Business Metric: Ed has fleeced the Glazers

[Rood]

What is the best metric for judging 'good spending' clubs? I know there is no perfect solution, and there will always be a lot of debate on whether players are worth the money spent. A composite metric that incorporates a large number of variables would probably be very accurate but is very difficult to calculate.

One easily computable metric is the difference between the total market valuation of all the players and the net spending of the club - the business metric. This is a good surrogate for assessing the 'economic side' of transfers - the higher this value, the better the overall deals. For example, if United buy Sancho for £108m today, and United want to sell him next summer, we'd still be able to recoup every penny and more. So even though the net spending increases enormously, the business metric remains relatively unchanged. If Liverpool buy Salah for £40m and transform him into a £100m player (current valuation), that is better still. But if a club buys a player for £50m and is forced to sell him for a measly £20m in two years' time, it is a disastrous transfer.

This metric is extremely easy to compute and is a much better index than gross spending or net spending, in my opinion. For calculation purposes, a 10-year period seemed reasonable (2011-2020). Only the top seven big PL clubs were included in the calculation.

The new Business Metric

Net spending in the last 10 years (a)	The current market valuation of the squad (b)	The new "business metric" (b-a)
Manchester City: £867m Manchester United: £814m Chelsea: £410m Arsenal: £380m Liverpool: £335m Everton: £271m Tottenham Hotspur: £135m	Liverpool: £986m Manchester City: £933m Chelsea: £832m Manchester United: £719m Tottenham Hotspur: £697m Arsenal FC: £582m Everton FC: £441m	Liverpool: + 651m Tottenham: + 562m Chelsea: + 422m Arsenal: + 202m Everton: + 170m Manchester City: + 66m Manchester United: - 95m (minus!)

United are the only top PL team that have spent more in the last decade than the total current valuation of our players, which means our players valuations’ have depreciated significantly in recent years. Players like Pogba, Maguire, Fred, Lindelof cost a lot of money to buy, but their stocks have since plummetted. Our spending is even worse than Manchester City's. City’s squad is more valuable than ours despite similar net spending. Liverpool have done the most amazing business in the last decade, buying inexpensive players and transforming them into expensive assets (Salah, Mane, etc). Chelsea get a lot of stick for spending extravagantly, yet they have a superior business metric than even Arsenal or Everton! Liverpool, Chelsea, and Spurs are not as wasteful as United or City.

Our overall ranking in the PL is much lower than #7 shown in the table, but I have only included the traditional top PL clubs (Wolves, Leicester, etc. are excluded).

We have wasted a walloping £0.75 billion more in building our squad compared with Liverpool! Forget one, we could buy seven Jadon Sanchos with that money. Ed has fleeced the Glazers!

Interesting comparison to make but not sure what conclusions you can take from it really

10 years seems a bit too long to make comparisons about current squad value - how many players who came in 10 years ago are in those squads today?

Still didnt really need any numbers to realise we have pissed away shit loads of money in the transfer market in recent years

The source data is questionable as well but better than nothing I suppose

 

[elmo]

What is the "current market valuation" based off?

Also worth noting that two of our top 5 players that we could get the most money for (which in my mind is Pogba, Martial, Rashford, Martial and Bruno) were free/homegrown

And yet we had to spend our biggest transfer fee ever to get Pogba who'll never match that valuation again

Ed's failing in his job because his real role is to get he Glazers money and he's actually making them far less than he should he making

 

[mumbai_red]

And yet we had to spend our biggest transfer fee ever to get Pogba who'll never match that valuation again

Ed's failing in his job because his real role is to get he Glazers money and he's actually making them far less than he should he making

Fair point. But rather than looking at squad value etc. - Man United's stock price now is pretty much in-and-around what it was when listed. Pre-Covid it was 35% higher i.e. implying 35% return in 8 years. Maybe you check stock price movement from when Ed took over - surely that's the best indicator of how much value he's creating for the Glazer. Also, need to factor in dividends

 

[TheLord]

Ed's failing in his job because his real role is to get he Glazers money and he's actually making them far less than he should he making

I wanted to highlight precisely that. Many people have the misconception that Ed is making a lot of money for the Glazers when in reality he is not. Our past managers are also responsible for some of the mess but Ed’s overall ineptitude is shocking.

We generally talk a lot about how expensive the incoming player transfer fees are. In the Sancho transfer thread, there was a heated discussion between one folk who thought we should dish out £108m asap, and another who didn’t want to spend more than £90m. They were hammering away at each other for £18m! That is the typical nature of football economics - we only talk of our “shiny new toys.” However, selling players on the cheap is worse, because these transfers go relatively unnoticed. Keeping hold of deadwood for too long is terrible, as teams continue to pay the wages, and are later forced to let the players go for free or sell them for absolute peanuts.

Take Fred’s case for example. For nearly two years now, everyone knows he is not good enough to play for United. He is not in the manager’s long-term plans either. We paid a whopping £50m for him in 2018. If we were more ruthless and efficient, we could have sold him a long time back for a significant fee. Our usual dilly-dally means he will probably be sold after his stocks hit rock-bottom for ~£10-15m next summer. That is a jaw-dropping loss of £35-40m, and yet people will barely notice, let alone dissect the overall transfer in detail. In contrast, if we pay Dortmund £150m to buy Jadon Sancho in October, there will be an uproar of unimaginable proportions, several times the uproar in selling Fred for a paltry £10-15m, when in purely economic terms, United lose a similar amount (around £40m) in both the deals. (Note: I am not trying to imply that we should pay over the odds for Sancho.) In today's world, it is imperative for top clubs to sell players at the right time for the right fee and invest the money wisely to keep the squad fresh and motivated. Liverpool would not have won the PL/CL if they hadn't sold their best player, Countinho, for a net profit of £135m, and invested that money wisely in van Dijk and Alisson.

P.S. I wouldn't trust Ed to invest the profit from player sales wisely either, but that is another story.

 

[friend]

That is a jaw-dropping loss of £35-40m, and yet people will barely notice, let alone dissect the overall transfer in detail

That doesn't sound like this forum at all. Most people are talking about how we pay really high salaries which lead to very low sale prices (if a sale at all or in the Sanchez case, having to pay to sell...).

The metric is fine but it leaves out too many important factors, (like player age, club, contract length, etc.) to be used as is. However the Glazers and Ed Woodward actually do have the complete data to be able to see how much money they're making vs their financial targets. They both may be incompetent at their jobs but let's not pretend the Glazers don't actually know how much money they should be making vs the actual numbers.

 

[elmo]

Fair point. But rather than looking at squad value etc. - Man United's stock price now is pretty much in-and-around what it was when listed. Pre-Covid it was 35% higher i.e. implying 35% return in 8 years. Maybe you check stock price movement from when Ed took over - surely that's the best indicator of how much value he's creating for the Glazer. Also, need to factor in dividends

Our stock value would be higher if the team was better and paid less wages so Ed's still fecking up in that area.

 

[mumbai_red]

Our stock value would be higher if the team was better and paid less wages so Ed's still fecking up in that area.

I'm agreeing with that. Just saying, stock price is a far more simpler way to judge if Ed's making money for the Glazers or fleecing them.

 

[kouroux]

What a path this club has taken since we last won the Champions League. Probably close to 2 billion spent on failed transfers and loan/interest repayments.

People who defend the Glazers based on the fact that we have won titles under them based on the sheer iron will to win and genius of Sir Alex Ferguson, well they astound me.

The buck stops with the owners, not Ed Woodward. If Woodward is not fit for task then find someone who will. People often say that he gets a pass based on our commercial growth but obviously our commercial growth would have been even more significant if we had been competing for major honours since Sir Alex left.

Football is a sport for the people, it is something to get working men and women through the week, to provide us with something to look forward to at times. Inheritance billionaires will never understand that and to them they see our unhappiness as a bunch of people complaining about something that doesn't really matter.

Some still do ?

 

[Julian Denny]

Whether you value United at $3bn or $4bn currently it is still a considerable asset which the Glazers outlaid zilch for. United is in the top 10 richest sports teams in the world by valuation. That's why Woodward is their darling. He engineered the take over and built the commercial enterprise to the level it is today. The fact that on the football side he has wasted hundreds of millions in the transfer market, made wrong and costly managerial appointments and given a number of dud and semi dud players extortionate contracts doesn't come into it - yet! The money has been there - it has simply been misspent. United badly need a director of football but is Ed willing to let go the football reins?

 

[Red4Life_#7]

Metrics aside, we are a commerical animal and only probably Barca can compare and look at their very very very bad financial situation.

Man Utd always paid the MU tax when buying a player, so that already puts us at a financial disadvantage regarding metrics. I feel the club are trying to play more hard ball in negotiations as they know they have wasted too much money.

Everyone saw the great football we played after the re-start last season, but there was no quality depth in the team. Unfortunately we are still 2 years away from challenging for the title and that will depend on who we bring in. But we have to change the way we have been doing things since Fergie and Gill left. Hopefully we are beginning to do this...

 

[RedNed77]

Take Fred’s case for example. For nearly two years now, everyone knows he is not good enough to play for United. He is not in the manager’s long-term plans either. We paid a whopping £50m for him in 2018. If we were more ruthless and efficient, we could have sold him a long time back for a significant fee. Our usual dilly-dally means he will probably be sold after his stocks hit rock-bottom for ~£10-15m next summer. That is a jaw-dropping loss of £35-40m, and yet people will barely notice, let alone dissect the overall transfer in detail.

When did this become universally accepted? I think he’s ok, maybe not worth £50m, but I wouldn’t be rushing to sell him anytime soon?

 

[tombombadil]

The point of metrics is that they shouldn't be subjective. Assigning a "market valuation" on players when there's literally no reliable publicly available market value information is...problematic.

Exactly

 

[tombombadil]

@TheLord
I think a better metric would be the 10 year average of the ratio of change in win percentage over money spent (for each year). That would probably best isolate "sporting" value for money.

(∑ (∆ win percentage in a given year / transfer spend in a given year)) / # of years

EDIT: messed up the equation originally

This is probably a much better "metric" because it is objective, consistent and relevant.

 

[sunama]

I have been saying this for a while but we are one of the very few clubs where players actually get worse over time. We need to review our training methods and staff and take a long hard look at what other teams do to improve players.

I too, have been saying this for a while.

Generally speaking a player arrives full of live and power. We saw this last week with DVDB. He is fit and raring to go, scoring the only goal. A year or so later, the same player is no longer as good as he once was.
Bruno was phenomenal when he first arrived. An absolute game change. This season, he has been as bad as the rest of 'em.
IMO, Pogba's first season was his best for us....downhill from there.
It's as if we should outsource our training sessions to other clubs.

I have long been of the opinion that our fitness coaches should be replaced as they have consistently allowed players to become unfit. Rooney and Lukaku are the most obvious examples. I've also noticed that Shaw is consistently overweight. We've also seen that since the season has started, our team looks the worst, fitness wise.

More broadly, our personnel (not the team players), should be replaced. This includes owners, vice-chairman, (Woodward), chief contract negotiator (Judge), coaching staff (Carrick, McKenna), fitness coaches - but to name a few. Many players also need to be replaced.

 

[Coleyoscar]

I too, have been saying this for a while.

Generally speaking a player arrives full of live and power. We saw this last week with DVDB. He is fit and raring to go, scoring the only goal. A year or so later, the same player is no longer as good as he once was.
Bruno was phenomenal when he first arrived. An absolute game change. This season, he has been as bad as the rest of 'em.
IMO, Pogba's first season was his best for us....downhill from there.
It's as if we should outsource our training sessions to other clubs.

I have long been of the opinion that our fitness coaches should be replaced as they have consistently allowed players to become unfit. Rooney and Lukaku are the most obvious examples. I've also noticed that Shaw is consistently overweight. We've also seen that since the season has started, our team looks the worst, fitness wise.

More broadly, our personnel (not the team players), should be replaced. This includes owners, vice-chairman, (Woodward), chief contract negotiator (Judge), coaching staff (Carrick, McKenna), fitness coaches - but to name a few. Many players also need to be replaced.

This is true. We also seem to suffer a disproportionate number of injuries which is probably linked to the poor fitness regimes. From top to bottom we have problems. Any success we achieve has to be attained against all these odds. It was not always like this of course. Great job Ed.

 

[Revan]

I too, have been saying this for a while.

Generally speaking a player arrives full of live and power. We saw this last week with DVDB. He is fit and raring to go, scoring the only goal. A year or so later, the same player is no longer as good as he once was.
Bruno was phenomenal when he first arrived. An absolute game change. This season, he has been as bad as the rest of 'em.
IMO, Pogba's first season was his best for us....downhill from there.
It's as if we should outsource our training sessions to other clubs.

I have long been of the opinion that our fitness coaches should be replaced as they have consistently allowed players to become unfit. Rooney and Lukaku are the most obvious examples. I've also noticed that Shaw is consistently overweight. We've also seen that since the season has started, our team looks the worst, fitness wise.

More broadly, our personnel (not the team players), should be replaced. This includes owners, vice-chairman, (Woodward), chief contract negotiator (Judge), coaching staff (Carrick, McKenna), fitness coaches - but to name a few. Many players also need to be replaced.

Great post but you (deliberately) forgot the manager, who is also to be largely blamed for the mess (not as much as those who are above him Ed and the Glazers) but more than those who are under him.

I think that Glazers/Ed might still luck their way to some success if they somehow manage to get a top coach (like Liverpool’s very similar owners did), but it is hard to see the club progressing while we have mediocre owners, mediocre club hierarchy, mediocre manager, mediocre coaches (and many mediocre players on high salaries). It is a recipe for mediocrity, which is exactly what we have been getting.

 

[Carolina Red]

Alternatively, you could rely on gross or net spending, and those would be infinitesimally more inaccurate. I never said the metric is perfect.

Would it paint a more accurate picture to look at the difference in purchase price vs valuation at the time of purchase and sale price vs valuation at the time of sale?

 

[Fosu-Mens]

To have a non-quantitative measure, compare the players brought in to their suitability to a high pressing, possession-oriented and progressive style of play (Think Bayern and how they played against Barcelona)...

Not many.

 

[Sokz]

Interesting analysis. We've always been like this though, and Ronaldo was more the exception to the rule - being perhaps the only player we sold against SAF's whishes because we received an offer we simply couldn't refuse. By this metric even the likes of Rio Ferdinand, Michael Carrick etc. would've been a waste of money as they never had a transfermarkt value above the millions we paid for them. I believe historically, a big part of the united strength was that we never had any players that would be on top of the transferlists of e.g. real madrid / barca but were essential players (and in their role top 3 in the world) within this SAF framework. Notwithstanding the previous, we've had some abysmal transfers were we paid top dollar for players that aren't elite nor have we had any luck in making players into elites (aside from De Gea and perhaps Martial). Is that bad scouting or bad luck?

For what its worth, also believe that some of the transfermarkt values are absolute nonsens.

 

[TheLord]

The data in the OP has changed slightly because of the deadline day player movement. I will edit it soon.

 

[antohan]

Good read, but i would recommend another metric (if you can find it), market valuation in 2010, because not all the clubs started out on equal footing.

Not that it would make Ed look any better though, because i bet we would be top in that ranking in 2010 and would make Ed look even worse

In fairness, you could argue we had the most valuable squad or thereabouts but retired it rather than sold it so you have the handicap of having to replace top quality with no significant sales revenue.

Doesn't make up for the fact the bulk of our dealings have been abysmal.

In a nutshell, nobody will be jealous of only being able to dream what we can do in the market, because it's actually a nightmare.

 

[monosierra]

I wanted to highlight precisely that. Many people have the misconception that Ed is making a lot of money for the Glazers when in reality he is not. Our past managers are also responsible for some of the mess but Ed’s overall ineptitude is shocking.

We generally talk a lot about how expensive the incoming player transfer fees are. In the Sancho transfer thread, there was a heated discussion between one folk who thought we should dish out £108m asap, and another who didn’t want to spend more than £90m. They were hammering away at each other for £18m! That is the typical nature of football economics - we only talk of our “shiny new toys.” However, selling players on the cheap is worse, because these transfers go relatively unnoticed. Keeping hold of deadwood for too long is terrible, as teams continue to pay the wages, and are later forced to let the players go for free or sell them for absolute peanuts.

Take Fred’s case for example. For nearly two years now, everyone knows he is not good enough to play for United. He is not in the manager’s long-term plans either. We paid a whopping £50m for him in 2018. If we were more ruthless and efficient, we could have sold him a long time back for a significant fee. Our usual dilly-dally means he will probably be sold after his stocks hit rock-bottom for ~£10-15m next summer. That is a jaw-dropping loss of £35-40m, and yet people will barely notice, let alone dissect the overall transfer in detail. In contrast, if we pay Dortmund £150m to buy Jadon Sancho in October, there will be an uproar of unimaginable proportions, several times the uproar in selling Fred for a paltry £10-15m, when in purely economic terms, United lose a similar amount (around £40m) in both the deals. (Note: I am not trying to imply that we should pay over the odds for Sancho.) In today's world, it is imperative for top clubs to sell players at the right time for the right fee and invest the money wisely to keep the squad fresh and motivated. Liverpool would not have won the PL/CL if they hadn't sold their best player, Countinho, for a net profit of £135m, and invested that money wisely in van Dijk and Alisson.

P.S. I wouldn't trust Ed to invest the profit from player sales wisely either, but that is another story.

Indeed. If anything, he has proven to the Glazers that he should not be trusted with football matters. Seven years on the job and a combination of poor judgment, hubris, and inconsistent principles have led to squad bloat with no discernable philosophy. We have been reactionary, kowtowing to managers before sacking them, buying from a weak position, misreading seller intentions ... and in general, building up a reputation of ineptitude. Comments like Watch this Space and the Disneyland pitch shows how out of touch Woodward is with the realities of the football market.

 

[Bobcat]

In fairness, you could argue we had the most valuable squad or thereabouts but retired it rather than sold it so you have the handicap of having to replace top quality with no significant sales revenue.

Doesn't make up for the fact the bulk of our dealings have been abysmal.

In a nutshell, nobody will be jealous of only being able to dream what we can do in the market, because it's actually a nightmare.

That's true, but despite us having some senior players in that team with little resale value (Vidic, Rio, Evra, RvP) there still was quite a few players in their prime years and we ended up selling most of them for pitiful amounts.

Maybe Driftwood and his mates are good at sponsorship deals, but they are fecking atrocious at football transfers

 

[RedCoffee]

What is the best metric for judging 'good spending' clubs? I know there is no perfect solution, and there will always be a lot of debate on whether players are worth the money spent. A composite metric that incorporates a large number of variables would probably be very accurate but is very difficult to calculate.

One easily computable metric is the difference between the total market valuation of all the players and the net spending of the club - the business metric. This is a good surrogate for assessing the 'economic side' of transfers - the higher this value, the better the overall deals. For example, if United buy Sancho for £108m today, and United want to sell him next summer, we'd still be able to recoup every penny and more. So even though the net spending increases enormously, the business metric remains relatively unchanged. If Liverpool buy Salah for £40m and transform him into a £100m player (current valuation), that is better still. But if a club buys a player for £50m and is forced to sell him for a measly £20m in two years' time, it is a disastrous transfer.

This metric is extremely easy to compute and is a much better index than gross spending or net spending, in my opinion. For calculation purposes, a 10-year period seemed reasonable (2011-2020). Only the top seven big PL clubs were included in the calculation.

The new Business Metric

Net spending in the last 10 years (a)	The current market valuation of the squad (b)	The new "business metric" (b-a)
Manchester City: £867m Manchester United: £814m Chelsea: £410m Arsenal: £380m Liverpool: £335m Everton: £271m Tottenham Hotspur: £135m	Liverpool: £986m Manchester City: £933m Chelsea: £832m Manchester United: £719m Tottenham Hotspur: £697m Arsenal FC: £582m Everton FC: £441m	Liverpool: + 651m Tottenham: + 562m Chelsea: + 422m Arsenal: + 202m Everton: + 170m Manchester City: + 66m Manchester United: - 95m (minus!)

United are the only top PL team that have spent more in the last decade than the total current valuation of our players, which means our players valuations’ have depreciated significantly in recent years. Players like Pogba, Maguire, Fred, Lindelof cost a lot of money to buy, but their stocks have since plummetted. Our spending is even worse than Manchester City's. City’s squad is more valuable than ours despite similar net spending. Liverpool have done the most amazing business in the last decade, buying inexpensive players and transforming them into expensive assets (Salah, Mane, etc). Chelsea get a lot of stick for spending extravagantly, yet they have a superior business metric than even Arsenal or Everton! Liverpool, Chelsea, and Spurs are not as wasteful as United or City.

Our overall ranking in the PL is much lower than #7 shown in the table, but I have only included the traditional top PL clubs (Wolves, Leicester, etc. are excluded).

We have wasted a walloping £0.75 billion more in building our squad compared with Liverpool! Forget one, we could buy seven Jadon Sanchos with that money. Ed has fleeced the Glazers!

Nice work!

What is the cost of the squad v market valuation of the squad. That is the true gain/loss on transfer activity.

 

[TMDaines]

I have been saying this for a while but we are one of the very few clubs where players actually get worse over time. We need to review our training methods and staff and take a long hard look at what other teams do to improve players.

It also couldn't hurt to take a look at players we actually baught and sold during that time frame. I doubt we would fare much better but I since the numbers from transfermarkt are just guesswork, some actual hard numbers couldn't lend some more credence to this metric.

Which is why I just laugh off the anti-Pogba stuff. If stars like Di Maria, Lukaku, Sanchez, Pogba etc. all come to Old Trafford and underwhelm, whilst excelling at their previous clubs and rekindling their careers afterwards at a fellow European giant, then at some point we have to ask ourselves whether it is us, not them.

Even Herrera, the supposed opposite of these targets of scorn, thought feck it when someone else tapped him with his contract running down. He’s probably the one player post-Ferguson to use United successfully as a stepping stone up in his career.

I guarantee you that Bruno Fernandes is another one of those stars in 18 months time, underperforming and naturally considering whether there is another club to better meet his ambition. It will happen with whatever other star international players we sign in their mid-20s next too. Scrapping out for top 4 in Gorse Hill is not the stuff of dreams unsurprisingly.

It is the same with all the top talented youth too, their development gets stuck in the mire. Whose

 

[UDontMessWith24]

How could he who’s doing the devils work be fleecing him at the same time?