Manchester United could be set to save £25 million a year following the club’s next planned round of job cuts, according to a football expert.
Financial advisor Stefan Borson reveals the brutal cost-cutting measures implemented by INEOS, which saw around 250 staff members lose their jobs, saved the club £8.6 million.
“It might save let’s say £25million a year by sacking 400 people at the lower levels. We know that the cost of the first 250 people to be made redundant by United was £8.6million. We know that from the accounts,” Borson states.
“That gives you an average of around about £35,000 per person as a redundancy cost. That would imply that those people probably have something like £70,000-100,000 salaries on average. It’s quite a lot and it’s quite senior people.
“Therefore, let’s say two, three, four times that in an annualised saving. If you think about maybe they got three months’ notice, you then times it by four to work out what an annualised cost might be of those individuals.”
The next “round of redundancies” is expected to total around 200 members of the Old Trafford workforce, leading Borson to assess a total saving of around £25 million, based on the figures from the previous cuts.
However, the expert warns, these savings are not sufficient to offset “expensive player wages, amortisation and interest costs” – the big-hitters draining the Red Devils’ finances over the past decade.
“When they talk about losses over the last five years, they’re talking about the operating level. That’s after very expensive player wages, amortisation and interest costs.
“The interesting thing is, if you sack or make redundant 450 people but can’t deal with player wages, amortisation and the interest cost, unsurprisingly, that doesn’t particularly help your operating profit that much.”
United will focus on shifting deadwood from Ruben Amorim’s first-team squad with the club pushing for the permanent departures of their two biggest earners – Marcus Rashford and Casemiro.
Shifting either of these players in the summer would provide a similar financial boost to the sacking of 200 regular staff members, Borson contends.
“It could be sort of £25million of the ones that have gone. We know that £25million is around about what Casemiro and Rashford are each paid, so just one player is paid around those sorts of numbers. It’s not easy for Manchester United to deal with profitability by making redundant lots of junior staff.”
It may not be “easy” for INEOS to fix the club’s finances with redundancies, but the Petrochemical giant will utilise every conceivable avenue to improve the situation at Old Trafford; and no one is safe from this brutal cost-cutting approach, not even Sir Alex Ferguson.
But if this approach helps Amorim to overhaul the first-team this summer, it may be a price worth paying.
Featured image Michael Regan via Getty Images
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Darragh Fox
Darragh is a writer for The Peoples Person who spent three years as a history graduate slowly realising football was by far the most interesting thing to write about.
