Insider)

For business owners, this serves as a valuable reminder of the importance of building a brand that resonates with customers, clients, and partners—regardless of the short-term challenges faced by the company. Manchester United’s ability to generate significant revenue from sponsorships, merchandising, and partnerships despite underperformance shows that a strong brand presence and effective marketing can buffer against operational setbacks.

Business owners should recognize the importance of cultivating a business identity that resonates with their audience, creating strong relationships with customers and partners that extend beyond a single product or service offering. By focusing on long-term brand loyalty, diversifying revenue channels, and building a reputation that stands the test of time, even businesses facing internal difficulties can continue to thrive commercially. Manchester United’s success in this area is a testament to the value of investing in your brand and maintaining a broad, appealing market presence—even in times of adversity.

Conclusion

Manchester United’s most recent financial accounts provides a cautionary tale for business owners. Whilst the club undoubtedly has fantastic commercial staying power, and brand retention, it's operational struggles are rooted in a lack of effective planning, foresight, cash flow management, and talent selection. These issues have not only hindered their on-field success but also caused financial instability, highlighting the importance of good business practices in any industry.

For business owners, the key takeaways are clear: ensure top-down planning is strategic and long-term, make talent choices that align with the company’s vision, and maintain consistency in leadership and decision-making, and explore commercial opportunities and other revenue streams to build a greater safety net. By taking stock of these lessons, Business owners can help ensure that their businesses are better positioned for long-term success, even in the face of uncertainty.

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