The uncomfortable truth - United’s current finances.

Plant0x84

Shame we’re aren’t more like Brighton
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Some points to highlight the clubs financial position and go some way to explain why the club/INEOS are doing what they are doing. This is summarised from an Athletic article by Mark Critchley. You can read the full article here.
Why United have a cash problem

  • Uniteds ‘available’ cash balance stands at £228.6m, but is made up of a £200m draw down on the RCF (debt) and £79m invested by SRJ/INEOS which is earmarked for infrastructure projects.

  • United still have a net figure of £319m in transfer fee instalments to pay for players they have already signed, with at least £154m due within a year.

“The thing that goes under the radar with Manchester United is that, especially under the Glazers, they bought players on tick,” Kieran Maguire
Click to expand...

  • United have had to defer payments, spend on credit and pull different financial levers to maintain their level of investment in the playing squad.

  • the Glazers’ decision to continue paying out £166m in dividends over the course of a decade between 2012 and 2022, much of which lined their own pockets as majority shareholders.

  • United have struggled to generate cash through their day-to-day operations as a club and business since the pandemic. Short of becoming a Champions League-quality side overnight, there are two ways United can quickly improve things: by cutting costs and selling players.
This isn’t about defending or championing anyone. I’m sick of seeing the same old ‘Jimmy rat this’ and ‘INEOS leeches’ that, which is not only inaccurate (they are literally playing the hand they have been dealt) but also provides a protective shield for the Glazers who always have been and remain the true cause of all Uniteds woes. This must not be forgotten until they are gone for good.
 
Ineos saw the financial books and they still went in bed with the Glazers. It was SJR choice to buy a minority stake this adding mileage to the Glazers reign

If I intend to spend 5 euros then I don't visit a Ferrari shop
 
Sassy Colin said:
This is, like, the 10th finance thread this week.

Enough already!
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We are a football club, a top one while at it. If SJR didn't want to pump billions into the club to get us back to our feet then he should have invested in a smaller project. Getting nice fc to the CL for the first time since they bought them would be a good project to start with

Fans shouldn't be the ones paying for SJR's obsession to own a stake at the club and play FM by hiring and firing managers and sporting directors
 
devilish said:
We are a football club, a top one while at it. If SJR didn't want to pump billions into the club to get us back to our feet then he should have invested in a smaller project. Getting nice fc to the CL for the first time since they bought them would be a good project to start with

Fans shouldn't be the ones paying for SJR's obsession to own a stake at the club and play FM by hiring and firing managers and sporting directors
Click to expand...
Yup, when the glazers announced the sale, there were only two possible outcomes that would allow the club to compete at the top table.

A complete buyout with all debt removed, then the club generates enough cash to fund itself.
A partial takeover with a huge cash injection to reduce debt to negligable levels.

Any situation that left either the glazers or the debt meant we were pretty screwed. This deal left us both.
 
Yes, the club is practically broke. Our financial situation is shit.

It's very difficult to drill that into people's heads. Even now you still hear posters go on about a squad rebuild this summer or "sell so and so for 50m to unlock 250m in PSR funds for new players".
 
Plant0x84 said:
Some points to highlight the clubs financial position and go some way to explain why the club/INEOS are doing what they are doing. This is summarised from an Athletic article by Mark Critchley. You can read the full article here.
Why United have a cash problem

  • Uniteds ‘available’ cash balance stands at £228.6m, but is made up of a £200m draw down on the RCF (debt) and £79m invested by SRJ/INEOS which is earmarked for infrastructure projects.

  • United still have a net figure of £319m in transfer fee instalments to pay for players they have already signed, with at least £154m due within a year.



  • United have had to defer payments, spend on credit and pull different financial levers to maintain their level of investment in the playing squad.

  • the Glazers’ decision to continue paying out £166m in dividends over the course of a decade between 2012 and 2022, much of which lined their own pockets as majority shareholders.

  • United have struggled to generate cash through their day-to-day operations as a club and business since the pandemic. Short of becoming a Champions League-quality side overnight, there are two ways United can quickly improve things: by cutting costs and selling players.
This isn’t about defending or championing anyone. I’m sick of seeing the same old ‘Jimmy rat this’ and ‘INEOS leeches’ that, which is not only inaccurate (they are literally playing the hand they have been dealt) but also provides a protective shield for the Glazers who always have been and remain the true cause of all Uniteds woes. This must not be forgotten until they are gone for good.
Click to expand...

Honestly it amazes me how many have.

Maybe Ineos should just sell 25 % of their 28 %, pretend these people are in charge, and let them take the flak for them.
 
Nogbadthebad said:
Yup, when the glazers announced the sale, there were only two possible outcomes that would allow the club to compete at the top table.

A complete buyout with all debt removed, then the club generates enough cash to fund itself.
A partial takeover with a huge cash injection to reduce debt to negligable levels.

Any situation that left either the glazers or the debt meant we were pretty screwed. This deal left us both.
Click to expand...

Excuse my ignorance but can debt simply be cleared like that, without breaching financial regs? It feels like that just gives clubs a green light to rack up massive debts by spending huge amounts, then just clearing the debts afterwards.

98% chance I’ve misunderstood something, I’m aware
 
NicolaSacco said:
Excuse my ignorance but can debt simply be cleared like that, without breaching financial regs? It feels like that just gives clubs a green light to rack up massive debts by spending huge amounts, then just clearing the debts afterwards.

98% chance I’ve misunderstood something, I’m aware
Click to expand...
Clearing as in paying off? How and why should this be prevented?
 
Sassy Colin said:
This is, like, the 10th finance thread this week.

Enough already!
Click to expand...
Frankly we need another 10 threads like it. It really can’t be overstated.

There are too many knee jerking about INEOS, transfers, the manager, job cuts and cutbacks etc and not actually knowing or understanding why the club are doing what they are, which leads to conspiracies like Ratcliffe is only in it for the money, INEOS are worse than the Glazers (I mean, really?!!) or they just want to frack OT/Carrington and it is absurd and unhelpful in the extreme. You can’t have a rational conversation on those terms. People need to educate themselves, I’m just trying to help.
 
NicolaSacco said:
Excuse my ignorance but can debt simply be cleared like that, without breaching financial regs? It feels like that just gives clubs a green light to rack up massive debts by spending huge amounts, then just clearing the debts afterwards.

98% chance I’ve misunderstood something, I’m aware
Click to expand...
Issuing debt and paying it off are a capital structure and cash flow matter, not a revenue and expense on a P&L (aside from the interest expense that's incurred), so they wouldn't count toward PSR.
 
the hea said:
I'm confused.
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Maybe I misunderstood the question. No one stops Ratcliffe or you and me from paying off United's debt. That doesn't change anything for our PSR though. The interest on debt does, so future PSR calculations would be more positive without interest having to be paid
 
hellhunter said:
Maybe I misunderstood the question. No one stops Ratcliffe or you and me from paying off United's debt. That doesn't change anything for our PSR though. The interest on debt does, so future PSR calculations would be more positive without interest having to be paid.
Click to expand...

Pexbo said:
Why would a loan be factored into the books as income?
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You are both right of course. I don't know what I was thinking really.
 
Get rid of overpaid deadwood and introduce a salary cap of 150K.

Shaw, Casemiro, Rashford, Lindelöf, Eriksen, Antony all need to go. That would save our finances.
 
The rule that should rule all rules in football club ownership is that you can’t buy a club and then let the club pay for it self. That is so wrong and horrendous in every possible way.
 
devilish said:
We are a football club, a top one while at it. If SJR didn't want to pump billions into the club to get us back to our feet then he should have invested in a smaller project. Getting nice fc to the CL for the first time since they bought them would be a good project to start with

Fans shouldn't be the ones paying for SJR's obsession to own a stake at the club and play FM by hiring and firing managers and sporting directors
Click to expand...
The alternative to SJR wasn't Qatar running things, it was the Glazers running things. Nobody wants to pump billions into United. That's why we have INEOS. There is no magic wand. So we are going to have to earn our way out of it. And we can, but it's going to be a rough couple of years while we do that.
 
Plant0x84 said:
Some points to highlight the clubs financial position and go some way to explain why the club/INEOS are doing what they are doing. This is summarised from an Athletic article by Mark Critchley. You can read the full article here.
Why United have a cash problem

  • Uniteds ‘available’ cash balance stands at £228.6m, but is made up of a £200m draw down on the RCF (debt) and £79m invested by SRJ/INEOS which is earmarked for infrastructure projects.

  • United still have a net figure of £319m in transfer fee instalments to pay for players they have already signed, with at least £154m due within a year.



  • United have had to defer payments, spend on credit and pull different financial levers to maintain their level of investment in the playing squad.

  • the Glazers’ decision to continue paying out £166m in dividends over the course of a decade between 2012 and 2022, much of which lined their own pockets as majority shareholders.

  • United have struggled to generate cash through their day-to-day operations as a club and business since the pandemic. Short of becoming a Champions League-quality side overnight, there are two ways United can quickly improve things: by cutting costs and selling players.
This isn’t about defending or championing anyone. I’m sick of seeing the same old ‘Jimmy rat this’ and ‘INEOS leeches’ that, which is not only inaccurate (they are literally playing the hand they have been dealt) but also provides a protective shield for the Glazers who always have been and remain the true cause of all Uniteds woes. This must not be forgotten until they are gone for good.
Click to expand...
Another “we’re going bankrupt” post designed to get a response. Mission accomplished.

We have a money problem like all of the PL clubs have a money problem. The debt is an issue, but not an insurmountable one. If SJR pays off the debt, it increases his stake in the club, and it dilutes the Glazers. In fact, any nickel from his own pocket does this.

INEOS has 3B in cash. While SJR’s calculated wealth is tied up in INEOS stock, this is fairly liquid.

The Swiss Ramble estimates that we could spend 100m in January and still not run afoul of PSR.

Everyone is complaining about ticket prices increasing and the cost cutting measures, but these moves were made to improve our free cash flow, allowing us to invest more in the squad. They are estimating 49m is annual savings from cost cutting, plus the 79m earmarked for infrastructure doesn’t count towards PSR.

I’m not saying our financials are perfect, far from it, but having a “rich grandfather” means we aren’t in danger of bankruptcy or PSR penalties.
 
And why some people ignore the fact that Ineos has been involved with the club for over a year now, and they led the summer spendings of 2024? Did they forget about PSR?
 
DSG said:
Another “we’re going bankrupt” post
Click to expand...
Nope, read it again. I have stated the purpose of the post was to help those who don’t necessarily understand the financials, and to explain why INEOS are doing what they are with the cost cutting and selling before we buy. The Athletic article I linked to sets it all out clearly and I thought it was interesting enough to warrant sharing.

Probably think twice next time when I try to have a genuine conversation and all I get is name calling and snidey comments.
 
devilish said:
Ineos saw the financial books and they still went in bed with the Glazers. It was SJR choice to buy a minority stake this adding mileage to the Glazers reign

If I intend to spend 5 euros then I don't visit a Ferrari shop
Click to expand...
Pretty much
 
Big Ben Foster said:
Issuing debt and paying it off are a capital structure and cash flow matter, not a revenue and expense on a P&L (aside from the interest expense that's incurred), so they wouldn't count toward PSR.
Click to expand...

Ah, ok that does make sense. So Ipswich could, for example, issue £8 billion of debt, but it wouldn’t affect what they could actually spend? And if a new owner came in and paid it off it wouldn’t count as Ipswich itself having ‘spent’ £8 billion.
 
Plant0x84 said:
Some points to highlight the clubs financial position and go some way to explain why the club/INEOS are doing what they are doing. This is summarised from an Athletic article by Mark Critchley. You can read the full article here.
Why United have a cash problem

  • Uniteds ‘available’ cash balance stands at £228.6m, but is made up of a £200m draw down on the RCF (debt) and £79m invested by SRJ/INEOS which is earmarked for infrastructure projects.

  • United still have a net figure of £319m in transfer fee instalments to pay for players they have already signed, with at least £154m due within a year.



  • United have had to defer payments, spend on credit and pull different financial levers to maintain their level of investment in the playing squad.

  • the Glazers’ decision to continue paying out £166m in dividends over the course of a decade between 2012 and 2022, much of which lined their own pockets as majority shareholders.

  • United have struggled to generate cash through their day-to-day operations as a club and business since the pandemic. Short of becoming a Champions League-quality side overnight, there are two ways United can quickly improve things: by cutting costs and selling players.
This isn’t about defending or championing anyone. I’m sick of seeing the same old ‘Jimmy rat this’ and ‘INEOS leeches’ that, which is not only inaccurate (they are literally playing the hand they have been dealt) but also provides a protective shield for the Glazers who always have been and remain the true cause of all Uniteds woes. This must not be forgotten until they are gone for good.
Click to expand...

Unfortunately although you are correct that the Glazers are the source of the issue, INEOS getting involved is exactly what has facilitated the Glazers not being gone for good, and that shouldn't be forgotten or shielded either. They are now an active part of the problem.

Which is the main reason why it seemed like a terrible idea from the get go. Cutting costs and selling players does not and will not solve the problem of the Glazers leeching the club dry.
 
Plant0x84 said:
Nope, read it again. I have stated the purpose of the post was to help those who don’t necessarily understand the financials, and to explain why INEOS are doing what they are with the cost cutting and selling before we buy. The Athletic article I linked to sets it all out clearly and I thought it was interesting enough to warrant sharing.

Probably think twice next time when I try to have a genuine conversation and all I get is name calling and snidey comments.
Click to expand...
Nothing snide about it.

This has been covered in several threads.

Most of the articles written about United’s finances are from sport journalists who don’t really understand high level finance. Most of them are clickbait.

The Swiss Ramble, which I referenced, shows where we are in respect to transfer spend. INEOS are doing what every acquiring company would do: look for areas to reduce costs, particularly in areas that don’t drive revenues, and invest in areas that will (stadium, training ground facilities, SQUAD, MANAGER / COACH, academy and player development).
 
noodlehair said:
Unfortunately although you are correct that the Glazers are the source of the issue, INEOS getting involved is exactly what has facilitated the Glazers not being gone for good, and that shouldn't be forgotten or shielded either. They are now an active part of the problem.

Which is the main reason why it seemed like a terrible idea from the get go. Cutting costs and selling players does not and will not solve the problem of the Glazers leeching the club dry.
Click to expand...
I doubt the board will continue to allow dividends in the middle of splashing cash on a new stadium. INEOS is now the single largest shareholder if you count the Glazers individually.
 
Won't somebody please think of our poor billionaire and his conglomerate :(

They didn't ask for all the mean names or abuse
 
NicolaSacco said:
Ah, ok that does make sense. So Ipswich could, for example, issue £8 billion of debt, but it wouldn’t affect what they could actually spend? And if a new owner came in and paid it off it wouldn’t count as Ipswich itself having ‘spent’ £8 billion.
Click to expand...
Well, the interest on the debt would impact PSR. £8 billion at 7% annual interest would be a lot of money!
 
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