I've been asking this (and of City and even Arsenal) for months... and Chelsea even seem able to put in a large bid for Garnacho
How bad is it, really? (Financial thread)
- Thread starter Nogho
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Journalists pretending that amortisation is some sort of a magic trick used for conjuring money out of thin air have done irrepairable damage.
Sports journalists are honestly some of the most innumerate people out there. Most of them also don't seem capable of comprehending the concept of exchange rates - to them $100 = £100 = €100.
I posted a PSR working in the Ownership thread. I had an estimated pre tax loss of 119m but I was using the clubs high end estimates for EBITDA in the Q1 2025 earnings release. I estimated a cost of 27m for Community, Women' team, and Youth Development by assuming a PSR position of 0 in 2024 and backfilling. Pretty much in line with the above estimates when added up.I was actually looking at the club accounts and did some very back-of-an-envelope calculations myself using Swiss Ramble's model to try and figure out where they might be PSR wise for this season at this very early stage, this based off SR's assessment below where he calculated United should be able to lose around £120m in pre-tax profit / loss before they look to be in non-compliance with PSR:
Filling in the blanks using his model I'd worked on the assumption that these might be around the following amounts:
Operating Profit/Loss: -£85m
Swiss Ramble's model takes EBITDA (Earnings Before Interest, Taxation, Depreciation & Amortisation) which I have used as £145m (taken from club Q1 2025 report where they have outlined expected in range of £145m-160m) and deducts the following:
Exceptional Items: -£30.5m
- Player Amortisation (-£210m) - calculated using the 23/24 total as a base, I've then added amounts for the players signed this summer, then deducted an amount for Fernandes who should have been fully amortised as of last season.
- Depreciation (-£16.5m) - used SR's figure above
- Goodwill Amortisation (-£3m) -used SR's figure above
- Player Impairment (£0m) - put this at zero as it was for the last couple of seasons
Profit on Player Sales: +£35.6m
- Accounting for the 250 staff redundancies made in the summer (-£8.6m, this is confirmed in the Q1 2025 report) and expected costs for firing Ten Hag (-£10.4m) and hiring Amorim and team (£11.5m).
Net Interest Payable - £?
- This is from the Q1 2025 report. As Swiss Ramble noted it looks strangely low considering the players sold like McT, Greenwood, AWB plus the bunch of younger players... he projected this to be around £67m initially. I can't think why other than possibly some of the fees received were not as high as speculated and/or there were players sold like AWB and Donny VDB who had greater remaining amortisation fee reductions than anticipated (which could be the case if the club amortised not over the 5 year contracts they received but over 6 years including the +1 options).
This is the one that's really highly speculative and so hard to put any sort of number on, as based on the club reports this appears to be mainly based FX fluctuations linked to the club's USD borrowing.
If my above calculations are at all correct this would leave a potential of up to -£40.1m to stay within the -£120m pre-tax profit/loss figure SR mentioned in order to comply with PSR still in the next cycle.
Worth noting that the club paid interest of £60.1m last season and £20.1m in 22/23, this figure would be an average of those amounts so potentially looking at current numbers they are very tight with PSR which would explain why they are in this position where they can't commit to any spending unless they sell players this window.
Amorim's (and his entourage) costs wouldn't be treated as exceptional expenses- as with players, they would be amortized. Depreciation will be higher in 2025, but not really material, as the cost is removed for the PSR calc.
Net interest payable is one of the big unknown. The Pound weakens against the dollar in 2025 and finance costs in 2025 will be larger than 2024. I assumed a stable exchange rate (as was the case in 2024).
Yeah, we are probably a borderline pass\fail case as of now, but that can change before the deadline.
Pending transfers installments, debt service, dividends…
Man United have no positive cash flow, very few saleable assets and enormous debt and are at odds with PSR.
Chelsea were ahead of the game and stockpiled assets before they changed the amortisation loopholes as well as some well dodgey youth player hoarding for their academy so they are holding a lot of saleable assets and have cash to burn from the owners. (As well as sketchy swap deals)
Newcastle have unlimited money but are at odds with PSR
City used the Wild West days of 115 charges transforming the club to a point where they have unlimited money and the positive cash flow from success to stay within PSR for as long as they want now.
Spurs are… spurs, they have a new stadium
And Infrastructure that give them good cash flow but they don’t inject big spend into the playing squad outside of younger players.
Arsenal I haven’t done any digging to their situation if I’m honest.
Ultimately, we completely wasted any advantage we had over the league over the last decade and now even if we wanted to spend which we can’t, we are riding year by year against the PSR loss levels.
The fact we are even considering selling Garnacho and Mainoo are the only indicators you need to see about the financial state of the club. Because If Chelsea where to clear 60m for Garnacho in profit and 70m for mainoo in profit, you bet your asses that would equate to 4 or 5 big incomings ammortised. We will be lucky to replace them like for like.
Chelsea were ahead of the game and stockpiled assets before they changed the amortisation loopholes as well as some well dodgey youth player hoarding for their academy so they are holding a lot of saleable assets and have cash to burn from the owners. (As well as sketchy swap deals)
Newcastle have unlimited money but are at odds with PSR
City used the Wild West days of 115 charges transforming the club to a point where they have unlimited money and the positive cash flow from success to stay within PSR for as long as they want now.
Spurs are… spurs, they have a new stadium
And Infrastructure that give them good cash flow but they don’t inject big spend into the playing squad outside of younger players.
Arsenal I haven’t done any digging to their situation if I’m honest.
Ultimately, we completely wasted any advantage we had over the league over the last decade and now even if we wanted to spend which we can’t, we are riding year by year against the PSR loss levels.
The fact we are even considering selling Garnacho and Mainoo are the only indicators you need to see about the financial state of the club. Because If Chelsea where to clear 60m for Garnacho in profit and 70m for mainoo in profit, you bet your asses that would equate to 4 or 5 big incomings ammortised. We will be lucky to replace them like for like.
Good post. Suggests the change in manager put us in a negative PSR position by £20m+ and explains why we're willing to sell Garnacho to bail us out.I was actually looking at the club accounts and did some very back-of-an-envelope calculations myself using Swiss Ramble's model to try and figure out where they might be PSR wise for this season at this very early stage, this based off SR's assessment below where he calculated United should be able to lose around £120m in pre-tax profit / loss before they look to be in non-compliance with PSR:
Filling in the blanks using his model I'd worked on the assumption that these might be around the following amounts:
Operating Profit/Loss: -£85m
Swiss Ramble's model takes EBITDA (Earnings Before Interest, Taxation, Depreciation & Amortisation) which I have used as £145m (taken from club Q1 2025 report where they have outlined expected in range of £145m-160m) and deducts the following:
Exceptional Items: -£30.5m
- Player Amortisation (-£210m) - calculated using the 23/24 total as a base, I've then added amounts for the players signed this summer, then deducted an amount for Fernandes who should have been fully amortised as of last season.
- Depreciation (-£16.5m) - used SR's figure above
- Goodwill Amortisation (-£3m) -used SR's figure above
- Player Impairment (£0m) - put this at zero as it was for the last couple of seasons
Profit on Player Sales: +£35.6m
- Accounting for the 250 staff redundancies made in the summer (-£8.6m, this is confirmed in the Q1 2025 report) and expected costs for firing Ten Hag (-£10.4m) and hiring Amorim and team (£11.5m).
Net Interest Payable - £?
- This is from the Q1 2025 report. As Swiss Ramble noted it looks strangely low considering the players sold like McT, Greenwood, AWB plus the bunch of younger players... he projected this to be around £67m initially. Really not sure why this would be so low!
This is the one that's really highly speculative and so hard to put any sort of number on, as based on the club reports this appears to be mainly based FX fluctuations linked to the club's USD borrowing.
If my above calculations are at all correct this would leave a potential of up to -£40.1m to stay within the -£120m pre-tax profit/loss figure SR mentioned in order to comply with PSR still in the next cycle.
Worth noting that the club paid interest of £60.1m last season and £20.1m in 22/23, this figure would be an average of those amounts so potentially looking at current numbers they are very tight with PSR which would explain why they are in this position where they can't commit to any spending unless they sell players this window.
I always doubted they'd sack Ten Hag purely due to the finances. Easy to see why.
The cash isn’t there and like anyone once you are using a credit card in place of cash and constantly paying interest, repaying the debt and then taking it out again, it just makes things worse.
The Glazers are not only leeches but also not the sharpest tools in the book, all this was avoidable with some basic competence. The club has been drained of money, neglected but also somehow thrown loads of money away needlessly and carelessly.
People can have their opinions on SJR but he bought into the club to make it better on and off the pitch. I don’t see how he does that if the current status quo continues, there has to be some plan beyond what it is now. The idea some have he is here for a quick profit is nonsense, there is no quick profit, he overpaid for all his shares.
This is a brilliant post and very accurate with the information available.I was actually looking at the club accounts and did some very back-of-an-envelope calculations myself using Swiss Ramble's model to try and figure out where they might be PSR wise for this season at this very early stage, this based off SR's assessment below where he calculated United should be able to lose around £120m in pre-tax profit / loss before they look to be in non-compliance with PSR:
Filling in the blanks using his model I'd worked on the assumption that these might be around the following amounts:
Operating Profit/Loss: -£85m
Swiss Ramble's model takes EBITDA (Earnings Before Interest, Taxation, Depreciation & Amortisation) which I have used as £145m (taken from club Q1 2025 report where they have outlined expected in range of £145m-160m) and deducts the following:
Exceptional Items: -£30.5m
- Player Amortisation (-£210m) - calculated using the 23/24 total as a base, I've then added amounts for the players signed this summer, then deducted an amount for Fernandes who should have been fully amortised as of last season.
- Depreciation (-£16.5m) - used SR's figure above
- Goodwill Amortisation (-£3m) -used SR's figure above
- Player Impairment (£0m) - put this at zero as it was for the last couple of seasons
Profit on Player Sales: +£35.6m
- Accounting for the 250 staff redundancies made in the summer (-£8.6m, this is confirmed in the Q1 2025 report) and expected costs for firing Ten Hag (-£10.4m) and hiring Amorim and team (£11.5m).
Net Interest Payable - £?
- This is from the Q1 2025 report. As Swiss Ramble noted it looks strangely low considering the players sold like McT, Greenwood, AWB plus the bunch of younger players... he projected this to be around £67m initially. Really not sure why this would be so low!
This is the one that's really highly speculative and so hard to put any sort of number on, as based on the club reports this appears to be mainly based FX fluctuations linked to the club's USD borrowing.
If my above calculations are at all correct this would leave a potential of up to -£40.1m to stay within the -£120m pre-tax profit/loss figure SR mentioned in order to comply with PSR still in the next cycle.
Worth noting that the club paid interest of £60.1m last season and £20.1m in 22/23, this figure would be an average of those amounts so potentially looking at current numbers they are very tight with PSR which would explain why they are in this position where they can't commit to any spending unless they sell players this window.
Profit on Player Sales
The club sold nearly all of their players of any value after June 30th 2024, so the sales would appear as your rightly show in 24/25 accounts with the exception of Willy Kambwala, the £67m initially was probably a correct evaluation based on all the academy players we sold being set as 100% profit and no cost against the sale in the books, however, in exactly the same way we agreed for instalment payments of 3 to 5 years on the £206m player investment the club made, it’s probably fair to surmise, the £67m is been split into two to cater for clubs buying players from us using a 2 year instalment plan, I’m not 100% sure on this it just could be away of clever accounting from our new CFO. Roger Bell.
He may wish to clear the decks and it’s important to remember that all PL clubs are voting on abolishing PSR for 25/26 season with the new squad ratio/Anchoring rule idea which would probably benefit United providing they have solid working cash flow.
Sone of the money coming in for future payments might be a way of them trying to balance the books and reduce the huge current costs with player salaries and interest charges being the biggest two to try and control.
You’ve allowed a loss of £120m this accounting period from July 1st 2024 to June 30th 2025. Yes they probably do need to sell one player however the first quarter results showed an operating loss of £6.9m but a bet operating profit of £1.4m.
I genuinely think like you it’s really tight however, if we assume worst case scenario the Operating loss worsens to a similar amount as 22/23 season and finishes at £32-35m for the whole year. The exceptional items listed in last years accounts was a one off payment of commission and expenses to the Raine Group for the minority buy out, this payment would not appear in this year accounts.
The Interest payment is beyond worrying, so if we assume that’s the same amount for this season of £61m then there is little room for error, however the Sancho Sale of £23m will go down as a small player profit when his costs and wages are adjusted.
I wouldn’t be surprised if the club sell Garnaucho before February 2nd as he’s the most obvious in terms of generating a high transfer fee to potentially give them more PSR space to bring new players in.
You never will be able to. It's a continuous downgrade of your squad unless your academy somehow is one of the greatest academies on the planet in all of history all of a sudden (its not...). To correct financial issues you had 2 big options and then some minor options. We can see the route these geniuses are taking...
Major Options with major impact to financial issues:
1. Find a rich owner to actually clear your debts aka Qatar (which honestly was the lesser of 2 evils of takeover bids )
2. Get rid of all your high earning players except 2-3 high impact ones. This would mean aggressively clearing:
TOTAL NET EST. IMPACT #2 (with minimal impact to on pitch results): £180M (maybe reinvest £60M of it in young cheap players, promote academy players, free transfers)
- Maguire (old not great) £10M wages + £30M transfer = £42.5M net impact (instead somehow we renewed his contract...)
- Mount (already have Bruno, not on pitch enough) £13M wages + £20M transfer = £43M net impact
- Casemiro (old not great) £18M wages = £18M net impact
- Antony (overpaid not great) £10M wages + £20M transfer = £30M net impact
- Eriksen (old) £8M wages = £8M net impact
- Lindelof (old not good) £6M wages = £8M net impact
- Evans + Heaton (ancient) £6M wages = £6M net impact
- Shaw (not on pitch enough) £8M wages + £15M transfer = £23M net impact
3. Stop paying random people connected to United insane money (ambassadors etc.)
4. Minimize the cost of your women's team
5. Reduce staff costs
6. Increase ticket prices
Realistically, their goal seems to be to slowly clean up the finances and keep us as a stable PL side until the Super League eventually comes in to save the day (from their POV), boosting our valuation and positioning us for a sale.
Absolutely. But that was Glazers plan too. Nothing's changed same merry-go-round just more tightening on spend to offset the costs of INEOS hand in the pot.
The Glazers did not have a plan. The mess INEOS is trying to clear up, is the mess their management team created. I don't see what else INEOS can do at this moment other than cut costs, and manage transfers and loans as best they can, which may mean some cold assessments of assets (eg Garnacho)... but that's where we are. It's easy to moan about them, but when you look at the balance sheet, what alternative do they have? Short of imaginary Quatari funds, we have always been a club that financed its transfers from our operations, and those operations have been run into the ground. It's going to be a difficult couple of years for us fans while the finances stabilise, and there are big risks ahead.
The problem is everyone is having to face the reality now, some are yearning for the good old days of the Glazers where it was all swept under the carpet and just allowed to get worse. But that’s exactly why the club is in such a mess.
Unfortunately having to confront the problems and try to sort them out is painful and not a quick fix but it’s entirely necessary. It’s also magnified by how bad we have been on the pitch for the last 18 months.
If this had been done years ago it wouldn’t have been anything like as bad, it just shows the negligence and incompetence of the Glazers that it only happened when there was no other option.
It is the new ‘they got more money from selling his shirts than they paid for him’ of this decade. Completely absurd that people still go with this.
I have it on good authority that Nike will pay a part of the fee
SJR would have known the finances would be in this position when Ineos did the deal. I don’t believe any of this is a surprise to them and there must be a plan, we can’t continue to rot, surely?!
How much due diligence would someone buying a minority stake be entitled to though? I’ve no idea whether it’s a lot or a little.
They would. I reckon they'll have significantly overestimated the quality of the squad and how quickly they could turn it around on the pitch (and resulting prize money) though. They clearly thought they could get away with Ten Hag this season which was a disastrous decision setting us back a couple of years.
You're incredibly naive if you believe that. This is a classic private equity investment move. You dilute existing value and try to milk the business even more at the cost of employees/consumers. All INEOS are doing is cutting costs to pay dividend, debt, and takeover costs all the while diluting our capabilities as a club and the assets we have.
Here's what a competent "owner" would do if they bought the club:
1. Fire staff and rehire entire new leadership team and let them hire manager.
2. Sell all overpaid or aging players, except a couple to keep stability.
3. Buy a large quantity of young, cheap players for a new manager and the youth academy to develop.
4. Then start cutting unnecessary expenses and finding ways to increase revenue generation.
I don’t disagree with the point but they’d have done multiple scenarios and sensitivities, and the downside scenario would be far worse than were currently seeing so it will have been within the known events. If not the advisors would be in court and being sued!
It would cost this fantasy owner some $6bn dollars to buy united. Then another $1bn or so to clear the debts and buy out the player contracts, then maybe another 0.5bn to reconstruct the team. Until this fantasy owner materialises, our only option is to trade our way out of our current mess. Ie step 4.
I am not going to criticise ineos for not being this fantasy owner. They are what they are - the best option that was apparently available. What else can one do as a fan except cross our fingers and hope he Ratcliffe is sincere in his ambition.
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Is find it interesting that revenue stayed pretty much same over the last 8-9 years, compared to revenue of Arsenal, Liverpool, Tottenham...
Absolute transparency for a deal that size. There’s no way INEOS invest so much not knowing the complete picture. And if it’s hidden, then alarm bells go off and you walk away. They will have seen everything
Some heavy duty NDAs would have been in play
Oh they had a plan -> treat the club like an ATM that never took funds from their own bank.
I don’t even remember asking this question, but thanks!
To go into more detail, is it a legal thing? I.e. Man Utd PLC are legally obliged to share everything, warts and all with a potential investor? Or are you saying that it’s more that, given the sheer size of the deal, an investment simply wouldn’t ever be made without a full look at the books?
I do agree with you if it’s the latter. Ratcliffe may be a Utd fan, but he’s a hard-nosed businessman first and foremost.
Yeah you see everything. There'd be no point falsifying something/hiding it because it would be found and Ineos would sue the glazers.
Arsenal’s owners paid off their stadium debt and replaced it with debt to themselves which is both low interest and not required to be paid off any time soon. We’ve also finished runners-up twice and made the quarterfinals of the CL last season and the semifinals this season.
Liverpool expanded their stadium and have won two league titles and a CL.
Spurs (I grudgingly have to admit) have built a world class stadium and qualified for the CL semi-regularly.
That’s brought each team an increase to the three main income streams any club has, TV / Prize money, commercial, match day.
In short, most teams have increased their revenue in recent years. United’s extractive owners of the pitch and relative decline on it have lead to their stagnation. That, combined with debt servicing cost and PSR regulations, is becoming a problem that is increasingly difficult to ignore.
I'm amazed ours hasn't dropped to be honest. Despite all the issues and horrendous owners people are still spending money on the club, and that's exactly why the Glazers have never invested; they don't need to. I imagine if they saw it starting to fall they would try and do something about it to protect their interests (or sell), but as it hasn't there's no point. The thing is they're right, football fans are too loyal for our own good, even if it dips it probably won't be a sudden drop unless something massive like relegation happens. Obviously there's the £100m champion's league qualification thing, so that might wake them up to be fair.
I think this is right. I would also add that United was a leader among clubs in terms of monetizing and expanding commercial revenue and a lot of what has happened is just other clubs catching up in that regard while United has stagnated, partly due to middling performance on the pitch but also partly because there's only so much juice any PL club can squeeze from that lemon without shady deals like City.
In 2016, United had commercial revenues of €364m according to Deloitte. In 2024, they earned €360m.
During that same period:
-Liverpool went from €160m to €343m.
-Spurs went from €78m to €297m.
-Chelsea went from €163m to €262m.
-Arsenal went from €143m to €258m.
Exactly. INEOS aren't experts and they don't hire experts. Still not as bad as the Glazers (low bar as I don't think any other owner is this bad in the entire sporting world) but not competent enough to fix the issue as we've seen with their various sporting franchises.
Again we're seeing the same issues as we saw with Ralf.
Step 1: We are doing bad, let's hire an expert.
Step 2: We find a well qualified expert with demonstrated results (Ralf red bull, Ashworth Brighton/Newcastle/FA).
Step 3: Experts diagnose the situation and tells owner its a big project that will take methodical, detail oriented approach to rebuilding (aka time and money).
Step 4: Owners don't like that and ask for better faster solution like in Football Manager.
Step 5: Experts say sorry its not football manager and it doesn't work that way. You follow a process, mitigate risk, and good things happen over time.
Step 6: Someone less experienced and hungry to take the step thinks they can do better and makes wild promises that are low probability of success.
Step 7: Rather than trusting the expert they hired, owner asks CEO and CEO backs owner over expert too.
Step 8: Expert is removed and United gamble on unproven leadership.
Any competent leadership group would have come in and tapped up a great sporting Director to lead their operations to sync with when they would take over. They probably would informally discuss/align on what to do prior to appointment so there would be no surprises. How you'd accomplish that is hire a consultant to review things and bring the data to an Ashworth and say here's what we know. In this case any consultant would have probably told you: ETH is a mediocre coach, idiot squad builder, and has put himself in a tough spot where firing and restarting is the only viable option. Sporting Director would then say this is my plan and people I want to bring in to execute it. Everyone would agree in principle. Day 1in charge of United after the end of last season you'd do the following:
1. Fire ETH
2. Gut the squad focusing on old/overpaid players/poor mentality, hire United DNA high conviction players
3. Fill out your management group with individuals who complement your Sporting Director, preferably RECOMMENDED by the expert you sought out.
4. Rebuild by hiring the right coach who can lead a transiton period with stability/low risk (proven success, knows the league, good fit with young core playing style)
5. You'd then work to define long term play style which would synergize with the competitive advantage at United. We have a great academy, powerful brand, strong commercial revenue. You can be pretty liberal with choosing any attacking, exciting style of play as theoretically over time you'd be able to outcompete any other club if you bring some EPL proven talent and continue to accelerate youth development.
You can see how different that approach is from the reality of what INEOS did and had to scramble to align things. The point is we shouldn't have to struggle this much given our financial power, and while we are finally doing the right things, we aren't executing it at a level necessary to be the BEST in the league, which is our end goal.
Talking to yourself, mate?
Service the debts first by looks of it, for Glazers and ineos. Then transfers by looks of it.. get ready for another season of lows.. 66pts needed though that's a must.
Yes, this is a good point.
That makes zero business sense. All it does is devalue your asset so while you are paying off debts, you are just losing money hand over fist.
The Athletic is estimating that Manchester United will earn £139.5m as Premier League prize money this season.
Sorry what?
This is why the PL is actually getting good in terms of the overall level of teams, it's not lopsided. all teams get ~£80m from the broadcast + merit payments and I think we will get a bit extra for infra costs given the size of OT and we still get a lot of televised games which also bring in a small amount each time.