Financial predicament facing Manchester United with Ruben Amorim, valued at £20m, as the club potentially faces a £160m expense at Old Trafford
Manchester United's current manager, Ruben Amorim, finds himself under scrutiny after a string of disappointing results this season. If a change were to occur, two potential candidates from the second tier could be Oliver Glasner, currently at Crystal Palace, and former English national coach Gareth Southgate. Both names have been mentioned more broadly, rather than strictly as second-tier managers.
The sacking of Amorim and the subsequent hiring of a new manager could potentially provide a better prospect of correcting the course. However, such a move would come with costs. The cost of replacing Amorim could be up to £20 million, a figure that pales in comparison to the potential loss of revenue due to the team's current position outside the UEFA Champions League.
For the 2025-2027 period, Manchester United could realistically lose out on £160 million of guaranteed Champions League revenue. This loss of revenue greatly exceeds the cost of making a change in the dugout. It's important to note that this loss includes broadcast, commercial, and matchday revenue.
On the other hand, involvement in the Europa League guarantees a team £20 million, primarily in broadcast payments. This could be a potential source of revenue if United manage to secure a place in the competition.
Amorim's contract with Manchester United runs until the summer of 2027, and his reported annual salary of £6.5 million adds to the financial considerations. The sacking of Amorim would likely require compensation payments for his backroom staff as well.
The sunk cost fallacy, an economic phenomenon where a person or organization is reluctant to abandon a strategy because they have invested heavily in it, even though it appears abandonment would be more beneficial in the long-run, could potentially come into play in this situation. If Manchester United do not deliver European football for a second successive season under Amorim, the decision to retain him could be seen as an example of this fallacy.
Manchester United have won once in five outings this season, losing to Arsenal and Manchester City, and being eliminated from the League Cup by Grimsby Town. Graham Potter of West Ham United is the only Premier League boss seemingly at greater risk of losing his job, according to bookmakers.
In the grand scheme of things, the cost of making a change in the dugout seems a small price to pay for the potential financial benefits of securing a place in European competition. The value of Champions League revenue lost for each season Manchester United spends outside the UEFA Conference, Europa, and Champions Leagues is in tens of millions of pounds. The value of Europa League revenue is primarily in broadcast payments, and securing a place in this competition could help offset some of the financial losses.
As the season progresses, the decision regarding Amorim's future at Manchester United will undoubtedly be a crucial one, with both financial and sporting implications.
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