A look at the impact of the new 2022 Financial Fair Play Rules on Man Utd

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NFM

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Tottenham Hotspurs FC -- the winner?
Think I spoke too soon naming Liverpool FC the winner of the FSR competition, Totteneham is in great shape.

So Tottenham is a club that makes yearly losses, and have for some time. They have not been a big spender on the transfer market. How can they be in great shape? Tottenham's finance situation is heavily impacted by their new stadium. Tottenham's yearly cost for its stadium is 40m (interest) and 70m (depreciation) = app. 110m. Since any costs associated with the improvement of the stadium is excluded from the Football Earnings Rule, it of course has a big impact on turning Tottenham's financial loss into a profit in relation to the FER.

The following is under the assumption that Tottenham miss the CL next season. But since this exercise is intended to provide information on how much a team can spend in the Summer of 2023, its of less importance. Tottenham's spending is limited by Levy, not UEFA. QSI pushing in a bunch of money into Tottentham -- could however change the club's situation drastically.

This supports my view that signing up to tear down and redevelop OT would be the game to play. It would transform the numbers.
 

miked99

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Spending the night with my kid at the hospital and we got some good news about his treatment earlier today so I am feeling really energetic, and there is not much else to do with this view.... :)
Delighted to hear this, hope whatever the issue is that it's soon resolved! :)

Great thread, by the way. Thanks for your hard work.
 

Messier1994

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In light of the standings we have right now -- i.e. with Arsenal, City, Newcastle and us finishing top 4 -- this is how the top 6 summarize with my forecasts:


Note that only we and City have published our 21/22 AR. With the other clubs, I have looked at Off the Balls forecasts for 21/22, and made my own forecast for 22/23 and 23/24 based on their forecast. However, the bottom line for me that I feel quite comfortable with from a margin of error perspective:
* Liverpool and Arsenal can spend as long as they finish top 4 long term. Since you perhaps cannot count on that every year with the way the PL looks right now -- although, remember, next year 5 PL teams will qualify for the new CL -- they have to be fairly careful. Non of them could go on a Chelsea type of spending spree.
*Tottenham can spend a ton -- but they don't have the money. They make a big loss every year, but since so much of it is attributable to the stadium, they don't have the cash flow to sign players. If they get outside investment -- they could easily improve a great deal.
*Both we and City must sell to buy. City have a built in cushion from the Jesus, Zinchenko and Sterling sales, but if they didn't sell anyone last summer they are in a worse state than us.
*Chelsea, yeah, forget about them continuing the spending spree if they finish outside the CL (although, not being evaluated by UEFA if they finish outside of Europe altogether might actually buy them another transfer window).
*If we don't finish top 4 this year, we have very little room to accomplish anything next summer even if we sell quite many players.

@miked99 Thanks! He got bone cancer in 2020 and was declared healthy in 2021, but then in the fall of 22' the crap came back and had spread pretty much, but treatment and everything is going really well and it looks that he could be declared healthy again this spring. Then of course its all about it not coming back again in the coming years. But right now I am pretty ecstatic because it looked kind of grim there for a while. He is a big Man Utd fan (he is 14 y/o), so we have had a pretty fun time following the team 24/7 when I am there (me and the wife take every other day).
 
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StiffTackle

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Great stuff @Messier1994 - really appreciate the effort!

Do you have any insight into the definition of a youth player? I took a look and couldnt find anything other than the suggestion that youth teams were for players aged 10-21.

The reason I ask (I may well be misinformed) is that if transfer fees for youth players are counted as investments rather than expenses and youth players are considered anyone below 22. - would that not significantly change the look of Chelseas spend?
 

Messier1994

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Great stuff @Messier1994 - really appreciate the effort!

Do you have any insight into the definition of a youth player? I took a look and couldnt find anything other than the suggestion that youth teams were for players aged 10-21.

The reason I ask (I may well be misinformed) is that if transfer fees for youth players are counted as investments rather than expenses and youth players are considered anyone below 22. - would that not significantly change the look of Chelseas spend?
Great question. This is a question I raised before, but I actually just saw that I had made a mistake interpreting the text. I don't know why they write the rules like this, but i-iX are items that are to be excluded, the youth player's salary included -- but from x and forward its not to be excluded, i.e. the transfer fee for the youth player "are not considered" as an expense that can be excluded.
 
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cyril C

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People are catching up:
https://www.telegraph.co.uk/footbal...-must-sell-to-buy-summer-even-get-new-owners/
Manchester United must sell to buy in the summer – even under new owners
...[
The] Telegraph Sport understands a change of ownership will make little difference to Ten Hag’s summer transfer kitty if revenues are not significantly boosted by the return of Champions League football – which looks more important than ever – and player sales. He may have to choose between a pedigree striker or midfielder given the impact of Uefa’s new Financial Sustainability rules ...

Ducker has obviously been told by the impact from people at the club, and in general makes the correct assumptions, but he attributes it a bit incorrectly (the deferred transfer payments and the Squad Cost Rule doesn't pose the biggest challenges for us, as covered above).

However Ducker's assumptions and what he has been told by his sources at the club basically confirms our conclusions above, i.e. the spending we could do when a new owner comes in, will certainly be restricted by the new FFP regulation. The question is only how much.

I am looking into Chelsea as we speak and will soon publish a new complete update for Manchester United. What is interesting is that Chelsea actually saves a fair amount by singing players to 7 year deals right now. Initially -- its only a short term gain, it cost you more later -- the amortization cost for giving a 100m signing a 5 year deal instead of a 7 year deal is 40% higher. So they save amortization costs by 29% short term by using 7 year deals. Naturally, they also has big earnings from their sale of players.
5 years or 7 years deal is only a accounting trick, at the end of the day you still pay the exact amount. Spreading out the payment over N years help on cashflow but I doubt any selling club will accept payment over 7 years. A small % on bonus payment perhaps (e.g. score 40 goals over 5 years, Vs scoring 40 goals over 7 years, might make a difference).

But then, imagine we have Sanchez and CR on our book of 7 years each...

How about Sancho then?
 

Lebo

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My laymen analysis of this is that teams aren’t going to spend north of 50m on unproven players going forward. Madrid and Barca must be happy with this. Anyway the biggest problem with spending has always been the oil clubs.
 

red thru&thru

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Many thanks guys! Tottenham and Manchester City is coming up!

Spending the night with my kid at the hospital and we got some good news about his treatment earlier today so I am feeling really energetic, and there is not much else to do with this view...
Fantastic news!
 

Son

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If we get taken over by a Middle East country I wonder if they’ll allow us to make up fake sponsorships like City and PSG?

That would take care of the FFP worries quite nicely :lol: Pretty sure the “accounting” at City is half written in invisible ink too.

No doubt they have an emergency rainy day fund for UEFA board members just in case they decide to look into it more closely again.
 

dinostar77

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If we get taken over by a Middle East country I wonder if they’ll allow us to make up fake sponsorships like City and PSG?

That would take care of the FFP worries quite nicely :lol: Pretty sure the “accounting” at City is half written in invisible ink too.

No doubt they have an emergency rainy day fund for UEFA board members just in case they decide to look into it more closely again.
Lets hope so. Then if UEFA threaten to take us to court we will turn up with 20 lawyers in tow and tie up UEFA with years of super expensive litigation ala Man City.
 

Messier1994

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5 years or 7 years deal is only a accounting trick, at the end of the day you still pay the exact amount. Spreading out the payment over N years help on cashflow but I doubt any selling club will accept payment over 7 years. A small % on bonus payment perhaps (e.g. score 40 goals over 5 years, Vs scoring 40 goals over 7 years, might make a difference).

But then, imagine we have Sanchez and CR on our book of 7 years each...

How about Sancho then?
100%. I made an analogy to what we saw in US pro league when they introduced "salary caps", and teams started sign players to their mid 40s to smear out their "cap hit". It can help you short term, but will always cost you down the road.

My laymen analysis of this is that teams aren’t going to spend north of 50m on unproven players going forward. Madrid and Barca must be happy with this. Anyway the biggest problem with spending has always been the oil clubs.
I think this is a really interesting topic. The football transfer market is a market like any other. And the prices of the traded commodity will go up and down like on every other market, based on supply and demand. What will impact supply and demand on the football transfer-market the coming 2-3 years? I think two things stick out:
(1) Clubs were given leeway to operate under the FFP when Covid hit. Strange? Of course not. Did football clubs "use" this to cover other losses? Absolutely. They blamed losses on Covid that weren't Covid related. Hence they could spend more on the transfermarket than they should have been able to spend, i.e. demand was inflated. This created an unbalance, and when this unbalance gets evened out -- demand will drop.
(2) The new Financial Sustainability Rules are entering into force starting in the summer 2022 and will be applied gradually into they are in full force in two years. They aims to ensure that clubs don't live above their means. This will limit demand.
(3) Certain mechanism -- were fans have demanded success and incompetent management have gotten control of clubs and spent without caution -- have created grave imbalances in especially Italy and Spain. The shape Inter, Juventus and Barca are in is just very ugly. These clubs and many others just cannot continue. This will limit demand.

Like if we were discussing the market for "steel", this is like concluding that the market in China and the US are in a deep recession. The result would be that the price of steel would drop significantly.

Is there anything to counter balance this? (a) Well football is in a great shape. The economy as a whole is tanking -- but football is contra cyclic since people with less money cancel the vacation, don't buy a new car, don't improve the house, and watch more football, and (b) there are still entering new rich investors buying clubs and pumping in money to the game.

But overall, it definitely seem like there will be less demand and higher supply (from teams like Juventus looking to cut costs). What type of results will that get? Well a team that doesn't want to sell a player, will of course not drop the price tag on the player (like Kane). The most sought after players (like Bellingham) might not be impacted. But exactly like you say -- who will pay 40-50m for the 3rd/4th rate targets? And so forth.

How the funk are Chelsea gonna get away with spending half a fecking billion & getting no CL?
I can be wrong, but I would comfortably assume that they won't. I think they (at best) will be in the same position as Juventus was this last summer, where they sold for 108m and bought for 106m (while letting Dybala, Bernardischi, Douglas Costa, Ramsey and Chellini go on free transfer and only picking up Pogba and Di Maria on free). And that they will face these type of conditions for a period of 2-3 years. No more spending sprees. I could perhaps see them still getting like one of the big names in the summer -- i.e. of Oshimen, Gvardiol and Enzo Fernandez -- but that is at most.

Lets hope so. Then if UEFA threaten to take us to court we will turn up with 20 lawyers in tow and tie up UEFA with years of super expensive litigation ala Man City.
I don't really have an opinion on Ratcliffe one way or the other -- but he seems to have an inclination to be extremely creative with these type of regulations. Especially in relation to tax. I do think that is good. You will get no brownie points for being best in class vis a vis UEFA:
 

Messier1994

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For anyone preferring reading this stuff on twitter, please see:

Any following and retweet is appreciated! :)
 

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100%. I made an analogy to what we saw in US pro league when they introduced "salary caps", and teams started sign players to their mid 40s to smear out their "cap hit". It can help you short term, but will always cost you down the road.

I think this is a really interesting topic. The football transfer market is a market like any other. And the prices of the traded commodity will go up and down like on every other market, based on supply and demand. What will impact supply and demand on the football transfer-market the coming 2-3 years? I think two things stick out:
(1) Clubs were given leeway to operate under the FFP when Covid hit. Strange? Of course not. Did football clubs "use" this to cover other losses? Absolutely. They blamed losses on Covid that weren't Covid related. Hence they could spend more on the transfermarket than they should have been able to spend, i.e. demand was inflated. This created an unbalance, and when this unbalance gets evened out -- demand will drop.
(2) The new Financial Sustainability Rules are entering into force starting in the summer 2022 and will be applied gradually into they are in full force in two years. They aims to ensure that clubs don't live above their means. This will limit demand.
(3) Certain mechanism -- were fans have demanded success and incompetent management have gotten control of clubs and spent without caution -- have created grave imbalances in especially Italy and Spain. The shape Inter, Juventus and Barca are in is just very ugly. These clubs and many others just cannot continue. This will limit demand.

Like if we were discussing the market for "steel", this is like concluding that the market in China and the US are in a deep recession. The result would be that the price of steel would drop significantly.

Is there anything to counter balance this? (a) Well football is in a great shape. The economy as a whole is tanking -- but football is contra cyclic since people with less money cancel the vacation, don't buy a new car, don't improve the house, and watch more football, and (b) there are still entering new rich investors buying clubs and pumping in money to the game.

But overall, it definitely seem like there will be less demand and higher supply (from teams like Juventus looking to cut costs). What type of results will that get? Well a team that doesn't want to sell a player, will of course not drop the price tag on the player (like Kane). The most sought after players (like Bellingham) might not be impacted. But exactly like you say -- who will pay 40-50m for the 3rd/4th rate targets? And so forth.

I can be wrong, but I would comfortably assume that they won't. I think they (at best) will be in the same position as Juventus was this last summer, where they sold for 108m and bought for 106m (while letting Dybala, Bernardischi, Douglas Costa, Ramsey and Chellini go on free transfer and only picking up Pogba and Di Maria on free). And that they will face these type of conditions for a period of 2-3 years. No more spending sprees. I could perhaps see them still getting like one of the big names in the summer -- i.e. of Oshimen, Gvardiol and Enzo Fernandez -- but that is at most.

I don't really have an opinion on Ratcliffe one way or the other -- but he seems to have an inclination to be extremely creative with these type of regulations. Especially in relation to tax. I do think that is good. You will get no brownie points for being best in class vis a vis UEFA:
Love your posts, thank you. A couple of things come to mind, happy for them to be shot down.

Firstly I'm not sure about demand for players dropping, come summer we could be looking at Newcastle going into full spending mode, plus both United and Liverpool with new high-spending owners. Might not happen, but if it did there would be huge amounts cascading down the system, I couldn't see player prices dropping in that scenario.

Secondly, thinking about FFP, weren't Juventus and the like prime movers in wanting FFP in the first place, to defend their status against 'new-money' clubs? If it's affecting them badly will they still want FFP? We know in the above scenario Newcastle, Liverpool and United wouldn't, and others, and money talks in the football associations, so is there not a chance FFP would be allowed to fail?
 

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The Swedish rumble assumes no new information or strategies would be possible. I hate always having to play Ian Malcolm from Jurassic Park on here … but money will find a way.

The idea of trying to micro manage little details like contract lengths and thinking that will make a massive change is …well, arguably not legally enforceable, but also short-sighted and stupid.

Teams will just reclassify how revenue and incomes are structured.

The real issue is that NONE of you want an actual even playing field. You never did. You just wanted a playing field that continued to favor the same teams.

Even playing fields are rough. My (American) football team is going to have take a right tackle in the draft and let a very good player go for nothing just because they can’t afford what his contract value should be in their cap structure. Half your roster can change nearly every year, and sometimes getting a good team is just luck. I personally don’t think that’s better.

But this big announcement on ending the contracts longer than 5 years and “stopping Chelsea” is just a mirage to mollify angry fanbases. And they will soon be just as angry at United when you have owners with actual wealth once again.

But the thing is: they need that money. The trickle down of massive expenditures of PL teams are keeping some of these teams and leagues afloat. Teams can’t field 40 odd players, so there is only so much advantage a team can get, even with greater resources. An Ajax, on its day, can still win its league and upset teams on a run to a CL final.

The only difference is whether you want that result with extra billions going out to the teams that need the money, OR the exact same result without those teams getting the money.

This is about ensuring “specific” teams stay in the upper echelon. The Real Madrid and Barcelonas of the world , otherwise there is literally no point.

Didn’t Madrid get sold “training ground” land at deflated values, then sell it or lease it back to the state for massive gains awhile back? I don’t want to hear a peep from them.

Barca encouraging public threats and pressure on players to get them to void their rightful contracts? That’s ok, but two extra years on a players contract is the great evil?

Please.

The fact is, due to the structure of their sale, the specific way in which their debt was forgiven, the allowances on the ending 3 yr avg plan due to Covid, investment offsets like women’s football (where Chelsea were huge), a massive gap in generated money from academy players, sales and loans over time, and additional allowances for hardship status we qualified for due to being sold just after a sanction period … Chelsea didn’t need those contract lengths to hit their spending levels. They are doing it for future flexibility, but if they want to muck about to make people feel better … fine, I guess?

United will soon have more money than most other clubs. The people that buy you will find a way to spend the money they have to make your club as good as humanly possible. It’s really that simple.
 

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Great work @Messier1994

I've a question about the debt though. I see a lot of if the new owners wipe the debt etc

However, my understanding is that any sale would wipe the debt. It would baked into the sale price, wouldn't it? I'm dubious anyone will buy anyway at the prices quoted but it wouldn't make sense to hand the Glazers 5 billion and take on their debt.
 

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Great work @Messier1994

I've a question about the debt though. I see a lot of if the new owners wipe the debt etc

However, my understanding is that any sale would wipe the debt. It would baked into the sale price, wouldn't it? I'm dubious anyone will buy anyway at the prices quoted but it wouldn't make sense to hand the Glazers 5 billion and take on their debt.
The debt isn't on the glazers' name, it's on the clubs name. That's what the problem was with their takeover. They loaded us with debt to take it over which I don't even know how it was allowed, but shouldn't be. So to buy the club, you just buy it off of the previous owner, all else remains as is.
 

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The debt isn't on the glazers' name, it's on the clubs name. That's what the problem was with their takeover. They loaded us with debt to take it over which I don't even know how it was allowed, but shouldn't be. So to buy the club, you just buy it off of the previous owner, all else remains as is.
It's no longer allowed as far as I'm aware and really shouldn't have been at the time but here we are.

Why would they take on a debt though? There's no upside to it that I can see if it will cripple their ability to improve the team in the transfer market.
 

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It's no longer allowed as far as I'm aware and really shouldn't have been at the time but here we are.

Why would they take on a debt though? There's no upside to it that I can see if it will cripple their ability to improve the team in the transfer market.
The debt is part of the club, no one could buy the club without also buying the debt, and it would be factored into the price.

Any buyer will first of all decide the maximum they think the club could be worth to them, say £4.0b. But the club has £0.5b debt, so the are willing to pay £3.5b. Of course they would offer less to begin with, but would be prepared to go up to £3.5b, but not above, because their valuation is £4.0b.
 

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@Messier1994 what does selling players do for our balance sheet in terms of FFP?

Maguire - £30m. We signed him for 80 on a 6 year contract, and 4 years would've elapsed this summer so leaving just £27m of that value. That would give us a profit of just £3m against the balance sheet - and then what's the impact of wages?
 

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The debt is part of the club, no one could buy the club without also buying the debt, and it would be factored into the price.

Any buyer will first of all decide the maximum they think the club could be worth to them, say £4.0b. But the club has £0.5b debt, so the are willing to pay £3.5b. Of course they would offer less to begin with, but would be prepared to go up to £3.5b, but not above, because their valuation is £4.0b.
Or pay the 4b and wipe the debt as part of the deal?
 

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Or pay the 4b and wipe the debt as part of the deal?
No, because if you gave the Glazers £4b they would feck off with it :)

You give them £3.5b and use the other £0.5 to pay off the debt. If you want to pay it off, it might be better for tax reasons to leave it on the books, buy you would know the club valuation would always include it, so the saleable value would remain less in that case.
 

Messier1994

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Maybe I'm reading it wrong, but that doesn't look great for us.
No, but its manageable if we finish top 4. We need to sell players anyway, even if it comes at a cost. Management must admit past mistakes and accept the price set to our players by the market.

If we miss top 4 -- then it is much more cumbersome. But as of now, it looks like we got a good chance.

@Messier1994 what does selling players do for our balance sheet in terms of FFP?

Maguire - £30m. We signed him for 80 on a 6 year contract, and 4 years would've elapsed this summer so leaving just £27m of that value. That would give us a profit of just £3m against the balance sheet - and then what's the impact of wages?
It impacts our earnings and hence our FFP status in three ways, (1) like you say, if we buy Maguire for 80m and have amortized it down to 27m and sell him for 30m, we make a 3m profit. Mechanically, its an asset that is removed from the balance sheet that is listed at 27m and we add 30m in cash or receivables, it grows the asset side and the difference between assets and debts is a profit. (2) his value is amortized with 13m per year, that 13m is an expense, and (3) his wage is also an expense, at say 10m per year, and since we don't have to pay it if we sell him, its another 10m yearly reduction to expenses. So ultimately, if we sell Magure for 30m Day 1 of Q1 (1st July), it will improve our earnings that year with 3m + 13m + 10m = 26m. If we sell him for 10m it will instaed be 13m + 10m - 17m = 6m improvement. The second year, its back to 23m, and after year three he would be off the books anyway.

Love your posts, thank you. A couple of things come to mind, happy for them to be shot down.

Firstly I'm not sure about demand for players dropping, come summer we could be looking at Newcastle going into full spending mode, plus both United and Liverpool with new high-spending owners. Might not happen, but if it did there would be huge amounts cascading down the system, I couldn't see player prices dropping in that scenario.
Thanks! That is a good point! I actually talked to a football executive today in another matter and he said that the new Fifa Agent rules would provide his big with a big relief, more or less 10% of their yearly transfer spending. All of a sudden we have QSI investing in Tottenham who spends like 500m like Chelsea next summer. Who knows. For a while China took some players.

Secondly, thinking about FFP, weren't Juventus and the like prime movers in wanting FFP in the first place, to defend their status against 'new-money' clubs? If it's affecting them badly will they still want FFP? We know in the above scenario Newcastle, Liverpool and United wouldn't, and others, and money talks in the football associations, so is there not a chance FFP would be allowed to fail?
Very interesting point, I wonder if they knew what they were getting into. I think a lot of teams out there are afraid of the Premier League right now.

The Swedish rumble assumes no new information or strategies would be possible. I hate always having to play Ian Malcolm from Jurassic Park on here … but money will find a way. The idea of trying to micro manage little details like contract lengths and thinking that will make a massive change is …well, arguably not legally enforceable, but also short-sighted and stupid. Teams will just reclassify how revenue and incomes are structured. The real issue is that NONE of you want an actual even playing field. You never did. You just wanted a playing field that continued to favor the same teams. Even playing fields are rough. My (American) football team is going to have take a right tackle in the draft and let a very good player go for nothing just because they can’t afford what his contract value should be in their cap structure. Half your roster can change nearly every year, and sometimes getting a good team is just luck. I personally don’t think that’s better. But this big announcement on ending the contracts longer than 5 years and “stopping Chelsea” is just a mirage to mollify angry fanbases. And they will soon be just as angry at United when you have owners with actual wealth once again. But the thing is: they need that money. The trickle down of massive expenditures of PL teams are keeping some of these teams and leagues afloat. Teams can’t field 40 odd players, so there is only so much advantage a team can get, even with greater resources. An Ajax, on its day, can still win its league and upset teams on a run to a CL final. The only difference is whether you want that result with extra billions going out to the teams that need the money, OR the exact same result without those teams getting the money. This is about ensuring “specific” teams stay in the upper echelon. The Real Madrid and Barcelonas of the world , otherwise there is literally no point. Didn’t Madrid get sold “training ground” land at deflated values, then sell it or lease it back to the state for massive gains awhile back? I don’t want to hear a peep from them. Barca encouraging public threats and pressure on players to get them to void their rightful contracts? That’s ok, but two extra years on a players contract is the great evil? Please. The fact is, due to the structure of their sale, the specific way in which their debt was forgiven, the allowances on the ending 3 yr avg plan due to Covid, investment offsets like women’s football (where Chelsea were huge), a massive gap in generated money from academy players, sales and loans over time, and additional allowances for hardship status we qualified for due to being sold just after a sanction period … Chelsea didn’t need those contract lengths to hit their spending levels. They are doing it for future flexibility, but if they want to muck about to make people feel better … fine, I guess? United will soon have more money than most other clubs. The people that buy you will find a way to spend the money they have to make your club as good as humanly possible. It’s really that simple.
I do agree with a lot of what you are saying. I am also well versed in US pro sports (the NHL). Looking at how extremely rigidly those franchises are governed -- its hard to see how UEFA could enforce a similar system to a "salary cap" on a diverse environment like this. But at the same time -- with for example the NHL you have a salary ceiling at perhaps 62.5m and a hard salary cap at 85m, and 32 teams spending between those levels. Of all teams that are contenders, all are more or less around 80-85m. If one of them could "cheat" 10% -- it has a huuuge impact. The football world is so different, "5%" for Leicester is nothing for us. Most other big clubs in Europe have to "cheat" several 100 percent to compete with a top PL club. Even a big club like Inter Milan's revenue is what 350m, ours is 600m. Ajax is at 180m.

One thing to note though, is that there is no "catch all" provision in the FSR, nor anti-circumvention rule. Hence, you can for example sign a 30 y/o player to a 15 year contract (5+10 option years, FIFA only allows max 5 year guaranteed contracts).

So it will have an impact. And just like at the last round of UEFA sanctions this summer, its for "first offenders", but getting 15-20m fines is not insignificant. The rules expressly set out that sanctions shall be progressive, if they breach them again after 6 months, the fines should be higher and additional sanctions should be decided.

Great work @Messier1994

I've a question about the debt though. I see a lot of if the new owners wipe the debt etc

However, my understanding is that any sale would wipe the debt. It would baked into the sale price, wouldn't it? I'm dubious anyone will buy anyway at the prices quoted but it wouldn't make sense to hand the Glazers 5 billion and take on their debt.
The debt isn't on the glazers' name, it's on the clubs name. That's what the problem was with their takeover. They loaded us with debt to take it over which I don't even know how it was allowed, but shouldn't be. So to buy the club, you just buy it off of the previous owner, all else remains as is.

The debt is part of the club, no one could buy the club without also buying the debt, and it would be factored into the price.

Any buyer will first of all decide the maximum they think the club could be worth to them, say £4.0b. But the club has £0.5b debt, so the are willing to pay £3.5b. Of course they would offer less to begin with, but would be prepared to go up to £3.5b, but not above, because their valuation is £4.0b.
Or pay the 4b and wipe the debt as part of the deal?
No, because if you gave the Glazers £4b they would feck off with it :)

You give them £3.5b and use the other £0.5 to pay off the debt. If you want to pay it off, it might be better for tax reasons to leave it on the books, buy you would know the club valuation would always include it, so the saleable value would remain less in that case.
That is correct. The obligation to pay the debt is on Manchester United plc. When the club is sold, the debt falls due. Hence the buyer have to negotiate a new debt arrangement with the buyers own banks or the clubs current banks. Sometimes debt is moved up to the buyers parent company, if the buyer can get better terms in another entity. But I would assume that the debt more or less is left as it is.

Fantastic work on this thread Messier.
Many thanks!
 

Mickeza

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@Messier1994 This is great stuff. Can I ask - what do you work out to be our amortised transfer and agent spend next year? I’m probably missing something here but looking at our signings last 5 years and spreading that cost over the course of the contract I worked out 150m. Add that to a 350m wage bill and we’re looking at 500m squad cost - if revenues with CL are 650m that gives us 85m to play with. Do players like Rashford et al have a cost? Or De Gea who we bought more than 5 years ago?
 

Messier1994

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BTW; an off topic question, I started a twitter account, has so much time on my hand so thought I could do a little lobbying for the club, and share some info that I write on here. Anyway, I was just told that in the threads I made, only the first tweet can be seen and the rest are marked as "Tweet is not available", anyone have any idea what that could be about? Here is one of the threads... When I tried searching for my profile on my other account, I couldn't even find it... :(
 

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@Messier1994 This is great stuff. Can I ask - what do you work out to be our amortised transfer and agent spend next year? I’m probably missing something here but looking at our signings last 5 years and spreading that cost over the course of the contract I worked out 150m. Add that to a 350m wage bill and we’re looking at 500m squad cost - if revenues with CL are 650m that gives us 85m to play with. Do players like Rashford et al have a cost? Or De Gea who we bought more than 5 years ago?
Thanks! :)

Of course, here is my chart. Don't hesitate to ask if you want to spreadsheet in edible form.


So for 22/23, I got our amortization to be 140.6m or 35.1m per quarter. This is based on reported transfer fees. To this comes agent fees, add-ons paid out during the period etc. The reported amortization during Q1 was 40.1m, which is 14% higher than the number I got. That seems pretty reasonable. I get a remaining balance of 444.9m, while the reported remaining balance is 494m, 11% higher.

The amortization number I get for next season is 126.7m. It seems sensible to assume that the actual number will be about 14% higher. That means that our Amortization next season should be 144m (before summer additions), which is down from about 160m this year.

I also realize that I have not counted "option years" as part of the period for the amortization. I saw somewhere that Chelsea did that. Not sure how we do.
 

Messier1994

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BTW; an off topic question, I started a twitter account, has so much time on my hand so thought I could do a little lobbying for the club, and share some info that I write on here. Anyway, I was just told that in the threads I made, only the first tweet can be seen and the rest are marked as "Tweet is not available", anyone have any idea what that could be about? Here is one of the threads... When I tried searching for my profile on my other account, I couldn't even find it... :(
Perhaps it was some temporary glitch, now I can at least see them from my private account... Can you guys see the tweets below the first one?
 

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Thanks! :)

Of course, here is my chart. Don't hesitate to ask if you want to spreadsheet in edible form.
Thanks! Love a spreadsheet! So if that’s at 140m added to the wage bill of circa 350m we’ve got a fair chunk to spend even without selling provided we get CL - 95m remaining based on FFP revenues of 585m (90% of 650m?) Or are there additional costs I’m missing?

Sell Scott, Maguire, Henderson and AWB that’ll up that kitty very nicely! I’m assuming when you sell the fee gets amortised over their remaining contract length? So if we got 35m for Mctominay with 5 years left it’s +7m for next 5 years? Also assuming any underspend can’t be rolled over?
 

Messier1994

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Thanks! Love a spreadsheet! So if that’s at 140m added to the wage bill of circa 350m we’ve got a fair chunk to spend even without selling provided we get CL - 95m remaining based on FFP revenues of 585m (90% of 650m?) Or are there additional costs I’m missing?

Sell Scott, Maguire, Henderson and AWB that’ll up that kitty very nicely! I’m assuming when you sell the fee gets amortised over their remaining contract length? So if we got 35m for Mctominay with 5 years left it’s +7m for next 5 years? Also assuming any underspend can’t be rolled over?
In relation to the Squad Cost Rule, I don't think these rules ever will be much of a concern for us. The cost for all other employees are excluded from the SCR, and we employ over 1,000 people of which pretty many are somewhat paid handsomely. According to my calculations, the cost for for these employees are app. 30m (its probably a bit higher). That gives us the following ratio, and our wage bill is really high:


Without Ronaldo and ETH on lower wages alone, we should be fairly close to 70%. And the threshold is 90% the first season, 80% the second season and then 70% after that.

The Football Earnings Rule is more cumbersome, since it will be calculated on this and next season (the first time) and we surely will record a loss this year. The expenses under this rule is basically the amortization of 140m, the total wage bill of 350m, financing costs (40m a year, perhaps) and of course "other costs" that mount up.
 

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The maths/numbers nerd in me loves this sort of stuff!

Top work Messier1994!

The Chelsea figure makes for really good reading. Historically they have been really good at selling players, however I think that will change as clubs know they will be desperate to sell and will have a lot of players on big wages that need shifting.
 

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In light of the standings we have right now -- i.e. with Arsenal, City, Newcastle and us finishing top 4 -- this is how the top 6 summarize with my forecasts:


Note that only we and City have published our 21/22 AR. With the other clubs, I have looked at Off the Balls forecasts for 21/22, and made my own forecast for 22/23 and 23/24 based on their forecast. However, the bottom line for me that I feel quite comfortable with from a margin of error perspective:
* Liverpool and Arsenal can spend as long as they finish top 4 long term. Since you perhaps cannot count on that every year with the way the PL looks right now -- although, remember, next year 5 PL teams will qualify for the new CL -- they have to be fairly careful. Non of them could go on a Chelsea type of spending spree.
*Tottenham can spend a ton -- but they don't have the money. They make a big loss every year, but since so much of it is attributable to the stadium, they don't have the cash flow to sign players. If they get outside investment -- they could easily improve a great deal.
*Both we and City must sell to buy. City have a built in cushion from the Jesus, Zinchenko and Sterling sales, but if they didn't sell anyone last summer they are in a worse state than us.
*Chelsea, yeah, forget about them continuing the spending spree if they finish outside the CL (although, not being evaluated by UEFA if they finish outside of Europe altogether might actually buy them another transfer window).
*If we don't finish top 4 this year, we have very little room to accomplish anything next summer even if we sell quite many players.

@miked99 Thanks! He got bone cancer in 2020 and was declared healthy in 2021, but then in the fall of 22' the crap came back and had spread pretty much, but treatment and everything is going really well and it looks that he could be declared healthy again this spring. Then of course its all about it not coming back again in the coming years. But right now I am pretty ecstatic because it looked kind of grim there for a while. He is a big Man Utd fan (he is 14 y/o), so we have had a pretty fun time following the team 24/7 when I am there (me and the wife take every other day).
Wouldn’t we get extra 6.5m from Tuanzebe and Jones salary added into that 21m since they are basically going to leave the club due to out of contract? Or you have included it?
 

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Made a thread on the Osimhen to Napoli transfer, and how it’s — accused — of cheating the FFP. It’s a transaction type that can and will be used in the future to circumvent the FFP/FSR, but probably not as blatantly as Napoli, Juve and Barca have.

 

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Good article here. (You can see athletic articles without being subscribed in literally 2 clicks on your phone).

Also generally speaking I am not super worried. Ronaldo was horrible business but we cut him out, and are going to surely try and get rid of Maguire, McTominay, bailly, Telles, Elanga, Henderson and some others this summer, drastically lower de geas wages this summer, and we'd only need to actually replace Maguire and McTominay, but with players on significantly lower costs. Getting us at an acceptable wage level shouldn't be hard. It's just been dumb management to stock pile like we have.
 
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