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Report: Man Utd confident of PSR compliance despite posting over £71m in losses during Q3

Manchester United are reportedly confident in their ability to adhere to PSR for the 2023-24 season, despite reporting a £71.4 million net loss for the third quarter.

Manchester United are reportedly confident in their ability to adhere to the Premier League's financial regulations for the 2023-24 season, despite reporting a £71.4 million net loss for the third quarter.

Profit and Sustainability Rules (PSR) have been a significant focus for all clubs in recent times, especially after it cost Everton and Nottingham Forest points last season.

Premier League clubs are permitted to accumulate financial losses of up to £105m over a three-year period.

This rule is set to remain in place for the 2024-25 campaign as well, with new financial rules only expected to be adopted from the 2025-26 season onward.

With the latest figures, the Red Devils' total loss over the previous three-year PSR cycle currently amounts to £271.4m, putting them in serious danger of a rule breach.

© Reuters

Man United at risk of sanction after significant financial losses

Despite the significant losses incurred by the Red Devils over the last three years, Sky Sports report that the club are still confident that they will comply with PSR for the assessment period in question.

The report adds that United sources view these costs as a necessary investment to establish ownership and management structures that they believe will enhance recruitment discipline in the future, while also ensuring the club maintains its commercial resilience.

The net loss figure incorporates £30.3m in exceptional costs linked to the sale of 27.7% of voting rights in the club to Sir Jim Ratcliffe, which includes consultancy fees owed to the American firm Raine.

The Red Devils' total operating expenses increased by 15% compared to the equivalent quarter last year, reaching £203.7m, including £91.2m in employee costs.

Amortisation costs related to the payment of transfer fees over players' contract periods amounted to £46.3m, marking an increase of £3.4m from the same quarter last year.

Revenue, meanwhile, declined by 20% compared to the same period last season, which the club attributed to playing nine fewer home matches, particularly after their early exit from the Champions League.

© Reuters

Red Devils remain confident of avoiding PSR breach

While the sale to Ratcliffe posted significant costs for United, the British billionaire has committed to investing £234m in developing club infrastructure with £156m already disbursed, including around £50m towards upgrading the club's Carrington training complex.

Borussia Dortmund covered the majority of Jadon Sancho's wages when they signed the winger on loan in January, in addition to paying a £2.95m loan fee.

Similarly, Donny van de Beek's loan to Eintracht Frankfurt also involved a loan fee and a significant portion of the midfielder's wages paid by the Bundesliga club. It is understood that the funds arising from Sancho and Van de Beek's loans are yet to be accounted for.

Deductions are still to be made from the total loss figure to account for spending on infrastructure, women's football, youth development, community efforts and COVID-19-related losses, while the club are believed to have confirmed plans for a redundancy program that could result in approximately 250 jobs being cut.

Erik ten Hag's side are also expected to make several player sales this summer, with Van de Beek already moved on, while the likes of Sancho, Mason Greenwood and Casemiro are among those who could depart, which would give the club's bottom line a further boost.

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