Ratcliffe’s cost-cutting strategy deepens crisis at Old Trafford

Manchester United co-owner Sir Jim Ratcliffe‘s tenure at the club has been marked by a series of contradictory moves. While he has invested heavily at Old Trafford, his cost-cutting measures have sparked controversy and raised concerns about its long-term direction.

Fresh off the dismissal of manager Erik ten Hag, Ratcliffe is poised to dip into the club’s coffers once more. Reports indicate that United will pay the Dutch manager a hefty £15 million in severance, along with a possible £8.3 million release fee to secure Sporting Lisbon’s Ruben Amorim as his successor.

Having invested £1.25 billion for a 27.7% stake in the club, Ratcliffe has implemented various cost-cutting measures aimed at reducing wasteful spending. However, these austerity moves have faced widespread disapproval.

Alongside slashing 250 jobs to save £45 million annually, perks for staff following United’s FA Cup triumph over Manchester City have been scaled back. Perhaps most controversially, Ratcliffe’s regime removed Sir Alex Ferguson from his role as club ambassador, cutting his £2 million annual salary before parting ways with Ten Hag.

Defender Jonny Evans expressed dismay, stating that the cuts are “hard and difficult to see,” especially for long-term colleagues. Former United assistant Rene Meulensteen echoed these concerns, questioning the justification behind the changes. One former executive, speaking anonymously, voiced alarm, stating, “My main issue isn’t the sporting side, which is volatile; it’s the destruction of the culture that underpins a meaningful sporting organisation,” as quoted by Inside World Football.

Ratcliffe has pointed to United’s recent financial figures, reporting a £113 million net loss in September, slightly down from the £115.5 million loss in 2021/22. However, continued underperformance on the pitch will likely exacerbate these financial challenges.

Despite having the world’s largest kit deal with Adidas, a £10 million penalty clause activates each season they fail to qualify for the UEFA Champions League. With United currently sitting 14th in the Premier League, securing a place in Europe’s top competition is far from assured.

In addition to his initial £1.25 billion investment, Ratcliffe has committed £153 million toward infrastructure improvements, including upgrades to training facilities, with a further £76.5 million earmarked by year-end. Plans for a new stadium to replace Old Trafford, potentially costing over £2 billion, further underscore the financial challenges Ratcliffe faces.

With goodwill from his early tenure waning, Ratcliffe is now under intense pressure to make the right managerial appointment.