Debt Mounting, MU's Financial Future a Question Mark

JAKARTA - Manchester United's debt jumped sharply to reach £1.29 billion or around Rp28.7 trillion, based on the club's latest financial report. The surge sparked concerns, although management said there were still positive signals from the financial performance of the first quarter of this season.

Manchester United CEO Omar Berrada said the club recorded solid financial results after the implementation of austerity policies by minority owner Sir Jim Ratcliffe. The policy generated an operating profit of £13.3 million. On the other hand, the club's debt burden and financial costs continued to increase.

Manchester United's debt is divided into two main categories, namely financial debt and trade debt. Financial debt from the club's acquisition by the Glazer family in 2005 now reaches a record high of £749.2 million, up from £714 million in the same period last year.

This increase was triggered by an additional withdrawal of £105 million from the revolving credit facility to fund the transfer of players such as Benjamin Sesko, Bryan Mbeumo, Matheus Cunha, and Senne Lammens in the summer transfer market. Of the total credit ceiling of £350 million, the club has used £268 million.

Meanwhile, the club's cash position has plummeted from £149.6 million to £80.5 million. The net debt resulting from the Glazer family acquisition remains at £481 million, with the financial costs to be borne reaching £22.6 million.

On the trade debt side, short-term liabilities increased to £323.4 million, while long-term liabilities rose to £216.3 million. Overall, Manchester United's total debt increased by £54.8 million to reach £1.29 billion.

Sir Jim Ratcliffe previously revealed that the club was still bearing the financial burden of past transfer policies. Manchester United still has payment obligations for a number of players, such as Antony, Casemiro, Andre Onana, Rasmus Hojlund, and Jadon Sancho. Even Sancho, who is currently on loan to Chelsea, still has an obligation of around £17 million.

Amid a debt surge, Manchester United is starting to feel the impact of austerity policies. Two waves of layoffs reduced the number of employees from around 1,150 to 700 people. A number of staff facilities were also cut, including the elimination of free lunches.

The move reduces the payroll burden by £6.6 million to £73.6 million. The salary portion now accounts for only 52.5 percent of total revenue, down from 56 percent last season. Total club operating costs also fell 7.1 percent. Management remains optimistic that annual revenue will be in the range of £640 million to £660 million.

To rein in further spending, Manchester United have loaned out a number of high-paid players, such as Marcus Rashford, Jadon Sancho, Rasmus Hojlund and Andre Onana, with the loaning clubs covering a large proportion of their wages. Casemiro's contract expires on June 30, 2026 and his extension option has not been activated, while Harry Maguire is also entering the final six months of his contract.

Despite recording operating profit, the financial statements showed an alarming record. The profit was also supported by income of £45 million from the sale of Alejandro Garnacho and Antony. After taking into account financial costs of £22.6 million, the £13.3 million profit turned into a loss of £8.4 million, in contrast to the £1.6 million profit in the same period last year.

This situation was exacerbated by Manchester United's failure to qualify for European competitions, which only happened for the second time in the last 35 years. United finished in 15th place in the English League and lost in the Europa League final to Tottenham Hotspur. As a result, the club's revenue fell from £143.1 million to £140.3 million, while sponsor revenue decreased by £4.8 million after the cooperation with Tezos ended. However, the club said negotiations with new sponsor partners were going well.

Manchester United is now at a crossroads. The austerity policy is starting to show results, but the mountain of debt remains a major challenge that the club management must immediately address.