Manchester United is grappling with a critical challenge in adhering to the Premier League's financial regulations, particularly if they fail to qualify for the Champions League for a second consecutive season.

The financial repercussions of missing Champions League qualification include penalties from sponsors, which could significantly impact the club's finances.

Specifically, failing to qualify could activate a £10 million penalty clause in United's lucrative £900 million sponsorship deal with Adidas, effective for the 2025-26 season.

This deal with Adidas, which extends until 2035, stipulates a £10 million deduction for each year the club does not participate in the Champions League.

The club's revenue has already taken a hit, plummeting from £75 million in the 2021-22 season, when they reached the Champions League last-16, to £53.8 million the following season after being eliminated in the group stage.

Last season, United's participation in the Europa League saw their revenue further decline to £37.5 million after a quarter-final exit.

Despite reporting a £113.3 million loss last season, Manchester United has managed to comply with both Premier League and UEFA financial regulations, although their total losses have exceeded £250 million over three years.

The club faces new challenges under the Profit and Sustainability Rules if they miss out on the Champions League again, complicating their financial landscape.

A slow start to the current season has raised concerns about Manchester United's ability to attract top players and sponsors if they continue to underperform.

Currently sitting 13th in the Premier League, United is six points behind the top four, risking their first back-to-back absence from the Champions League in the Premier League era.

Their next match against FC Porto in the Europa League is crucial, as manager Erik ten Hag faces mounting pressure to secure positive results.

The club's annual report highlights that failing to qualify for the Champions League would not only reduce revenue but also hinder their capacity to attract and retain talent, sponsors, and supporters.