The two sides meet in the Europa League on Thursday.
Both sides have endured indifferent campaigns once again this season, with Liverpool seventh in the table and United sixth in the Premier League.
Europe’s second tier competition has taken on added significance, with it representing a serious chance of silverware for both teams this season.
Indeed, it is the Anfield outlets last chance of a cup and McManaman makes them favourites against their old rivals.
“I think Liverpool will be favourites. They’ll be happy they don’t have to travel,” he told the Daily Star.
“With all due respect to United if they’re without Wayne Rooney and they have to put the kind of team out they’ve been putting out recently Liverpool would love to play that type of team.”
“But they’ll have to improve if they want to win it. If Liverpool are going to win the Europa League they have to play a whole lot better than they have done.”
What will be interesting to see is how Jurgen Klopp and Louis Van Gaal decide to approach the game given their positions in the league.
Both have had disappointing years but are only three and six points outside of the top four respectively, and may be eyeing a late push for Champions League football.
In that sense, the Europa League could be a distraction at this late stage of the campaign for either side and both managers may sacrifice it to focus on fourth spot.
With a Champions League place on offer for the winners that would be a poor move though, with the Europa League more than winnable for both sides.