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Manchester United recently published their annual financial statements, showcasing a mix of record-breaking revenues and significant net losses.
The financial landscape of top-flight football continues to evolve, with clubs navigating complex regulations to maintain both competitive and fiscal responsibility.
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As financial fair play remains a hot topic, clubs like Manchester United are under increased scrutiny to adhere to established guidelines.
The Premier League’s Profit and Sustainability Rules (PSR) are designed to ensure clubs operate within their means, limiting allowable losses to £105 million over a rolling three-year period.
Breaching these rules can lead to severe penalties, including points deductions, which could drastically affect a club’s standing in the league.
Understanding and complying with these regulations is crucial for clubs aiming to compete at the highest level without facing sanctions.
Despite posting a net loss of £113.2 million for 2023-24, Manchester United have not breached PSR regulations, according to former Manchester City financial adviser Stefan Borson.
“I think there are a couple of things that are relevant here,” Borson told Football Insider.
“First of all, we understand that they have not failed PSR.”
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United’s revenue rose from £648.4 million in 2022-23 to a club-record £661.8 million last season.
Under PSR rules, clubs can only lose a maximum of £105 million over a rolling three-year period, with any potential breach likely to incur a points deduction.
However, Erik ten Hag’s side are expected to avoid a financial breach after they have been allowed to add back £40 million in Covid losses and more than £40 million for their strategic review.
“I doubt that they would have been so forthright in their statement, which clearly goes to the New York Stock Exchange,” Borson continued.
“It’s very unlikely that they would say anything where there was any risk of failure from a PSR perspective, so they have been very clear they have not failed.”
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Manchester United’s new chief executive, Omar Berrada, revealed the club remains committed to complying with the Premier League’s PSR rules and UEFA’s Financial Fair Play (FFP) regulations after releasing their latest accounts.
Borson added, “You can therefore assume that they have got the add backs legitimately for things like the women’s team, the academy, community spending, and other depreciation and amortisation.”
“All of that plus the Covid allowance that we discovered that they had for 2021/22 of £40 million plus an add back of around £40 million spent on the strategic review,” he said.
“When you add back all of that, it’s a very sizeable amount, that’s how you then get them under the £105 million limit.”
The clarification from Borson provides reassurance to Manchester United fans concerned about potential sanctions like points deduction.
The club’s financial strategy appears to align with regulatory requirements, mitigating the risk of any punitive actions that could affect their Premier League campaign.
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