Are United in Financial Trouble?

[Ford_M19]

Despairingly, the leeches are only interested in the bottom line. The push is more on the commercial side these days. They use the brand name. Performances on the pitch are irrelevant plus with a global fanbase the problem is exacerbated. Meaning target audience for sponsors etc is huge. Wish I could see a way out but struggling. Leeches will only sell once we have bled dry

 

[Bestietom]

Maybe its more to do with the strategy not working rather than the owners looking to sell. Even though if I owned United, looking at what's been spent and what now needs to be spent to reclaim our place on the food chain I would sell. The challenge is who would buy at the price the Glazers will quote?

I have a sneaky feeling there could be something brewing.

 

[Sky1981]

I was wondering that. Are United earning so much that they can spend yet even more?

We earnt 500m

Doesnt mean we can spend 500m, our wages and spending would probably be close to 400m.

Unless you're daddy banked no clubs can spend 300m on their own net profit. Most club has a net profit of around 100m.

The illusions that manchester united can spent its own money of around 400m every year is a myth.

 

[Alabaster Codify7]

Not really, I just think it's a simple as the owners have realised they arent willing to make us true contenders anymore (financially) so they're just winging it until things reach an all-time low, then they will look to leave. That might take years, yet.

 

[billybee99]

No. We do not have financial trouble.

The MUFC financial statements and obligations are publicly available and they show no signs of a struggling enterprise. The club is managing its debt just fine and has a healthy overhead.

How dare you introduce facts and reality into a thread full of guys talking like they have lunch everyday with Woodward and Judge. Interesting how not a single one responded to you but just continue surmising about our financial doom. Fans of other clubs must read this and laugh at the idiocy; even under this cloud of "financial ruin", we spend more than anyone else. We just re-signed a below average keeper to Ronaldo money (and yes, when you play at a sub-par level for more than 1 1/2 years, that makes you sub-par). Ask Jose now if he thinks Woodward and the Glazers were so cheap and he wasn't backed; wait until he sees his transfer budget at Spurs.

 

[JPRouve]

We spent a NET of about £60m last summer and so far this window we've spent nothing. On top of which we've removed millions off the wage bill. The cut backs are there and are staring you in the face.

This fabled net spend means nothing and isn't even accurate. In June 2019 our actual spendings were 178m but to some it was only 50m. You guys seem to not realize that we have installments to pay on top of the new additions and we don't even know how Inter paid. Also how much have we removed from our wage bill? We are still paying Sanchez and Smalling, we increased Rashford, Martial and De Gea's wages and we added Maguire, Wan Bissaka and James. Do you think that Lukaku, Fellaini and Herrera covered that?

 

[Bojan11]

I’m not saying the club aren’t rich but we don’t have anywhere near as much money to spend on transfers as 95% of this forum seem to think we do

We’ve spent £715m net since 2013. Only City have spent more with £735m.

Chelsea have spent £188m net, Liverpool £140m and Spurs around £60m

This forum seems to believe clubs have endless cash they can just pour into buying players and it’s just not true of any club in the world. We’ve wasted it, simple as that. Until we can get players out and reduce the wage bill i certainly can’t see a big spending spree

You could argue we had to spend that money.

Yes, we wasted it. But look how many players we basically lost for free like Rooney, Van Persie,Evra, Vidic, Giggs, Rio, Scholes etc without any transfer value.

 

[JPRouve]

What a load of bollocks. Are you talking about Bournemouth or Man United ? United could spend way way more than they have last summer and certainly more than we have spent this January window . If we had owners who where actually interested in competing then we would have made signings this window instead we are looking for loan players.

What has Bournemouth got to do with it? Being Man United doesn't mean that we don't have bills to pay and a finite amount of money available.

 

[entropy]

You could argue we had to spend that money.

Yes, we wasted it. But look how many players we basically lost for free like Rooney, Van Persie,Evra, Vidic, Giggs, Rio, Scholes etc without any transfer value.

I don't know how much value we would have gotten from any of them tbh. They were all on their way out. A better way to handle them would have been to persuade some of them to stay back and play a bigger role in mentoring the younger squad or just help with the transition post fergie.

 

[JPRouve]

You could argue we had to spend that money.

Yes, we wasted it. But look how many players we basically lost for free like Rooney, Van Persie,Evra, Vidic, Giggs, Rio, Scholes etc without any transfer value.

I don't think that we lost them for free, most of these players allowed us to not have to spend a cent in their positions because they were consistently great. The problem is that our big money transfers kind of failed, I'm thinking about Nani, Anderson, Hargreaves or the likes of Jones and Shaw most of these players were supposed to be the heir of the players that you mentioned but they never actually took their place.

 

[krautrøck]

This fabled net spend means nothing and isn't even accurate.

In an operation the size of United no numbers and figures will ever be truly accurate, there is always an element of bias and subjectivity in how look at things and what you look at, what you focus at. But to say "net spend means nothing" is nonsense, I'm sorry.

 

[Jibbs]

Could they not float all of their shares on stock exchange and receive the money that way. That means they wouldn't have to have find a buyer who's going to fork out 4bn all by themselves?

Then United's stock will become very cheap... simple demand and supply. Why would they incur such financial loss.

 

[JPRouve]

In an operation the size of United no numbers and figures will ever be truly accurate, there is always an element of bias and subjectivity in how look at things and what you look at, what you focus at. But to say "net spend means nothing" is nonsense, I'm sorry.

United is a PLC, we actually have the figures and it's not the ones that people use. Basically the net spend that people use, doesn't take into account what we are due to pay the same year, we don't start at zero, we add to an already existing summer bill.

 

[Redplane]

Can't be arsed to read the whole thread but I just want to say this:

The problem with United seems to be that we do NOT have financial troubles. If we did - we might see a bit smarter spending and recruitment.

 

[sunama]

I can think of a few reasons why we're not investing atm

- they are intent on giving someone else the job in the summer and are reserving the budget
- they are ready to sell and don't want to invest significantly until they do
- Ed or whoever is so incompetent in making deals they haven't managed to sign anyone yet

You made 3 points.
Point1: this is the excuse which was used when Ole took over and we did not spend in Jan 2019. The truth is that they were saving money. When Summer did come around and Ole was the manager, we spent about £60M, net.
Point2: possible.
Point3: Ed is incompetent. No question about that. But, he is trying to get a cheap deal done. The problem is that selling clubs want top dollar, which makes it difficult to get the deal done. If we want Bruno, we can just pay the asking price and the player will be in a MUFC shirt a few hours later.

 

[sunama]

United is a PLC, we actually have the figures and it's not the ones that people use. Basically the net spend that people use, doesn't take into account what we are due to pay the same year, we don't start at zero, we add to an already existing summer bill.

What you say is correct, but it would be a tedious argument if we looked up all the different amounts which we are paying, in installments, to various clubs, for different players.
An easier metric is the net spend. We can also use total spend.
IMO net spend is a good indicator of how willing we are, to pay top dollar for the best talent.

 

[JPRouve]

What you say is correct, but it would be a tedious argument if we looked up all the different amounts which we are paying, in installments, to various clubs, for different players.
An easier metric is the net spend. We can also use total spend.
IMO net spend is a good indicator of how willing we are, to pay top dollar for the best talent.

The issue being that you are basically happy with not acknowledging that we spend way more than what people think and that we don't have the liquidity if at some point we don't sell players. The fact that it's easier doesn't make it appropriate and a tedious argument is better than a wrong one.

 

[Van Piorsing]

Maguire's deal shows we can still spend huge sums, unfortunately we don't spend it on pure world class anymore, when it looks United are still capable of doing that.

United in general are slow when it comes addressing the issues and that definitely create reasonable suspicion club have limited budget. Herrera gone and Pogba being tipped to leave while absolutely no promise that we steer away from midfield consisting Matić, Pereira and Lingard.

 

[GiddyUp]

Outside of Beckham to Real is Ronaldo the only player we've made a profit on?

 

[Amerifan]

Can't be arsed to read the whole thread but I just want to say this:

The problem with United seems to be that we do NOT have financial troubles. If we did - we might see a bit smarter spending and recruitment.

This. After SAF we threw money around like it didn’t matter. For a few years it didn’t. Now that we’re out of the CL and our sponsorships are coming due we need to be more fiscally responsible. Unfortunately, everyone from existing players to agents to other clubs still think of us as deep pocketed dupes.

 

[KingCantona87]

This. After SAF we threw money around like it didn’t matter. For a few years it didn’t. Now that we’re out of the CL and our sponsorships are coming due we need to be more fiscally responsible. Unfortunately, everyone from existing players to agents to other clubs still think of us as deep pocketed dupes.

So not bringing any players in when we badly need them is United "not wanting to be duped"? Pretty spectacular way of cutting your nose off to spite your face, at great detriment to the brand in the long-term. Great business strategy!

 

[wolvored]

When do our Adidas and Chevrolet partnerships run out? I doubt we would attract the same huge deals considering how poorly we perform and the squad we have.

This will definitely be a lot lower as I cant see anyone going overboard to pay excessive amounts to sponsor a losing team. In fact when was the last time a noodle or tractor deal was announced?

 

[Stadjer]

Outside of Beckham to Real is Ronaldo the only player we've made a profit on?

What does that matter? I rather have kept Ronaldo/Beckham than make a profit on them. Manchester United doesnt need to make a profit on players. Manchester United buys players for big money and earn money by ''selling'' the succes those players bring.

 

[wolvored]

I dont think the parasites are selling up anytime soon. At the moment the finances are still rolling in. The next 10 years the money coming in will slowly deteriorate, as things stand and we will probably go from 3rd most revenue to 6th or 7th. This will still be a considerable amount and the Glazers will still be raking it in. In 10 years they will be that much older they might decide to cash in, but I wouldnt hold my breath.

 

[sammsky1]

Does anybody else feel that United have some serious financial/cashflow problems that we aren't aware of? The constant and somewhat silly fretting over player's prices? The ever-growing amount of debt that the club (not the Glazers) are saddled with?
This whole schtick about them changing transfer policy doesn't sit well with me and I am greatly concerned that we could go the way of Leeds if things continue on as they are....

This fabled net spend means nothing and isn't even accurate. In June 2019 our actual spendings were 178m but to some it was only 50m. You guys seem to not realize that we have installments to pay on top of the new additions and we don't even know how Inter paid. Also how much have we removed from our wage bill? We are still paying Sanchez and Smalling, we increased Rashford, Martial and De Gea's wages and we added Maguire, Wan Bissaka and James. Do you think that Lukaku, Fellaini and Herrera covered that?

We have spent almost as much as City in past 7 years, but we don't have the benefit of a sugar daddy. BUT alot of our transfers are paid via staggered instalments and apparently we still owe £200m+ to be paid via instalments for transfers already happened .... have we basically already spent our transfer budget for the next few years? Add to that the suspicion that Glazers also underinvesting because they want to sell ASAP.

Anyone know what the cashflow demands on the club are for next few years, given existing contracts and delayed transfer instalments? Maybe I'm completely wrong, but this is where I also share suspicion with the OP regarding another 'Leeds United' scenario.

Combination of those 2 factors would make sense to me: a qualified accountant could tell me if that was true with a good look at our published records. Howson covers this in below VDO (start @ 4m10sec)

 

[whitworth]

According to financialfootballnews utd's costs last year were 588m & they still owed 188m in transfers, so yes its not great.

 

[cpresc]

It’s a shambles and last night was an embarrassment. I don’t like savaging our club but we clearly have negligent, apathetic and profit driven owners

30 - De Gea
45 - Wan-Bissaka
80 - Maguire
20 - Jones
0 - Williams
30 - Matic
55 - Fred
0 - Andreas
30 - Mata
15 - James
55 - Martial

I'm not a fan of the Glazers but we just lost at home to Burnley with a lineup that cost us about £360m

To call them penny pinching IMO is probably a little unfair.

Our recruitment is useless.

 

[matherto]

Outside of Beckham to Real is Ronaldo the only player we've made a profit on?

I'm sure I saw something about us actually making a profit getting rid of Mkhitaryan and getting in Sanchez in the swap deal. Not so much in terms of transfer fees but overall costs.

 

[matherto]

30 - De Gea
45 - Wan-Bissaka
80 - Maguire
20 - Jones
0 - Williams
30 - Matic
55 - Fred
0 - Andreas
30 - Mata
15 - James
55 - Martial

I'm not a fan of the Glazers but we just lost at home to Burnley with a lineup that cost us about £360m

To call them penny pinching IMO is probably a little unfair.

Our recruitment is useless.

I mean, the penny pinching is in the infrastructure of the club and not so much the transfer fees of the players.

We have no discernable football structure, instead we've got a guy good at getting in noodle sponsors and penny pinching even when spending big on transfers and also Matt Judge who as far as I'm aware has little to no impact or any discernable qualities whatsoever.

City got Txiki Begiristain in to oversee things before they got Pep, built a football structure with proper scouting networks in place, built a new academy and bought in through that and are so far ahead of us off the pitch it's not surprise they're so far ahead of us on it too.

We spend poorly because we have someone who doesn't know what he's doing with football transfers in charge of them and our scouting network both during SAF's tenure and afterwards is nowhere near up to scratch. It's tiny compared to our rivals.

 

[sammsky1]

SAF 30 - De Gea
OGS 45 - Wan-Bissaka
OGS 80 - Maguire
SAF 20 - Jones
BUTT 0 - Williams
JM 30 - Matic
JM 55 - Fred
BUTT 0 - Andreas
DM 30 - Mata
OGS 15 - James
LVG 55 - Martial

I'm not a fan of the Glazers but we just lost at home to Burnley with a lineup that cost us about £360m

To call them penny pinching IMO is probably a little unfair.

Our recruitment is useless.

Whilst there is undoubtedly a large transfer spend behind that team, it also comprises of players from 6 different managers (if you include Williams as a Nicky Butt player). The team is literally a rainbow of styles and suitability. It’s a complete mess.

At the higest level, this level of unsuitability and instability quickly gets found out.

Not employing a best in class DoF post Ferguson is proving to be Woodward’s worst decision of all.

 

[Popcorn]

We don’t need to spend huge to bring in players. We should buy players with resale value. We don’t because we pay wages that are double what other teams would pay. Most would still come for only marginally more than others offer.

We don’t need to spend 300-500m on a revamp of the squad. We need a world class manager / coaching team and the best structure to support them. We need to react quickly with transfers in and out. If the player doesn’t fit- they get sold. At the current rate, it will take 8-10 windows to rebuild this squad.

Why we have resigned some of our expensive yet average players does not fit with a cost cutting narrative.

 

[0161_UNITED]

Usually, someone with a finance background will pop up and explain that the club has plenty of money.

I suspect those touting the theory that our lack of transfer activity equates to a precursor for the Glazers selling the club are going to end up sorely disappointed. There aren’t that many potential buyers for United, and those that can afford to buy United are hardly going to be incentivized or put off by transfer activity. If you can afford to buy United, you can damn well afford to buy and sell players after you buy it. The idea that, “Hey, we’ve got room to buy some players and the wage bill is lower” is hardly going to be a tipping point to encourage someone to buy United. If someone wants to buy United, it’s probably a more holistic process than “oh wow, they’ve made room I afford to buy a player or two if I bought United.” Same for the Glazers, they aren’t going to get significantly more money, or less, because of transfer activity. Now, if, say the debt was paid off - that would net them £350+ million extra in a sale most likely. Think about it, wait another 15 years and the Glazers might be able to sell off United for £2 billion pounds.

Sadly, the most likely explanation is:
1) We’ve always been very cautious about respecting the 25 man squad rule and don’t want to be paying players who won’t play.
2) Our wage structure one of the premium wage structures in world football. Players expect £100,000/week. Elite players expect £200,000 £250,000 or £300,000 a week pay packets here - because we’re paying that to the players that are here.
3) We’ve been dreadful at offloading players for 25 years and keep useless shite hanging about on high wages and we sell them for nothing.
4) The players we’ve brought in since Ronaldo left has been a mixed bag, to say the least. Our hands have burned so many times now, it certainly warrants a reassessment.
5) There’s certainly something happening behind the scenes. We’re actively offloading quite a few players. Personally, I think this is really just a plan to clear out the space to invest in younger talent and make room for them in the wage structure, rather a conspiracy theory that the club is up for sale, or has cash flow issues.

 

[GiddyUp]

What does that matter? I rather have kept Ronaldo/Beckham than make a profit on them. Manchester United doesnt need to make a profit on players. Manchester United buys players for big money and earn money by ''selling'' the succes those players bring.

That's a lovely dream. Wake up.

 

[TheLord]

Glazers are penny-pinching and the problem at United right now is United itself. The club is too big to rebuild. It is like rebuilding a huge, outdated, majestic, centuries-old mansion. Some Middle East families aside, I don’t know of potential suitors with pockets deep enough to rebuild the behemoth that United is.
Sad times.

 

[Lentwood]

You could argue we had to spend that money.

Yes, we wasted it. But look how many players we basically lost for free like Rooney, Van Persie,Evra, Vidic, Giggs, Rio, Scholes etc without any transfer value.

Yes we were mismanaged. The Glazers should have been replacing those players one by one between 2010-2014 but they didn’t. Think how much £715m would have bought you during that period! Problem is we waited until after the new TV deal and transfer fees boomed.

 

[simonhch]

I posted this in another thread but it makes more sense here:


The only prospect of a realistic buyer for the club, is a group whose strategic intent goes beyond a desire for ROI. United, as a brand, still provides a gateway to a number of international markets, and can make sense for a group looking to do an integrated expansion of a wider portfolio. There are multiple cross industry synergistic appeals, and from a branding perspective provides the opportunity for reputational rehabilitation. Hence the term “sports washing”.

All this said, there do remain opportunities for revenue growth through the proliferation of mobile broadcasting rights in emerging markets such as China; and the potential revenue boom from the creation of a long mooted European super league. My recollection of early analysis of the Glazer investment model, is that these were two of the four cornerstones essential to the long term growth of company value. The other two were (a) limiting expenses through the imposition of a salary cap, thus mitigating the greatest risk of accelerating costs I.e. player wages, and (b) the strict implementation of FFP regulations, thus suppressing the upward pressure on transfer fees brought about by the mega-rich state backed clubs. An assumption which was the basis for Woodward’s now infamous “We can do things in the market other clubs can only dream of. Watch this space.”

As we know, this latter aspiration became derailed, and the former looks unlikely to ever be ratified. Consequently, the Glazers are now facing a very real threat to their exit strategy as the club goes successive seasons without CL football. This will likely result in a 100m drop in revenues for the next annual financial results alone. All of their long term financial planning, investment strategy, and debt repayment strategy was predicated on the financial assumption that the club would, on average, achieve a QF finish in the CL every year. The lack of CL participation poses the biggest short term risk to their asset value, and something they likely never anticipated to be a long term concern. Sponsorship values will remain robust because the club has global appeal. It seems the most likely outcome that consistent failure to qualify for the CL, and the associated costs of building a squad capable of competing at the top table again, are the most likely drivers of a sale.

As painful as it is as fans to witness, it may be in our interests to sit out the CL for a couple more seasons and see the Glazers forced to sell before the asset depreciates significantly. There is a great deal of similarity to what happened to Liverpool under Hicks and Gillett. While United remain a far more robust economic entity, it still holds true that they are not immune to financial pressures. While these seem unlikely to ever threaten the survivability of the organization, they do nevertheless exist as significant drivers of potential change. In this case of ownership.

The bottom line is that the Glazers will never sell while returns are acceptable and asset value remains strong, unless they receive an offer which significantly exceeds market valuation. The sole domain of a handful of super rich or state entities. If value starts to significantly drop, such as through consistent failure to quality for the CL, and long term solutions such asa super league are effectively ruled out, then the club becomes a target for a wider group of investors, as there is growth potential in restoring it to previous glories.

I am fairly confident that these are the scenarios being weighed by the Glazers. And without being privy to the discussions of the larger European clubs, it is hard to say what the long term prospects and landscape looks like. From the outside, and a completely uninformed analysis, it would seem to me that in terms of the Glazer ownership model, the club has probably reached peak value and now would be the best time to sell. I just see too many sporting and financial challenges over the next 3-5 years; and there are considerable risks in tying an exit strategy to the rejuvenation of on field performances necessary to boost revenues. But I don’t have all the facts at my disposal, so I am just speculating.

 

[ISMAIL-007]

Well, i hope so otherwise how do we explain the failures in landing players when we are in serious need?

Plus maybe someone will wake up realize the Sky isn't blue anymore.

 

[meamth]

We have spent almost as much as City in past 7 years, but we don't have the benefit of a sugar daddy. BUT alot of our transfers are paid via staggered instalments and apparently we still owe £200m+ to be paid via instalments for transfers already happened .... have we basically already spent our transfer budget for the next few years? Add to that the suspicion that Glazers also underinvesting because they want to sell ASAP.

Anyone know what the cashflow demands on the club are for next few years, given existing contracts and delayed transfer instalments? Maybe I'm completely wrong, but this is where I also share suspicion with the OP regarding another 'Leeds United' scenario.

Combination of those 2 factors would make sense to me: a qualified accountant could tell me if that was true with a good look at our published records. Howson covers this in below VDO (start @ 4m10sec)

Was about to post that in this thread.

If what Howson said is true, then we're financially fecked.

How much more can we spend for future transfers? I hope we have accounting expert here in Caf.

 

[Stadjer]

That's a lovely dream. Wake up.

You think Manchester United needs to make profit on players to be financial stable? Sure extra money is nice but Manchester United dont have to sell players to be financial stable... atleast not as long as sponsors bring in the money.

 

[Irwin99]

Honestly don't know if there are any financial difficulties but I had the suspicion that Pogba's inevitable sale in the summer would fund the majority of our transfer dealings in the next window (and maybe even part of the Bruno deal if it goes through now). After Pogba goes, I suppose there's DDG and Martial (maybe?). There's not a lot of players left that could leave on big fees.

Net spend will be between 50-80 million again i'm sure.