Surely to have a better chance of winning those cups especially the Europa we need to be looking at signing players
How bad is it, really? (Financial thread)
- Thread starter Nogho
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Surely to have a better chance of winning those cups especially the Europa we need to be looking at signing players
What I'd love to be able to understand is how Chelsea has been able to spend close to a billion on players during the last couple of years alone. What happened to the money that club owed to Abramovich? If the debt was "written off", what's stopping every other owner (including ours) from loaning their club a couple hundred million, and write the debt off in a similar fashion? I understand there's been a change of ownership, but surely that alone shouldn't reset all ffp requirements?
Dont know if the Russian sanctions came into it to allow the takeover to happen quickly and get him out of the business quickly.
With regards their spending, they have sold a significant amount of players and also they were doing very long contracts. A £100m player amortised across 6,7,8 years suddenly doesnt add much to the PSR sheet. Think they changed the rules on that.
PSR is stupid anyway. We saw clubs who were about to fall foul of it swapping academy players amongst themselves at ludicrously inflated prices just before the deadline. It isnt stopping the big clubs outspending the smaller clubs. Dont know what its meant to achieve.
Chelsea have been selling 100-150m of pure profit players every season to balance out the books. Mount, Gallagher, Hall, Maatsen, Hutchinson etc. They have also been massively bailed out by the Saudi league which bought many of their failed transfers for decent money. Plus they have sold some hotels etc to book profit.
In theory, can SJR pay off United's debt in full if he wanted to and would that free up funds to buy players? While he would not be able to fund purchase of players, this would at least stop the bleed from paying yearly interest on the debt?
I imagine our issues are primarily cash flow as opposed to PSR. People speak about us spending £200m last summer for example, but we also recouped over £100m (and counting) of that, of which Greenwood, Hannibal, McTominay, Carreras were all pure profit academy players, and Wan Bissaka had almost nothing left on his book value either. Those deals alone would allow us to spend hundreds of millions on the balance sheet.
Why would he do that when he only owns a fraction of the club? He'd effectively be giving hundreds of millions of pounds in free money to the Glazers.
Yes, PSR is a real constraint but the massive elephant in the room is that the club is broke. We can no longer afford reckless spending sprees like those of the past decade.
Lets hope, the higher ups realize that as well and double or triple their efforts in improving our scouting and recruiting game
The evidence of a financial crisis is there for all to see. There is penny pinching on a massive scale going on - latest being that the likes of Robson, Irwin and Cole having their daily ambassadorial fee cut. This goes alongside major cost cutting (like effectively banning incoming transfers despite having a playing squad of no hopers). When any organisation is cutting costs at panic levels, you know that they have a big problem.
Chelsea's transfer ban helped a lot to give them space to be able to do their stupid spending spree. They made a ton of profit in 2019/20 without making signings, and then continued to sell players for big money (especially to saudi) to help fund that. We've struggled with sales for ages (last summer was decent, but we usually spend 200m without selling anyone).
Aye, and after all that spending we've gone from Ed's 'War Chest' to Sir Jim's 'Combat Canister'...
In reality, what he is going to do is pile on even more debt onto the club when we confirm the stadium rebuild. Its just how it works.
Lets just hope in the long run we make money off the rejuvenation of the surrounding area via residential/commercial real estate.
Hard to see it coming from Football at the moment.
Yeah agree. They're only pinching the pennies because there are no pounds left to be pinched.
Couldn’t you make an argument that it’s just how Ratcliffe operates, and not indicative of anything in particular? That stupid ‘marginal gains’ thing. Much of that is obviously sporting, but part is financial: wringing every last drop of spending power out of the club in time for 25/26. I’m not sure I’m right, but I do think you are looking at the (sparse) available evidence and making a single certain inference when in reality there are other possibilities, and we can’t know which is true.
That said, there’s such a thing as ‘soft power’, when it comes to football. Man Utd and Liverpool have it in spades. In the UK I’d probably add Celtic to that, too. And as a rule treating your club heroes badly (or at least publicly treating them worse than before) surely can’t be worth the tiny amount of money saved.
We are in the most debt we have ever been in I believe, so there is perhaps something behind it
Obviously it would help, but I'm not sure it would make a huge difference short term.
As far as I know we pay interest on the debt every year, rather than chunks of the debt itself. The sum varies from year to year but it appears to be in the region of 30-35m a year. That would make a big difference long term, but it wouldn't give us a lot of extra money per year.
I think nothing here is short term for course. If SJR truly wants to leave a lasting honorable legacy, then money is nothing compared to being remembered as the one who saved United. He is after all in his seventies. Who knows what could be going through his mind?
Ratcliffe could easily wipe all debt and buy the Glazer’s out if he wanted BUT by clearing the debt whilst minority owner he’d basically be clearing the decks for the Glazer’s to massively profit rather than the club as the debt is what they saddled on the club, his buying of just the minority ownership has already given them breathing space when what was needed was to let the Glazer’s have nothing to work with and be forced into a full sale at a much cheaper price than they wanted.
That means ... tanking United would make the Glazers sell the rest of their shares wholesale to him at lower cost. I am kidding. We are such a commercial juggernaut that only multiple-years of relegation might make that a possibility.
You don’t build an empire by throwing good money after bad money.
He will do whatever he believes is right to get the club in a better position financially and structurally. He needs confidence in his support staff to enable him to be sure that any additional funding he brings in, through asset purchases, equity, or otherwise is used in the best possible way. Right now, it is on Barada Wilcox and the others to implement turnaround with the constraints they have.
Unfortunately, this means that we have another season at least of up and down performances. Suddenly, the 2028 target seems to be the first real chance, we may have of consistent performances, forget about being the title contender
If he truly wanted to leave a lasting mark on the world he could buy the Glazers out and then posthumously gift 51% of the shares to a fan trust. That way he gets to run it and then give the people back their club in perpetuity.
It's the stuff of philanthropic fairy tales, and sadly that's where that idea will stay.
We haven’t really sold many players to Saudi at all. In 3 years Mendy, Koulibaly and Angelo are the only 3 I can think of and all combined came to £55m.
Meanwhile Fulham got £45m for Mitrovic, Liverpool £52m for Henderson and Fabinho to name some examples
The important thing to note here is that if SJR pay off the debt or transfer it to INEOS, he can and would only do so in exchange for equity, meaning you would be diluting the Glazers' ownership share. For that to happen, the Glazers would need to approve of that transaction.
He could, but won’t all the time he doesn’t outright own the club.
The debt will never be paid off all the time the Glazers are majority owners.
And this is why we are selling assests
According to Deloitte we generated 771M in revenue last season which is 4th in world football. Here’s a link: https://www.espn.com/soccer/story/_/id/43516587/real-madrid-post-record-revenue-1-billion-deloitte
Is It possible that our financial situation isn’t as dire as is being suggested? They said we were screwed with PSR some people saying that we were 200M over the limit, yet we passed PSR and apparently were never in danger of it. Last summer they said we had about 20M to spend and had to sell before we buy, yet we spent over 100 million again.
Is It possible that our financial situation isn’t as dire as is being suggested? They said we were screwed with PSR some people saying that we were 200M over the limit, yet we passed PSR and apparently were never in danger of it. Last summer they said we had about 20M to spend and had to sell before we buy, yet we spent over 100 million again.
You can generate as much as you want, when your outgoings are far dwarfing it, it doesn't matter.
It doesn't matter how much money we generate if our costs outstrip it.
Beat me to it
It does have that major loophole in that it incentives clubs to "swap" their academy players for large sums. And who's to say what an inflated fee is? It's all subjective so can't really be policed. E.g. Cole Palmer didn't look worth £40m til he did. I think something is needed to keep things competitive but PSR isn't the final answer. It arguably doesn't even do what it's meant to regarding clubs like City. If they get off these charges then PSR is basically dead.
I get that, but where is the money going? If we’re the 4th highest earners and most of the clubs beneath us aren’t in this position, then we need to start rallying against the owners again because this is unacceptable to be in this position.
Wages, transfer fees, cost of sacking and hiring managers, interest on loans, and the costs incurred as part of the strategic review and share sale to INEOS - these will be the main areas contributing to United's significantly higher operating costs than most PL sides.
Couple that with inability to sell players for particularly great money and this is why United are where they are financially.
Its fans who think that if a club has 700m revenue, it should all be used for transfers, when in reality its not.
We have one of the highest transfer spends, highest wage bill one of the lowest in bringing money in for sales.
When you keep putting things on the credit card, getting new loans to pay off old ones, sooner or later it will catch up to you.
We have spent so much money with no success, its about time the club look at building a more sustainable model.
And it’s been going on for years and years and progressively getting worse, without anyone trying to address it.
Now it is being addressed it is going to be painful, at some point there has to be a change in the dynamic between SJR and the Glazers. The debt payments are only going to get higher when they have to be refinanced and there’s certainly no guarantee we’ll regularly be back in the Champions League over the next 5 years, if at all.
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:
- 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
- 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).
- 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.
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We are fecked.
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.
Exactly, the figures are there for people to see. Yet fans think INEOS are using PSR as propaganda not to spend money and are tight.
We have Mark Goldbridge leading this charge and all his minions have no idea, just follow on. Sometimes, I do like to see what some of the fans are saying about this situation. It just gives a different perspective of fans. I heard fans saying, Everton, Leicester broke rules and got fined / points deduction, why cant we just take the points deduction and buy players.
That is the level of fans these days, who will call CIty 115 cheats but want us to cheat as well. Its almost they dont realise us spending over a 1bn is the reason we have got in this mess.
Its about time someone takes hold of this situation, this is what INEOS are doing. They would not be cutting costs if the club was making loads of money and in the green.
This will be pain for a few years until we get the high earners out. our new transfer policy seems better as well, sign younger at lower transfer fees and wages.
PSR is tight but it's not the only constraint. Even now you still see posters in other threads saying things like "sell Garnacho for 50m so we can spend 200m on other players". It doesn't work that way - we are broke. The cash isn't there.