Skip to main content

Is the INEOS austerity policy at United justified or damaging?

To mark INEOS’ first anniversary of operating United, The Athletic has spoken to numerous sources within the club’s ecosystem, all of whom spoke confidentially to protect their jobs, to detail what measures have been taken at the club and with the men’s first team.

Among much more, The Athletic reveals:

  • A fear of further job cuts
  • Approvals to sign off anything costing £25,000 or more go above Berrada
  • Ratcliffe proposed X owner Elon Musk or Amazon’s executive chairman Jeff Bezos help pay for new stadium
  • Club looking at significant ticket price rises
  • Further ambassador cuts and high-profile exits, including former chief executive David Gill’s £1million-per-year retainer
  • More INEOS executives getting involved at United on a day-to-day basis

Ratcliffe resented the fact United are a loss-making enterprise, in the red for over £113n n the last financial year.  While the initial deal agreed Ratcliffe would assume sporting control of United, it quickly became clear he needed to get a grip of the business to address matters on the pitch. His scope therefore expanded.

United are one of the most profitable clubs in the world before player trading and interest payments on debt come into the equation — a legacy of Glazer ownership — but a key objective for Ratcliffe has been headcount reduction, down from around 1,000 to 750. Those large-scale redundancies have left morale, in the words of several employees, “on the floor”. Others at the club would counteract that view, insisting that people understand what Ratcliffe is trying to do and why. 

In that light, some staff at United are making contingency plans and looking at opportunities elsewhere. For instance, the commercial director at a different north-west football club is sitting on around a dozen applications from current United employees.

People who have worked with Ratcliffe consider staffing levels an obsession, with the 72-year-old applying to United the business strategies that have helped him become one of Britain’s richest men. Stripping back companies to increase efficiencies has been his blueprint but former colleagues feel the same approach might not work at United because they think football is different.

The start of December used to be the time the rank-and-file could look forward to the office Christmas party. But the hierarchy at United, led by Ratcliffe, put paid to that this time round.   Cutting the Christmas party caused widespread upset because it would have been a chance to mix with colleagues in a relaxed environment and have some fun at the end of a year when many had given up evenings and weekends to work. 

It is estimated United saved around £250,000 by cancelling the Christmas function, but those at the club say the call was made in light of so many people losing their jobs, and celebrating in those circumstances would have been wrong, rather than it being a financial calculation.

Staff being able to let their hair down when away, or wine and dine clients, was seen by the Glazers as a fair expense and the club’s sponsorship business was industry-leading, but Ratcliffe viewed it differently. He withdrew corporate credit cards and enforced much tighter spending, to the point where staff now have to plot train journeys using the split-ticket mechanism for lower-cost fares.

One particularly embarrassing moment came during pre-season when a meal out for staff and players ran into thousands of dollars and senior executives, due to new credit card limits, found their cards blocked initially when attempting to pay. They ended up splitting across multiple cards to cover the bill.

A clear point of conflict comes over what happens with Old Trafford. Ratcliffe appears determined to build a new stadium, when Joel had previously shown preference — although little momentum — to redevelop. How to finance a ground from scratch, at a cost upwards of £2billion, has not been sufficiently explained.

A fan commented: ‘For argument's sake, let us assume that Utd indeed were overstaffed and needed to make cuts. It also makes sense for the club to try and curtail executive and commercial spending, such as nights out in Vegas. While studies have consistently shown there is no real drop-off when companies allow sensible work-from-home policies, there's a traditional assumption that people have to work in an office to be at their best. I am not surprised to see Ratcliffe issue that call as well.

It does, however, get a little bemusing when the club is asked why there's no office Christmas party, and the stated reason was that 250 people had been let go and people wouldn't want to celebrate, when it was INEOs who created the conditions for both in the first place!’

My view is that there was some fat to be cut, but it has been pushed too far and is damaging the morale of key staff.

 

Comments

Popular posts from this blog

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion.  Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs.  An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...

Reports about Charlton sale exaggerated

Reports have appeared in The Guardian and elsewhere that Charlton has been put up for sale. Richard Cawley is an authoritative local journalist who runs a South London Sport substack site.  He reached out to the club yesterday evening to ask for comment on The Guardian’s article. Early indications from the club have been that nothing has changed since the story about them seeking investment, except that it is now a different company doing it. Charlton have since managed to consolidate their place in the Championship, avoiding an instant return to League One, with their women’s side promoted to the WSL, returning to the top flight for the first time since 2007, although staying there is likely to be costly. It would be counter-intuitive for owners Global Football Partners not to progress the club when looking for investment, that the focus remains on driving it forward, that their spend this summer is in line with long-term planning and will see an increase in wages spent on players...

Hull City's 'strange' loan

When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned.  He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long.  What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do