INEOS’ First Year at Manchester United: Progress or Pain?

KEY POINTS

• Ruthless Cost-Cutting: INEOS, under Sir Jim Ratcliffe, implemented aggressive cost-saving measures at Manchester United, including staff layoffs, budget cuts, and scaled-back perks, causing significant internal friction.

• Leadership Turmoil: High-profile appointments, such as Erik ten Hag and Dan Ashworth, were abruptly reversed, reflecting a no-nonsense approach to management but raising questions about stability and long-term vision.

• Ambitious Revival Plans: INEOS outlined a bold strategy to restore Manchester United’s former glory with initiatives like "Project 150" and plans for a 100,000-seat stadium, though financing and fan relations remain critical challenges.

👉 Bonus: Below you will find five ChatGPT prompts that you can use to develop your expertise in this area.

It has been a transformative year for Manchester United under Sir Jim Ratcliffe’s INEOS, marking the petrochemical giant's entry into the Premier League’s upper echelons. In December 2023, Ratcliffe acquired a minority stake in the club, taking over its sporting operations. His first year at Old Trafford has been defined by significant cost-cutting, high-profile personnel changes, and ambitious—if contentious—efforts to steer the Red Devils back to glory.

Bold Beginnings Amid Financial Strains

Ratcliffe’s acquisition came with high expectations. His stated goals included restoring Manchester United to the pinnacle of the Premier League and the Champions League. However, the year that followed highlighted the financial pressures underpinning the club. Manchester United reported losses of £113.2 million in the fiscal year ending June 30, a problem exacerbated by debt inherited from the Glazer family’s ownership. For Ratcliffe, addressing this issue became priority number one.

This focus on finances triggered sweeping changes, including a controversial headcount reduction. Under INEOS, Manchester United’s staff shrank from 1,000 to 750. These layoffs, part of a broader strategy to control costs, left morale at Old Trafford low, with many employees fearing further cuts. Despite these measures, insiders noted that Ratcliffe’s determination to reshape the club resonated with some staff, who appreciated his direct and strategic approach.

A Year of Hiring and Firing

Ratcliffe’s tenure began with ambitious appointments, but rapid reversals undermined stability. Erik ten Hag’s contract extension in July 2024, followed by his dismissal in October, cost the club £10.4 million in severance fees. Similarly, sporting director Dan Ashworth, hired with great fanfare, was dismissed after just five months, leaving Manchester United with another £5 million expense.

These high-profile exits reflect Ratcliffe’s impatience for results and his readiness to act decisively. While some see this as an effective strategy to overhaul a stagnant club, others view it as disruptive, particularly when it leaves critical roles vacant for extended periods.

Frugality in Practice: From Christmas Parties to Credit Cards

Perhaps the most visible element of INEOS’ stewardship has been its approach to cost control, even in areas symbolic of the club’s culture. Traditional perks such as Christmas parties, previously lavish affairs, were canceled under Ratcliffe’s regime. Even modest staff benefits—such as complimentary FA Cup final tickets—were scaled back. This frugality extended to corporate expenses, with new policies enforcing economy-class travel, split-ticket train journeys, and tighter control over credit card spending.

Ratcliffe’s fiscal discipline, while pragmatic, sparked backlash within the club. Cancelling festivities like the Christmas party upset staff who had sacrificed personal time for the team’s success. More significantly, some questioned whether such stringent measures could alienate employees and undermine morale over the long term.

Navigating Fan Backlash and Heritage Challenges

Ratcliffe’s tenure has also been marked by friction with fans. Protests erupted after ticket prices were raised, particularly for matches where concessions for under-16s and over-65s were eliminated. This decision, affecting even a small percentage of seats, was emblematic of the disconnect felt by many supporters under INEOS’ management. Similarly, the decision to curtail Sir Alex Ferguson’s ambassadorial role—a £2 million-per-year arrangement—sparked controversy, given the former manager’s iconic status at Old Trafford.

The tension extended to United’s broader heritage. Ratcliffe’s pragmatic approach saw cuts to the former players’ association budget, a move that, while cost-effective, stirred concerns about severing ties with the club’s storied past.

Plans for Revival: "Project 150"

Despite the challenges, INEOS has signaled its long-term commitment to Manchester United’s revival. At the heart of this vision is “Project 150,” an ambitious goal to win the Premier League in 2028, coinciding with the club’s 150th anniversary. Achieving this will require significant investment in infrastructure, including a proposed new 100,000-seat stadium to replace Old Trafford, whose aging facilities have long been a point of contention.

Funding remains the project’s largest hurdle. Ratcliffe has explored unconventional avenues, reportedly discussing partnerships with high-profile figures such as Elon Musk and Jeff Bezos. However, it appears likely that ticket price hikes and sponsorship deals will bear much of the financial burden, a prospect that has already drawn criticism from fans.

5 PROMPTS THAT ATHLETES CAN USE TO DEVELOP AND BUILD EXPERTISE

• What are the critical financial metrics and due diligence steps I should analyze before investing in a professional sports team or league, and how can I assess their long-term profitability?

• Explain how cost-cutting strategies, like those implemented by INEOS at Manchester United, can impact the operational efficiency, morale, and valuation of a sports franchise.

• What are effective ways for athlete-investors to balance tradition and culture with modern business practices when managing or owning a sports team?

• Provide a roadmap for athlete-entrepreneurs on leveraging their personal brand to secure partnerships, sponsorships, or funding for investing in sports organizations or infrastructure projects.

• How can athletes diversify their sports-related investments to include emerging opportunities, such as eSports leagues, media rights, or innovative fan engagement platforms, while managing risks effectively?

👉 Check ChampionsChat GPT for your prompts.

A New Management Ethos: Balancing Tradition and Innovation

INEOS’ influence is increasingly evident in Manchester United’s day-to-day operations. Ratcliffe’s management style, drawn from his success in industry, prioritizes efficiency and a no-nonsense approach to decision-making. Executives from INEOS’ broader portfolio, including its sports division, have taken on prominent roles at Old Trafford, underscoring this shift in leadership culture.

While some within the club acknowledge the benefits of this methodical style, others worry it fails to account for the emotional and human-centered aspects of running a football institution. Balancing business efficiency with the unique cultural and sporting dynamics of Manchester United will likely remain one of Ratcliffe’s key challenges.

Looking Ahead: Can INEOS Deliver?

Twelve months into INEOS’ tenure, Manchester United finds itself at a crossroads. Ratcliffe has demonstrated a willingness to make tough decisions, often at the expense of tradition and sentiment. Yet his determination to reestablish the club as a competitive force cannot be doubted.

The coming year will test whether this bold approach can translate into tangible progress, both on and off the pitch. With "Project 150" as its North Star, INEOS’ Manchester United project has laid a foundation of financial discipline and ambition. However, the journey ahead promises to be anything but smooth, as the club seeks to reconcile its rich heritage with a pragmatic—and sometimes ruthless—vision for the future.

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Enjoy the last weekend of 2024. 2025 will be great. For sure. Okay, hopefully...

Peace,

Irg

Irg’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. This work may feature assets and entities in which the author has invested.

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