Amidst a rollercoaster season plagued by setbacks, Manchester United finds itself at a crossroads, grappling with the future of its manager, Erik ten Hag. Sir Jim Ratcliffe, the club’s new co-owner, is implementing a strategic overhaul, with significant changes already underway. Omar Berrada is set to assume the role of CEO, while Jason Wilcox joins as Technical Director from Southampton. The club is also pursuing compensation from Newcastle United for Sporting Director Dan Ashworth. However, the fate of Erik ten Hag remains uncertain, as the team languishes in seventh place in the Premier League and crashed out of Europe in the group stages.
United narrowly escaped an embarrassing FA Cup loss to Coventry City on Sunday but is facing the reality of a disappointing season. One major factor influencing the club’s decision regarding ten Hag is the league’s Profit and Sustainability Rules (PSR). According to The Times, sacking ten Hag and his staff would cost around £10 million. To maintain compliance, clubs must limit their losses to £105 million over a three-year rolling period or £35 million per season. The consequences of breaching the PSR can be severe, as evidenced by points deductions imposed on Everton and Nottingham Forest this season.
However, Dave Powell, Chief Business of Football Writer for Reach PLC, highlights the nuances of United’s financial situation, which differs from other clubs. United’s £15 million loss limit per season is based on the absence of owner funding over the past three years. The recent acquisition of a stake in the club by Sir Jim Ratcliffe potentially opens the door for a higher threshold in the next assessment period. In addition, United’s astute management of its finances, including allowable deductions and pandemic-related relief, has created some room for maneuver.
Powell emphasizes that financial concerns should not be the primary driver behind a potential managerial change. Instead, strategic football decisions will ultimately guide the club’s decision. However, the PSR’s impact on United’s financial outlook, particularly in light of the transition to a squad cost ratio in line with UEFA’s regulations from 2025, warrants careful consideration. The club will undoubtedly weigh the potential financial impact of a managerial change against its long-term footballing ambitions.
