According to TA, Manchester United is currently using subsidiaries accounts, which are submitted to the Premier League and UEFA for testing expenditure regulations, so the club has not violated the top league expenditure rules.
Although Manchester United had its lowest ranking since 1974 in the Premier League last season, failed to qualify for European tournaments, and according to the club's part owner Sir Ratcliffe, the club could go bankrupt before Christmas without cost cuts.
However, Manchester United recently signed Cunha from Wolves for £62.5 million and offered a offer of up to £55 million for Brentford's Mbemo. This has raised questions about whether Manchester United may violate the Premier League Profit and Sustainability Rules (PSR).
Manchester United had previously expressed their concerns about complying with PSR rules, and in January responding to criticism from the fan group about rising mid-season ticket prices, Manchester United issued a statement saying that unless action is taken, they "will face the risk of not being able to comply with PSR/FFP requirements in the coming years".
However, in the latest full-year financial report released in September, CEO Berlada said that Manchester United remained "committed to and abide by" the financial sustainability rules of the Premier League and UEFA.
In the end, Berlada's confidence was verified and Manchester United was not punished by the Premier League for violating the 2023/24 season PSR. In the same round of interviews, Ratcliff also said there will be no problems in the future, claiming that Manchester United is "in a comfortable zone" in terms of spending restrictions.
So, is Manchester United really risky? The answer may lie in the consolidated group accounts of a little-known company, Red Football Limited. The company was registered in the UK Company Registration in February 2005 and is a subsidiary of Manchester United's final parent company Manchester United Ltd., which is listed on the New York Stock Exchange and publishes quarterly financial reports.
People familiar with the matter revealed that Red Football Co., Ltd.'s accounts were submitted to the Premier League and UEFA for testing expenditure regulations. Although the parent company is registered in the Cayman Islands, Red Football Limited is registered in the UK. According to Premier League rules, clubs can only submit accounts of registered companies in the UK for PSR testing.
Historically, there is little difference between the accounts of Red Football Limited and the accounts of the parent company registered in the Cayman Islands. However, things changed last season, with a huge difference in key figures in the two accounts. The starting point for Premier League PSR calculations is a club's pre-tax profit or loss. The club's maximum loss allowed in three years was £105 million, after deducting expenses from women's football, youth training, community work and other public welfare undertakings.
Manchester United's pre-tax loss reached a staggering £130.7 million in the 2023/24 season, heightening concerns about potential violations. However, Red Football Limited's loss was only £36.2 million, a £94.5 million less than its parent company.
This figure was confirmed by UEFA's latest report on "Finance and Investment of European Clubs" which shows that Manchester United's pre-tax loss in the 2023-24 season was 42 million euros (about £36 million), which is consistent with Red Football Limited's accounts.
This means that Manchester United has greater flexibility in complying with Premier League spending rules. Although the parent company's cumulative pre-tax losses reached £311.9 million in the past three seasons, Red Football Limited's losses were only £200.6 million, a difference of £111.3 million.
Any estimates of Manchester United's PSR status are just estimates, and industry insiders stressed that it may be difficult to determine which items are included or excluded in PSR calculations. The Premier League and UEFA use the concept of “report scope”, requiring clubs to include all “football activities” costs that may cover amounts under other legal entities. The difference between the accounts of
Red Football Limited and the parent company shows that despite five consecutive years of significant losses, United has not violated the top-flight spending rules.