Reports indicate that Sir Jim Ratcliffe is considering another reduction, as one of Manchester United’s lease agreements has been classified as excessively costly.
Ratcliffe finalized his acquisition of Manchester United at the beginning of 2024, securing a minority stake in the Premier League club for approximately £1.25 billion. Initially, he acquired a 28% stake, which he has since increased to about 29% through an additional investment of £79 million.
Although Ratcliffe is a co-owner of Manchester United, he assumed control over the football operations at Old Trafford following his initial agreement with the Glazer family.
This development was initially received with great enthusiasm; however, Ratcliffe has quickly become a controversial figure among Manchester United supporters due to his implementation of a stringent cost-cutting strategy aimed at generating funds.
Manchester United ranks second in the five-year Premier League net spend table, and Ratcliffe has found it necessary to reduce expenses after taking over a challenging situation.
While some of Ratcliffe’s cost-cutting measures have been essential, others have been perceived as excessively severe, including increased ticket prices, widespread layoffs, the elimination of Christmas bonuses and payments to club legends, as well as restricted lunch provisions for staff.
Currently, a report from The Guardian suggests that Manchester United may consider terminating the lease for their London offices in an effort to reduce expenses.
Ratcliffe is evaluating this option, as the existing lease in Kensington has been regarded as too large and financially burdensome.
The current lease in Kensington is set to last for ten years; however, INEOS has proposed an early termination of this agreement.
The report has also broken down the current ‘most likely course of action’.
‘United moved into the Kensington Building less than two years ago after the expiry of a 10-year rental agreement on another office building in Mayfair, but with Ratcliffe deciding that the vast majority of the club’s staff should be based in Manchester, the 23,000 sq ft space has been deemed to be too large and expensive.
‘In announcing a “transformation plan” last week that will involve between 150 and 200 redundancies, United committed to maintaining a presence in London, but the Guardian has learned this will involve looking for new premises.
‘While downsizing at their current office is also being considered, it is understood that moving out entirely two years into a 10-year agreement is viewed as the most likely course of action.
‘United’s offices in Kensington are located less than a mile from Ineos headquarters in Knightsbridge, but this convenience is unlikely to influence Ratcliffe’s thinking, which is based on making the club as financially efficient as possible.
‘Ratcliffe has often preferred to use his Ineos offices for United business since buying a 28% stake in the club 15 months ago, with Erik ten Hag’s fate as manager effectively sealed at a Knightsbridge summit in October involving the 72-year-old co-owner, the chief executive, Omar Berrada, the then sporting director, Dan Ashworth, and the technical director, Jason Wilcox.’