United's transfer budget and current FFP/PSR concerns

Bastian

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There are so many knowledgable posters on here when it comes to FFP and PSR. What is the current situation with FFP and PSR for United? I've seen 50m reported before we qualified for the Europa, now reported 75m, that the club can spend before sales.

Is this being used to somehow reposition United so it's not a cash pot for others like it was under Woodward (and Arnold), or to lower fans' expectations?

What money does the club actually have to spend, leaving aside FFP/PSR? And how much cash can Ratcliffe inject into the club immediately?
 

Big Ben Foster

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SJR's holding company is a minority shareholder, so he has no incentive to inject additional capital unless the other shareholders agree to have their stakes diluted. I don't know to what extent that has been or will be a roadblock.
 

Bastian

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SJR's holding company is a minority shareholder, so he has no incentive to inject additional capital unless the other shareholders agree to have their stakes diluted. I don't know to what extent that has been or will be a roadblock.
Wasn't there reports of Ratcliffe investing a further 240m ($ 300m) which would go towards unspecified things? Recently we've seen 50m towards refurbishing Carrington.

Anyhow, I'm curious to know if PSR/FFP weren't any sort of an issue, what money is there, if any. I remember the revolving credit facility which was a 300m overdraft of sorts, which is 40m in the red, currently, I gather.
 

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The info around FFP/PSR essentially relates to the previous 3 year window up to the end of this month. The position from July 1st is we can spend whatever we want and we have until June 30th of next year to balance the books, the limitations essentially will come down to how much our owners actually want to spend and how interested we are in employing Chelsea style tactics to exploit the fairly numerous loopholes in the current system.
 

VP89

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Ornstein said it was 50m before the FA Cup final and the Europa Cup qualification improves on that number. Obviously not to the extent a CL qualification would have.

Importantly the caveat from Ornstein, Whitwell etc. was that this was heard from agents, who were briefed as such from the club. I wouldn't rule out our true net budget being higher than the figure that's briefed.
 

Bastian

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The info around FFP/PSR essentially relates to the previous 3 year window up to the end of this month. The position from July 1st is we can spend whatever we want and we have until June 30th of next year to balance the books, the limitations essentially will come down to how much our owners actually want to spend and how interested we are in employing Chelsea style tactics to exploit the fairly numerous loopholes in the current system.
So in a sense it would be kicking the can down the road if we are not successful in getting players out this summer? We've got Donny, Lindelof, Maguire, AWB, and Eriksen all with a year left on their deals. If we don't do the unthinkable and trigger year options or dish out new contracts, then at least we know their wages won't eat into the wage bill from summer '25 onwards.

This is the sense I get too, spending is limited by the appetite of the owners (all of them) and not externally applied rules. Selling Greenwood for 25-30m (surely that's realistic) would likely clear that up in and of itself. Now if there's a market for McTominay that would just create loads of FFP room.
 
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Takes a bit of following but a key point is we ”lose” the crap year of 21/22 in a couple of days, so that big loss falls out of the 3-year rolling calculation.

Another point to remember is if we have PSR ‘capacity’ of say… £30m, that doesn’t mean we can only spend £30m because of the way fee amortisation works (fee is divided by the contract years).

 

Bastian

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Takes a bit of following but a key point is we ”lose” the crap year of 21/22 in a couple of days, so that big loss falls out of the 3-year rolling calculation.

Another point to remember is if we have PSR ‘capacity’ of say… £30m, that doesn’t mean we can only spend £30m because of the way fee amortisation works (fee is divided by the contract years).

Thanks for that. That's excellent. They've updated it 4 days ago, including Europa. And also explained why we wouldn't sell players before July, though signing players before makes no difference:

 

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If we sell Pellistri, AWB, Lindelof and Greenwood, just selling those four will show as profit on FFP/PSR which is obviously a good thing but we need to make solid money on them to have the cash to spend.
 

golden_blunder

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Wasn't there reports of Ratcliffe investing a further 240m ($ 300m) which would go towards unspecified things? Recently we've seen 50m towards refurbishing Carrington.

Anyhow, I'm curious to know if PSR/FFP weren't any sort of an issue, what money is there, if any. I remember the revolving credit facility which was a 300m overdraft of sorts, which is 40m in the red, currently, I gather.
Maybe I’m misremembering this but hasn’t he already put money in, a big portion of it went to clearing up some of that revolving credit debt.

my guess is that we have 50-75m during June but when July rolls round and the PSR resets, then we have more wiggle room
 

Bastian

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Maybe I’m misremembering this but hasn’t he already put money in, a big portion of it went to clearing up some of that revolving credit debt.

my guess is that we have 50-75m during June but when July rolls round and the PSR resets, then we have more wiggle room
No, you're right. 120m was cleared off the debts (the credit facility).

I am persuaded by Swedish Rumble's account. I think if the will is there, we can fix the team enough this summer to virtually guarantee CL qualification. We're already looking like we might buy a relatively cheap striker. Plenty of room left.
 

bringbackbebe

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Just because we can spend 400m does not mean we should. Chelsea situation, and our own history, should be a warning not to go down that path. Instead let's be sensible and start working on a budget of 75-100m + player sales which is sustainable and makes the suits look for good deals rather than playing Disneyland + also force us to sell better (something we suck ostrich eggs at).
 

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Just because we can spend 400m does not mean we should. Chelsea situation, and our own history, should be a warning not to go down that path. Instead let's be sensible and start working on a budget of 75-100m + player sales which is sustainable and makes the suits look for good deals rather than playing Disneyland + also force us to sell better (something we suck ostrich eggs at).
Hopefully they will put some more youth players into the senior squad instead of overspending on bench players.
 

Andycoleno9

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Takes a bit of following but a key point is we ”lose” the crap year of 21/22 in a couple of days, so that big loss falls out of the 3-year rolling calculation.

Another point to remember is if we have PSR ‘capacity’ of say… £30m, that doesn’t mean we can only spend £30m because of the way fee amortisation works (fee is divided by the contract years).

Guy says in tweet that we are out of Europe? What?

So, in simple words, can we or not spend whatever we want? Not that we should but can we.....if we want?
 

Big Ben Foster

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Guy says in tweet that we are out of Europe? What?

So, in simple words, can we or not soend whatever we want? Not that we should but can we.....if we want?
The tweet was written before we won the FA Cup
 

wildflower2007

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As much as I would like us to spend £400m to rebuild the squad, it would be madness for the club to do it.

This fantasy football business model has to stop, by all clubs really, otherwise the bubble will burst for every club. Maybe it should, as it all needs a reset.

I actually wouldn't mind if we only brought in 2 players this year, just to let finances settle and then next year have a bigger pot to play around with, without creating even more debt.

I would like the club to focus on more younger, cheaper players with potential talent/ability, rather than throwing £80-90m at every player because they're considered "world class".
 

Berbasbullet

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As much as I would like us to spend £400m to rebuild the squad, it would be madness for the club to do it.

This fantasy football business model has to stop, by all clubs really, otherwise the bubble will burst for every club. Maybe it should, as it all needs a reset.

I actually wouldn't mind if we only brought in 2 players this year, just to let finances settle and then next year have a bigger pot to play around with, without creating even more debt.

I would like the club to focus on more younger, cheaper players with potential talent/ability, rather than throwing £80-90m at every player because they're considered "world class".
I agree with this I think, I don’t mind a quieter summer so we can get our ducks in a row and let the new structure settle. If that means a more modest window followed by a focused big one next season then I’m all for it.
 

Woziak

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Thanks for that. That's excellent. They've updated it 4 days ago, including Europa. And also explained why we wouldn't sell players before July, though signing players before makes no difference:

He’s 100% correct on everything apart from we are now in Europe and are therefore subject to the UEFA Squad ratio rule which means we can only spend 80% of the fiscal year turnover (Jan 1st 2024 to December 31st 2024) So SJR and his new team are looking to reduce wages across the board, 250 staff cuts and redundancies, players on huge basic wages being stopped, Players like Varane and Casemiro leaving, uefa 25% wage reduction clause which will help the club reduce the current £380m wage bill to nearer £300-320m.

Hypothetically clubs turnover might be £650m, 80% Threshold would £520m.
Let’s assume wages our down to £300m, we then have an existing transfer debt to be included to other teams, approximately £90m and then we need to factor in Agent Fees which can’t be amortised, Zirkzee alone could be £10m so let’s say a max of £30m thats approximately £420m leaving £100m or multiplied by an average 4 year contract - £400m budget since we have passed easily Uefa 3 year FFP and PL 3 year FSR he’s right by saying a forecast of maybe £70m loss over the next three year cycle however he didn’t include SJR investment of ($300/£236m) which is used as a Director investment and basically wipes off the debt in this new 3 year cycle.

United can spend £300-400m easily this summer, will they ?
Not a Chance!
Too many chiefs now too many people who need to agree on a player.
The club will be more efficient and more organised but for all United fans this summer don’t expect miracles, realistically, the club hopefully will sell Casemiro, M Greenwood and Sancho for maybe £90m add that to a probable £110m and that’s a more realistic budget of £200m.

We might bring 4 or 5 in and get rid of 6 or 7 but seriously we might find only 1 or 2 of those signings are what the club actually needs?
 

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The bluster about ffp for the last year has been so funny. People arriving at numbers in the funniest ways imaginable. Leave the accounting off the forum I think.
 

Crashoutcassius

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No, you're right. 120m was cleared off the debts (the credit facility).

I am persuaded by Swedish Rumble's account. I think if the will is there, we can fix the team enough this summer to virtually guarantee CL qualification. We're already looking like we might buy a relatively cheap striker. Plenty of room left.
We need to improve the squad but the bigger factor in cl is ETH improving from being one of the worst managers in top half of the league to the other end. Our major issue last season was we played worse than opposition with far better players 2/3 games. So improving our players even more will mean nothing if Eth cannot get performances
 

Crashoutcassius

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No, you're right. 120m was cleared off the debts (the credit facility).

I am persuaded by Swedish Rumble's account. I think if the will is there, we can fix the team enough this summer to virtually guarantee CL qualification. We're already looking like we might buy a relatively cheap striker. Plenty of room left.
We need to improve the squad but the bigger factor in cl is ETH improving from being one of the worst managers in top half of the league to the other end. Our major issue last season was we played worse than opposition with far better players 2/3 games. So improving our players even more will mean nothing if Eth cannot get performances
 

Bastian

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He’s 100% correct on everything apart from we are now in Europe and are therefore subject to the UEFA Squad ratio rule which means we can only spend 80% of the fiscal year turnover (Jan 1st 2024 to December 31st 2024) So SJR and his new team are looking to reduce wages across the board, 250 staff cuts and redundancies, players on huge basic wages being stopped, Players like Varane and Casemiro leaving, uefa 25% wage reduction clause which will help the club reduce the current £380m wage bill to nearer £300-320m.

Hypothetically clubs turnover might be £650m, 80% Threshold would £520m.
Let’s assume wages our down to £300m, we then have an existing transfer debt to be included to other teams, approximately £90m and then we need to factor in Agent Fees which can’t be amortised, Zirkzee alone could be £10m so let’s say a max of £30m thats approximately £420m leaving £100m or multiplied by an average 4 year contract - £400m budget since we have passed easily Uefa 3 year FFP and PL 3 year FSR he’s right by saying a forecast of maybe £70m loss over the next three year cycle however he didn’t include SJR investment of ($300/£236m) which is used as a Director investment and basically wipes off the debt in this new 3 year cycle.

United can spend £300-400m easily this summer, will they ?
Not a Chance!
Too many chiefs now too many people who need to agree on a player.
The club will be more efficient and more organised but for all United fans this summer don’t expect miracles, realistically, the club hopefully will sell Casemiro, M Greenwood and Sancho for maybe £90m add that to a probable £110m and that’s a more realistic budget of £200m.

We might bring 4 or 5 in and get rid of 6 or 7 but seriously we might find only 1 or 2 of those signings are what the club actually needs?
Excellent analysis, thank you. We are in a pretty healthy position. I assume we'll buy two starters (unless Rashford is sold) and three squad players. The left back slot is maybe the biggest question. Personally, I'd like to see the club cover that by a loan or an LCB who can cover that position, whilst sending Malacia out on loan, but we'll see.
 

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Well it puts into perspective why you keep putting in bids for Branthwaite that don't meet the fee we have set.
 

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It's actually quite remarkable how unprofitable we seem to be given our standing in the game. Incredible levels of mismanagement.
 

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https://www.manchestereveningnews.co.uk/sport/football/manchester-united-record-71m-loss-29513663

This does not look good. But I must admit that I do not have a great overview or knowledge of the rules within the area. So can someone with better knowledge explain whether we can risk a points reduction (like Everton) or other punishment due to the bad accounting?
Others will know more.

But these totals include various spending that doesn’t count towards PSR (infrastructure spending etc) and also still includes the Covid season where certain allowances were made.

I would suggest that because we weren’t one of those desperate to do sales prior to July as seen with other teams we aren’t concerned. But that will also be one of the reasons for the JB low original bid.
 

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https://www.manchestereveningnews.co.uk/sport/football/manchester-united-record-71m-loss-29513663

This does not look good. But I must admit that I do not have a great overview or knowledge of the rules within the area. So can someone with better knowledge explain whether we can risk a points reduction (like Everton) or other punishment due to the bad accounting?
It is a bit of a click bait story to be honest. We would have seen significant revenue in the final quarter from April to June and we will have already made sure that we were on the right side of the line for the full year. This is not information that was not being reported back in the Spring, the only difference is that those accounts are now final and so the journos are repeating stories from months ago and acting like it is brand new information.

We are into a new financial year and are waving goodbye to the drag of the 21/22 season so we don't have PSR issues impacting spending at this point, we are not meeting the ask for Branthwaite because we don't want to pay that much not because we are broke, we are negotiating and it may be a compromise fee is ultimately agreed upon or we may move on. Everton are entitled to set any price they want and we are just as entitled to walk away if we think the price is not realistic.
 

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How reliable are the reports that we only have about £50m to spend before Sales?

(so effectively the majority of our spending will be dependent on sales?)
 

mkso

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As fans, we should just enjoy the football. The financial requirements or situations are handled by the club's extensive financial team, and we are not aware of the actual situation. There's no need for us to worry about it.
 

JJ12

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How reliable are the reports that we only have about £50m to spend before Sales?

(so effectively the majority of our spending will be dependent on sales?)
Judging by these results, fairly reliable
 

Syphon Wallet

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As fans, we should just enjoy the football. The financial requirements or situations are handled by the club's extensive financial team, and we are not aware of the actual situation. There's no need for us to worry about it.
We are not worried about it as such, it's just interesting to try and guage our budget , and then we can give a better opinion on if a transfer target is worth that portion of our budget.
 

JJ12

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I mean no chance that's true when we're chucking bids at 4/5 players and serious bids at that.
You can work on as many deals as you want, which is common practice. You want deals in place should you raise the funds required.

We're working on 3 CB deals, we won't sign 3 high calibre CB's.
 

Syphon Wallet

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I mean no chance that's true when we're chucking bids at 4/5 players and serious bids at that.
I don't know if it's true , but we don't need to wait for the money to build up in our piggy bank first.

We can go ahead and get deals done , and look to balance books after if needs be.