Manchester United could be hit with a £22.5million deduction if they fail to qualify for the Champions League this season.
United will compete in the Europa League this campaign after Ralf Rangnick’s side only managed to finish sixth in the Premier League in a disastrous 2021/22 season. Erik ten Hag has been hired to try and turn things around at Old Trafford, but the new era currently looks much like the old one, with consecutive defeats leaving them bottom of the table.
Ten Hag is already aware of just how damaging a lack of Champions League football can be, with many of his priority transfer targets unwilling to join a team who have not won any silverware for five years. And United’s finances could be hit if the Dutchman fails to turn things around and oversee a top-four finish this season.
Back in July 2014, United signed a lucrative contract with sportswear manufacturer Adidas, who agreed to pay £750m to make the club’s kit for the next 10 years. That £75m-a-season contract was a major improvement on the £23.5m a year Nike had been paying previously.
However, Adidas were canny enough to include some small print which helped them guard against United’s performance dipping on the pitch. United agreed to a clause which states that if they fail to qualify for the Champions League for two consecutive seasons then Adidas are allowed to reduce their yearly payment by 30 per cent.
Having missed out in 2021/22, they are now under threat of seeing that possibility become reality, with their £75m payment perhaps turning into £52.5m in 2023.
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As pointed out by football finance expert Kieran Maguire, United’s contract states: “Payments due in a particular year may increase if our men’s first team wins the Premier League, FA Cup, or Champions League, or decrease if our men’s first team fails to participate in the Champions League for two or more consecutive seasons, with the maximum possible increase being £4million per year and the maximum possible reduction being 30% of the applicable payment for the year in which the second or other consecutive season of non-participation falls. If the men’s first team fails to participate in the Champions League for two or more consecutive seasons, then the reduction is applied as from the year in which the second consecutive season of non-participation falls.”
United’s agreement with Adidas was hailed by sports marketing and business experts eight years ago. It was seen as a ground-breaking piece of negotiation which would help the club increase its commercial revenues dramatically – and while that has been the case, it could also now backfire on United during their hour of need.
