Choppy waters for Ineos and United

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?

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful. Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy). However, Everton fans have had plenty to moan about on and off the pitch. Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...

The Political Economy of Football V2

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