Manchester United missed the European game

How exactly is this done?

Manchester United ranked only 15th in the Premier League last season, missed the European Cup (after losing to Tottenham in the Europa League final), has not sold any players so far this summer, and has maintained a huge negative net transfer expenses for the past 10-12 years. In addition, in the midst of a massive layoff in March this year, new owner Ratcliff issued the following statement:

"By the end of 2025, the club will run out of funds. This is the first time we have said this publicly - but it is the fact. If there is no change, Manchester United will go bankrupt before Christmas. Do you want to run the club the way the media hopes, or the way you think you think is the best?"

But at the same time, the Red Devils have signed Cunya and Mbemo this summer for a total of 150 million to 170 million euros, including bonuses. This week, they also submitted a quotation of €75 million in basic transfer fee + €10 million in additional terms to Red Bull Leipzig, seeking a striker Seschko - the player contract has been reportedly agreed. In addition, it has been reported that Manchester United is also interested in Brighton's defensive midfielder Carlos Baleba.

So where does the money come from? ——How did Manchester United continue to abide by fiscal rules? Chris Weatherspoon, a Premier League financial expert, gave a clear explanation in the column of authoritative media The Athletic. The following is a simplified interpretation of the key points.

Given Manchester United's broader financial problems, the situation seems even more bizarre.

The points listed above are just the tip of the iceberg. In addition, there are the following situations: As early as this spring, Ratcliff pointed out that even if the club does not make any new signings this summer, they still need to "write a £89 million check" to pay the transfer transactions that were paid in previous installments: deals including Sancho, Anthony, Hoylen, Casemiro and Onana.

Since 2015, Manchester United has exceeded revenues every season - and often significantly.

(As shown in The Athletic chart: purchase spending on the left and sales income on the right.)

In January, the club issued a statement (responding to criticisms of raising ticket prices) warning that "if no measures are taken, the club will face the risk of violating the Premier League Profit and Sustainability Rules (PSR) and the UEFA Fiscal Fairness Act (FFP) in the coming years."

At the same time, they lay off employees and closed multiple offices.

Ratcliff also promised to invest heavily in upgrading infrastructure. The total debt of the club exceeds 900 million euros.

But! The club found legal evasion through its "secondary" subsidiary. In June, The Athletic revealed how Manchester United regularly buffered or offset losses that would have broken through financial restrictions. This mechanism is hidden in the account of a little-known company: Red Football Limited.

This company was registered in 2005 and was a subsidiary of a Manchester United listed company shortly before the acquisition of the Glazer family. Manchester United listed company is the listed parent company that releases quarterly financial reports.

The key is that the Premier League PSR rules require that the club submit financial data not from the entire group, but from specific entities reporting to the Premier League.

In Manchester United's case, this reporting entity is not a Manchester United listed company, but its subsidiary Red Devils Football Co., Ltd.

Historically, the data of the two are closely related. But during a financial downturn, the numbers began to diverge. For example, in the 2023/24 season: parent company pre-tax loss: 131 million pounds, subsidiary (Red Devils Football) pre-tax loss: 36 million pounds, three years cumulative losses: parent company £311 million vs subsidiary £200 million - a difference of 111 million pounds, according to data from Manchester United listed companies, the club will be close to the PSR cap - although not exceeding it yet. But according to the Red Devils football account, the club has more room. In fact, current estimates show that Manchester United is still 50 million pounds away from the three-year maximum loss limit allowed by the Premier League, 105 million pounds. The forecast loss for 2026 is only £36 million, well below the £105 million cap.

How does this comply with the specification?

is compliant with the norm - thanks to the financial structure design through multiple corporate entities. Chelsea and Manchester City also use similar frameworks, but United have optimized the process over the past two decades through Red Devils Football Co., Ltd.

The main expenses are retained outside of Red Devils football (for example, most loan interest is processed through a separate entity). Certain income and costs are excluded from PSR calculations, such as: group transfers, foreign exchange income (these exclusions are explicitly permitted under current financial rules).

You can fairly describe it as a vulnerability. Clubs still have to pay their debts – but not all debts will be included in regulatory caps such as PSR or FFP.

Other financial leverage of Manchester United

Last season, business income increased and wage expenditures fell (partly due to layoffs), leaving losses in controllable range. This is also one of the reasons why the Cunha deal was rushing to be completed by June 30 - accounting for some of the expenditures in the previous fiscal year. In addition, transfer fees are amortized during the player's contract period, allocating the financial impact over many years.

followed by transfer income. These are not big sales, but income from the second transfer share terms: Alvaro Fernandez (Benfica → Real Madrid), Ellanda (Nottingham Forest → Newcastle), Oedley (Legia → Strasbourg). Total: About 30 million euros of capital inflows were brought.

In addition, Manchester United saved 14 million euros by lending Rashford to Barcelona as Barcelona bears 100% of his salary.

The next one is structured debt repayment: the largest leverage. United used a clever form of refinancing to free up cash.

Simplified Note:

- They paid off £50 million in old debt;

- This lowered their liabilities below the regulatory threshold;

- This move allowed them to borrow £140 million.

Results: Possible net gain of £90 million despite new interest burdens.

But this is high risk - the fault tolerance space has become smaller

This debt-based avoidance method has high risk and high returns. To make it successful, revenue must increase – which means:

– Return to the European Games (preferably Champions League);

– Players make a profit by selling;

– Premier League ranks high for a generous bonus.

If these are not achieved, the club's credit space may evaporate rapidly. So, this can be seen as a gamble for Amorin to revive the team—rather than to be ranked 10th+ again. Therefore, players need to be sold now, according to The Athletic, Manchester United was allowed to lose up to £141 million in the 2024/25 season. But as transfer spending has exceeded £200 million, they now need to sell players. Fortunately, they do have valuable assets:

Onana - available for sale, but need to find a replacement

Ganacho - likely to be high; Chelsea is still interested (40-60 million euros)

Sancho - valuation 20-25 million euros

Anthony - valuation 40-50 million euros; negotiating with Real Betis

Hoilen - possible lease, with a buyout option of 35-40 million euros

Rashford - Barcelona has a purchase option of 30 million euros

Manchester United can also raise a large amount of money by selling the following players if needed:

Kobe Menu - may sell 60-70 million euros (as a youth training product, this is a net profit)

Bruno Fernandez - Riyadh Crescent was reported to have been willing to bid more than 80 million euros

Bruno was not sold, indicating that the financial situation may not be as bad as it seems.

The Athletic concluded:

"Even now, Manchester United can still spend money as long as they want. Cash flow needs to be managed more carefully than in Old Trafford in the past, but recent actions combined with the club's ongoing borrowing ability (if they want), mean that they still have a path to use."