As it complains about ‘the deindustrialisation of Europe’, INEOS is undertaking a slowing down or outright cutting of investment in what had been flagship businesses. On Wednesday, the INEOS Group received a further blow when leading agencies Fitch Ratings and Moody’s downgraded their credit rating to “negative”, citing mounting debts of almost €12bn (£10bn), over five times larger than INEOS’ annual earnings.
INEOS’ recent business decisions have the appearance of
stripping back to protect the motherlode, but even United have not escaped the
cost-cutting. On Tuesday, The
Athletic reported that Ratcliffe was following up 250 job losses last
summer by making another 100 staff roles redundant over the upcoming
months.
This is just the latest in a string of what Ratcliffe has
termed “right-sizing” measures — such as removing club credit cards and
cutting Sir Alex Ferguson’s ambassadorial deal, as well as raising ticket
prices and eliminating concessions for children and pensioners on unsold
tickets.
According to the club’s financial results, these are part of
a “club-wide business transformation plan” to “improve operating efficiency via
cost-savings, headcount rationalisation and changes to the organisational
structure”.
In December, United’s chief executive, Omar Berrada,
told staff that 2024 had been “a difficult year and I can’t promise next year
won’t be difficult too”. Ratcliffe, for his part, told the United We Stand
fanzine in the same month that INEOS had to “make some difficult and unpopular
decisions. If you shy away from the difficult decisions, then nothing much is
going to change”.
But all of these seem to go against another of Ratcliffe’s
previous assertions to The Times in an interview in 2019. “It’s invest for success, invest wisely for
success,” he said of his sporting strategy before investing in United. “We
haven’t bought Nice to make money, that’s clear. If we want to make
money, we’ll do that in chemicals — not football.”
So what is the vision for United? If the deals with other
sporting investments are falling by the wayside to fund them, that is at least
a strategy, but recent actions point in the other direction. Is INEOS
refocusing, streamlining, or even beginning a managed withdrawal from sport?
There is an argument to be made for each.
Ratcliffe needs to answer why the Old Trafford cuts are
taking place despite INEOS’ overall profits — and justify that they are not
linked to the lingering debts which are worrying ratings agencies. If cuts at
Manchester United are part of a strategy to manage the financial health of the
overall group, that is a very different prospect to what was initially sold to
the club’s fans. When INEOS took over their stake, it was meant to be with
different ideals to the Glazers.
A request by The
Athleticto INEOS to discuss what recent business decisions meant for
Manchester United went unanswered, so they were left with what Ratcliffe has
stated before. But does Ratcliffe
represent the bright new dawn promised for United after the depredations of the
Glazers? Or is he making a bloated
structure more efficient?
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