The real benefit is that the combined loss of £242m for the last three years 20/21, 21/22 and 22/23 has now cleared PSR,
the permitted loss was only £105m over the three year period however there were huge concessions due to Covid so a permitted loss may have been adjusted by £120-135m downwards, which means the club was very close to the PSR limit, what would have helped this new cycle for 23/24 is the $200m investment paid already by Sir Jim and then another $100m due in December 2024.
I’ve enclosed a Quick Look at first six months as a flash look at this years accounts by Swiss Ramble and 23/24 accounts are due June 30th 2024.
It’s really important to note that if United qualify for Europe they must abide by the 80% UEFA FSP rule which judges a clubs income differently, their criteria for the accounting period is 1st January 24 to 31st December 24 so it’s fair to say with Europa football the revenue would reduce by £25-30m on the previous year, this is going to be hard to believe but the club will be able to spend more without European qualification.
Currently there is only the 3 year FFP £105m allowed loses which is reset from this summer and all the EPL teams are trying to introduce a new 85/70 anchoring rule in summer of 2025, and some elements phased in this summer with the 90/80 rule.
This means that in 2024/25 season, Clubs who do not qualify for Europe can spend 90% of their revenue(last years accounts, those published in June 24) or those teams who do qualify can spend 80% of their total revenue in line with UEFA.
The following season proposal is for those allowances to reduce to 85% non qualification and 70% qualification in line with UEFA but the maximum spend is 4.5/5 the lowest received broadcasting revenue by a PL team. So If the last Places PL team in 24/25 receives £107m and the allowance is 4.5 then £481.5m will be the maximum expenditure on wages, Net transfer, Amortised Transfer and Agent Fees.
Assuming Man City or Man United report £700m and qualified for Europe they would be allowed to spend 70% of that income or £490m, however with the anchoring rule if the 4.5 slide is approved then the maximum spend would be £8.5m less than that at £481.5m. This is why they were the only two teams plus Villa who voted against the proposal.
This summer the club could effectively spend a huge spree, however the reality is there is very little working cash available maybe a maximum of £100-£120m after the company credit card was repaid with sone of Sir Jim’s investment, so the real issue here is will Sir Jim invest more money to maximise this summer transfer window, he could but only if he takes over another 3-5% of the shares and this is where he has the Glazers tied up in knots, he’s only going to invest in this mess for more shares, they really are not as smart as most of the media think they are?
No European Football and with a projected revenue of £680m for 23/24 season and even 80% UEFA threshold would be £544m allowed on Wages(300m), Agent Fees(35m), Amortised transfer(96m) would leave £110m as transfer spend allowance without any player sales and this figure becomes higher to nearly £200-250m as transfers are amortised on the books by contract length.
The Ineos input right now is to strip the costs back, reduce employee numbers and costs by 20%, introduce a new CFO who will be running accounting forecast after forecast and looking at ways to cut costs and more importantly losses. They will see the playing staff as needing a huge overhaul and the quickest way is to have a fire-sale to generate actual working capital to facilitate these changes.
This is the main reason SA is so important, it’s widely known that SA pro league pay up front in one instalment so selling Casemiro and a few others for £50m would generate cash, which the club will need especially in player buy out clauses which must be paid normally in one instalment.
https://swissramble.substack.com/p/manchester-united-finances-h1-202324
