Love Football, Not the Business

Big numbers are part and parcel of modern football – from eye-watering player wages to multi-million-pound sponsorship deals. These figures grab headlines and spark debates among fans, but they often obscure a more fundamental question: how do football clubs actually make their money? And more importantly, how sustainable is that income? 

Last week, Manchester United (I’m not a supporter) released their full-year financial results. The club reported revenue of £666.5 million, a 10% increase year-on-year. Despite this growth, they posted an operating loss of £18.4 million, though this was a marked improvement from the £69.3 million loss recorded the previous year. 

Football clubs typically earn revenue from three main streams: 

1. Matchday – ticket sales and hospitality packages. 
2. Broadcasting – payments from domestic and international competitions. 
3. Commercial – sponsorships, merchandise, and other brand-related deals. 

For Manchester United: 

• Matchday revenue accounted for 24.1% of total income (up from 20.7%). 
• Broadcasting revenue dropped to 25.9% (from 33.5%). 
• Commercial revenue rose to 50% (from 45.8%).  

United has long been considered a commercial powerhouse in football, leveraging its global brand through sponsorships and marquee signings. But those signings come at a cost – a massive one. 

The club’s employee benefit expenses for the year totalled £313 million. This figure becomes particularly problematic when broadcasting income declines. For the 2024/25 season, the Premier League distributed £2.834 billion across participating clubs. League winners Liverpool earned just under £175 million, while 15th-placed Manchester United received £136 million. United’s total broadcasting revenue for the year was £173 million, down 22% from the previous year. 

To support its operations, Manchester United has also leaned heavily on debt. The club’s debt-to-equity ratio currently stands at 333%, down from 383% last year. This reduction is largely due to cost-cutting measures introduced by Jim Ratcliffe, along with his £79 million capital injection into the club last year. 

What’s particularly striking is the club’s valuation. Despite being one of the most recognisable sports brands globally, Manchester United has a market cap of just £2.6 billion. For comparison, Shoprite, a retailer with most of its footprint in South Africa, boasts an exchange-rate adjusted market cap of over £7.1 billion — roughly 2.7 times the size of Manchester United.