Manchester United would reportedly face a fresh challenge in meeting the Premier League’s financial rules should the club miss out on qualification to the Champions League again.
Erik ten Hag’s side have endured a difficult start to the Premier League season, with the Dutchman under mounting pressure following a 3-0 home defeat to Tottenham.
The Red Devils are 13th in the table after six matches, with a six point gap already established to fourth placed Aston Villa.
According to The Times, Man United would face the challenge of meeting the Premier League’s Profit and Sustainability Rules if their miss out on Europe’s elite competition.
Man United would suffer financial penalties from sponsors should they miss out on the competition for two seasons in a row – which would be a first in the Premier League era.
Man United reportedly face a challenge meeting PSR rules without the Champions League
Erik ten Hag’s side are already six points off the top four following a difficult start to the season
Man United are playing in the Europa League this season following their FA Cup win, after finishing eighth in the Premier League.
The club’s annual report states that under their sponsorship agreement with adidas, a deduction of 30 per cent would be made to their annual payment in the event the club failed to qualify in consecutive seasons.
The deal has been amended as part of an extended £900million deal with the sportswear giant, reached last year, which sees them remain as the official kit supplier until 2035.
Under the revised terms, there would be a £10million deduction applied for each year of non-participation in the Champions League.
The penalty comes into force from the 2025-26 season.
‘Failure to qualify for the Champions League would result in a material reduction in revenue for each season in which our men’s first team did not participate,’ the annual report read.
‘To help mitigate this impact the majority of playing contracts for our men’s first team include step-ups in remuneration which are contingent on participation in the group stage of the Champions League.
‘Because of the prestige associated with participating in the European competitions, particularly the Champions League, failure to qualify for any European competition could negatively affect our ability to attract and retain talented players and coaching staff, as well as supporters, sponsors and other commercial partners.’
The annual report also highlighted the drop in revenue caused by missing out on Champions League qualification.
Man United made £53.8m despite Champions League group stage elimination last season
Man United’s combined broadcasting and match day revenue totalled £75million for the 2021-22 season when they reached the Champions League last-16, while it was £53.8m last season when they were eliminated in the group stage.
By contrast, the figure dropped to £37.5million when the Red Devils played in the Europa League in the 2022-23 season, where they were beaten in the quarter-finals.
It was revealed last month that Man United had escaped breaching the Premier League’s PSR rules despite reporting a loss of £113.3million last season.
Top-flight clubs are allowed to lose up to 105m over a three-year period under Profit and Sustainability Rules. But United’s latest figures took them well above that mark with a total in excess of £250m.
The club have managed to avoid a charge and even confirmed that they are ‘in compliance with’ both the Premier League’s and UEFA’s financial rulings.
Man United were permitted to make a £40m Covid claim, which first came to light last year. The Red Devils’ huge claim was reportedly double all the other 19 Premier League clubs combined.
It appears that some sponsors failed to meet payments during the pandemic, while the cancellation of their summer tour also meant United also missed out on a big chunk of revenue during the off season.