Manchester United supporters met with a sobering end to 2024. No sooner had Newcastle United cantered to a simple 2-0 victory at Old Trafford on Monday night to deepen their festive gloom, Ruben Amorim was fronting up to the potential for even greater ignominy over the next 12 months.
“We have to acknowledge our position,” United’s head coach told a press conference. “I think people are tired of excuses in this club. Sometimes I talk about relegation. Because our club needs a shock.”
And what a jolt that would be.
United have been ever-presents in the top tier of English football since promotion from Division Two under Tommy Docherty in 1974-75, a year after he took them down, building up their trophy collection and wealth during a transformative leap into the modern era.
Relegation was supposed to be a concern solely for others but Amorim is allowing himself to find little comfort in the seven-point cushion that 14th-placed United hold over the Premier League’s bottom three at the season’s halfway mark.
United have stalled and, admittedly far away in the distance, is the still improbable prospect of worse. Just how would they, one of European football’s strongest financial powerhouses, cope with dropping down to the second-tier Championship? The Athletic considers the unimaginable…
What would relegation cost United in lost TV revenue?
This is the one revenue stream we could most accurately project should United lose their Premier League status. And it would undeniably sting.
United’s most recent accounts outlined that £222million was received in broadcast revenue during the 2023-24 season, a number that eclipses the total turnover of some other Premier League clubs. The bulk of that (72.9 per cent) came from the Premier League pot but a return to the Champions League also saw numbers enhanced through European football governing body UEFA’s distributions last term.
Much of that would obviously disappear in the event of relegation.
United would have to rely on the parachute payments awarded to clubs who fall from the Premier League and a first season in the Championship would see them pocket 55 per cent of the top flight’s equal TV rights split. That would fall to 45 per cent for the following campaign if they didn’t immediately go back up and 20 per cent the one after, should promotion back to the Premier League not be won in that time.
That scenario currently means a relegated club earn £43.6million in their first Championship season but there will be a marginal increase to that figure as the Premier League begins its next broadcasting cycle from 2025-26. Including the central distribution given to the 24 Championship clubs, it would be safe to assume United’s TV revenues might be as low as a quarter of those last published should the unthinkable happen over the next five months.
United would play more league games but receive far less TV money in the Championship if Amorim takes them down (Gareth Copley/Getty Images)
Their current struggles will not be helping this season’s budgeting, either. United are in danger of missing out on European football altogether for only the second time in 35 years and the continental stage has been a crucial income stream for them. United’s annual financial report detailed that £166.3million had been generated through broadcast and matchday revenue relating to European competitions in the past three years, working out as an average supplement of £55.4m per season.
The current standing of 14th would also see their Premier League prize money slashed if fortunes are not improved. Every place in the table is effectively worth £3.1million in merit payments through the current broadcast deal.
“It would be the same situation that happens to any club in terms of a revenue hit,” says Dr Dan Plumley, senior lecturer in sport business management at Sheffield Hallam University.
“The net difference between what a team finishing bottom of the Premier League gets in TV money and one in receipt of first year parachute money, you’d be looking at a £60million reduction in revenue.
“If the unthinkable were to happen, that figure wouldn’t hurt United too much on the revenue line because their revenues were pushing towards £700million. But it’s everything else that comes with playing in the league below. What it would do to the brand, which is hard to measure, the commercial contracts and the impact of those.”
What would relegation cost in commercial revenues?
United have long been a commercial behemoth in the modern era, bringing in north of £300million in each of the past two seasons. That amounted to 46 per cent of their annual turnover last term, underlying their dependence on a commercial strength that most other clubs can only dream of.
Relegation would not suddenly see commercial partners all jumping ship but United will inevitably struggle to replicate the deals they have typically attracted if they are a second-division side.
Adidas, for example, already has it written into its long-term deal that backing a Championship club would not have the same appeal. United’s accounts state their kit manufacturer, which has a contract running until 2035, “may reduce the applicable payments for a year by 50 per cent if the men’s first team is not participating in the English Premier League during that year”. Adidas also has the option of terminating the £90million a year deal at one full season’s notice if United are relegated.
It is industry standard for kit sponsors to reduce their financial commitments to a relegated club as exposure diminishes and United, as the Adidas deal underlines, could not hope to be insulated from awkward conversations with their string of major partners.
United’s three-year front-of-shirt deal with technology firm Snapdragon, a Qualcomm subsidiary, is worth $225million (£180m) and does not even have a clause for them failing to qualify for the Champions League let alone dropping out of the Premier League. However, their current arrangements for training kit sponsor and match shirt sleeve sponsor expire in 2025, so relegation this season would be awful timing for a club going to the market to seek new deals.
Drawing comparisons with other established clubs relegated in recent times is not particularly helpful given United’s enormous stature but they do illustrate reduced commercial powers in the Championship.
Aston Villa’s commercial income was more than cut in half, from £28million to £13m, when they went down at the end of 2015-16, and Newcastle United’s suffered similar damage after the same fate befell them that season.
What would it cost in matchday revenue?
This is the smallest of United’s three major revenue streams, but perhaps the one that would ride out the storm best in the Championship.
No club in England attract the number of fans United do, and there is little to suggest their current sell-out crowds in the region of 73,000 at Old Trafford would not be replicated outside of the Premier League. There would even be the prospect of four additional home games, with Championship clubs having 46 league fixtures per season to the 38 of top-flight sides.
The pricing structure of matchday tickets and hospitality packages in the Championship would be the greatest influence on matchday revenues. United fans have already pushed back against members’ tickets going up to £66 and the removal of concession prices, with new co-owner Sir Jim Ratcliffe telling the United We Stand fanzine that it made no sense for United home-game tickets to cost less than those at fellow Premier League side Fulham.
Manchester United fans leave during Monday’s 2-0 home defeat by Newcastle (Stu Forster/Getty Images)
That has brought concerns about more rises next season, and relegation would not necessarily mean markedly reduced matchday revenues. Newcastle, relegated from the Premier League a year earlier, barely saw a minor downturn in the amount of money coming through the turnstiles at St James’ Park as they won the 2016-17 Championship title.
United’s matchday revenues of £136million, in theory, would hold relatively firm if supporters continued to pack out what is still English club football’s biggest stadium.
How would relegation affect United’s PSR position?
United have sailed close to the wind with the Premier League’s profitability and sustainability rules (PSR) recently, with the heavy losses incurred in 2021-22 and 2023-24 having consequences. There is confidence inside the club that United have stayed within the allowable loss-making limit of £105million over a rolling three-year period for a Premier League club, but dropping to the Championship would see them introduced to a new set of rules.
United would effectively be allowed to lose £83million if they were a Championship club in 2025-26, with two seasons assessed under the Premier League’s limits and one under those of the EFL, the body that runs the next three divisions of the English game. That would bring obvious challenges as revenues contract and, as happens at so many clubs who get relegated to the Championship, would require player sales to help with compliance.
Forecasting United’s precise PSR position in the event of them going down, though, would be difficult beyond an acceptance of the inevitable challenges.
“You’re getting into unknown territory,” adds Dr Plumley. “We know the losses have been high for United and perhaps close to the limit, but we’ve got no benchmark or parallels to draw from, because we’re talking about a club where relegation would be unimaginable.”
Would about relegation clauses in player or coach contracts?
It is common for a player’s contract to be incentivised via their performance and for many Premier League teams it is considered prudent to add a relegation clause to these deals, too. Salaries fall by between 30 and 50 per cent if sides go down, safeguarding clubs at a time when revenues are shrinking.
United’s annual wage bill at the last count was £365million — £1m a day — and the clauses in player contracts that have carried greatest significance in recent times have been to do with whether or not United qualify for the Champions League. There has been no mention of relegation clauses in United’s accounts, because they do not include them in player contracts.
Bruno Fernandes and United’s other high earners do not have relegation clauses in their contracts (Darren Staples/AFP via Getty Images)
Of the current squad, the players on deals due to expire at the end of this season are Christian Eriksen, Victor Lindelof, Jonny Evans, Tom Heaton, Harry Maguire and Amad; the latter two are in negotiations and have contracts which include a one-year extension the club can trigger.
Would it affect the plan to rebuild or develop Old Trafford?
That would be a big unknown. Ratcliffe has made no secret of his plans to build a “Wembley of the North” — a new home for United that could house as many as 100,000 supporters if all was to be approved.
Either a new stadium close to the current Old Trafford site or a redevelopment of the existing ground would transform United’s matchday revenues but a project of that scale will carry huge costs — a conservative estimate would be in the region of £2billion being needed. United have spent months garnering support for the wider regeneration of the surrounding Trafford Wharfside area.
Would any of that be possible if they were a Championship club? Perhaps yes, given that United will remain one of English football’s biggest, best-supported clubs even if they tumbled down to the second tier. But funding needs would require Premier League money and a whole lot more.
Additional reporting: Mark Critchley
(Top photo: Carl Recine/Getty Images)
