The uncomfortable truth - United’s current finances.

lolok said:
And you are ignoring the huge operating expenses that United have. Barca makes a lot of revenue too, but they are broke.

It's not how much you make, it's how much you spend. United spends.

Hojlund, Onana, Mount, Martinez, Antony, Casemiro, Malacia, Sancho, Ronaldo and Varane. Over 500mm Euro's on those players and not one of them is a player United needs to keep. (Some have already left.) Not one core player from that spending spree. Not to mention the 200 million Euro's they spent this past transfer window.

700 million Euro's spent on players the past 4 years. That is why United is broke. Not only did they overpay on the transfer fee for most of the players, they are also overpaying on the wages of players.


Surprise, Surprise. United hasn't made a profit for 5 years. Gee, I wonder why? Why look at the waste of money spent on wages and transfer fees. That is why. Even better, United still owes some 300mm on installments for this fine collection of players they have purchased over the past few years.

Hate to break it to you, but United isn't exactly as flush as you think they are. Of course they are telling investors that things are fine, because they have a plan for fiscal responsibility, and you aren't going to like it. They are going to limit spending, which you all will moan about. They are going to try and increase revenue from increased ticket prices, which you will all moan about. They may sell naming rights to Old Trafford, which you will all moan about. They may sell Garnacho, which you will all moan about. They have already cut employees expenses, which everyone has moaned about.

United needs 2 really good years in a row to get back into better financial health. In 2 years, they should be able to slash the wage bill from players transferring or their contracts expiring. They will spend less in the transfer window, and possibly recoup money via sales. (Garnacho and others.)

Does it suck? Yes it does.

It's not ideal, but when you are broke, these are the sacrifices that need to be made. I know broke people who make 500,000 a year-- I know people who make 50,000 a year who will retire at 55. Revenue is one thing, but when you spend more than you generate-- you aren't in good financial shape. Manchester United went on a big spending spree the past 4 years and the bills are coming due. Just like people who rack up massive debt from spending on cars, clothes, jewelry and what not. Eventually you have to pay the piper.

The good news is United has the means to pay for this once they get their expenses under control, but it is going to take time to control their biggest expense, which are the players. It is going to take time for them to shift the bad contracts off of the books, while at the same time, hoping to not repeat previous failures of overspending on transfer fees and wages.

Arnold, Murtough and ETH really screwed over the club with their 2 terrible summer transfer windows. But the past is the past, and now United has to clean up the mess they made. It's going to take time. Since a small % of our fanbase has zero patience, this is going to be a rough couple of years for you.
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Good post.
 
lolok said:
And you are ignoring the huge operating expenses that United have. Barca makes a lot of revenue too, but they are broke.

It's not how much you make, it's how much you spend. United spends.

Hojlund, Onana, Mount, Martinez, Antony, Casemiro, Malacia, Sancho, Ronaldo and Varane. Over 500mm Euro's on those players and not one of them is a player United needs to keep. (Some have already left.) Not one core player from that spending spree. Not to mention the 200 million Euro's they spent this past transfer window.

700 million Euro's spent on players the past 4 years. That is why United is broke. Not only did they overpay on the transfer fee for most of the players, they are also overpaying on the wages of players.


Surprise, Surprise. United hasn't made a profit for 5 years. Gee, I wonder why? Why look at the waste of money spent on wages and transfer fees. That is why. Even better, United still owes some 300mm on installments for this fine collection of players they have purchased over the past few years.

Hate to break it to you, but United isn't exactly as flush as you think they are. Of course they are telling investors that things are fine, because they have a plan for fiscal responsibility, and you aren't going to like it. They are going to limit spending, which you all will moan about. They are going to try and increase revenue from increased ticket prices, which you will all moan about. They may sell naming rights to Old Trafford, which you will all moan about. They may sell Garnacho, which you will all moan about. They have already cut employees expenses, which everyone has moaned about.

United needs 2 really good years in a row to get back into better financial health. In 2 years, they should be able to slash the wage bill from players transferring or their contracts expiring. They will spend less in the transfer window, and possibly recoup money via sales. (Garnacho and others.)

Does it suck? Yes it does.

It's not ideal, but when you are broke, these are the sacrifices that need to be made. I know broke people who make 500,000 a year-- I know people who make 50,000 a year who will retire at 55. Revenue is one thing, but when you spend more than you generate-- you aren't in good financial shape. Manchester United went on a big spending spree the past 4 years and the bills are coming due. Just like people who rack up massive debt from spending on cars, clothes, jewelry and what not. Eventually you have to pay the piper.

The good news is United has the means to pay for this once they get their expenses under control, but it is going to take time to control their biggest expense, which are the players. It is going to take time for them to shift the bad contracts off of the books, while at the same time, hoping to not repeat previous failures of overspending on transfer fees and wages.

Arnold, Murtough and ETH really screwed over the club with their 2 terrible summer transfer windows. But the past is the past, and now United has to clean up the mess they made. It's going to take time. Since a small % of our fanbase has zero patience, this is going to be a rough couple of years for you.
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10/10. Also to add for those players we get almost no money back when trying to sell them.
 
I’m trying to see things positive. I myself love being economical in the sense that I don’t like to spend. Use things I buy and think things through before from time to time spending.

I hope United think things through, put money on their academy, bring in cheap, but we’ll scouted players. Cycle the whole squad and be a Brentford on steroids. No more silly Pogbas, Ronaldo’s or even Hojlunds. It’s so much more satisfying as a fan to see our own players grow, or see players excel you didn’t know about.

For me I can take ten years as mid table team if we can transform into functional club with a structure in place on both the footballing as well as on the management side.

Look at Liverpool, it took them several decades of trail and error (a lot of errors) to become a well oiled machine who is one of the top clubs in Europe.

What’s important is the direction!
 
Nogho said:
I’m trying to see things positive. I myself love being economical in the sense that I don’t like to spend. Use things I buy and think things through before from time to time spending.

I hope United think things through, put money on their academy, bring in cheap, but we’ll scouted players. Cycle the whole squad and be a Brentford on steroids. No more silly Pogbas, Ronaldo’s or even Hojlunds. It’s so much more satisfying as a fan to see our own players grow, or see players excel you didn’t know about.

For me I can take ten years as mid table team if we can transform into functional club with a structure in place on both the footballing as well as on the management side.

Look at Liverpool, it took them several decades of trail and error (a lot of errors) to become a well oiled machine who is one of the top clubs in Europe.

What’s important is the direction!
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Liverpool were among the top spenders during the entirety of it and they turned things around by hiring one of the very best coach the moment he was available. And they didn't do it with academy players or accepting to be a midtable club.
 
JPRouve said:
Liverpool were among the top spenders during the entirety of it and they turned things around by hiring one of the very best coach the moment he was available. And they didn't do it with academy players or accepting to be a midtable club.
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True, but it still took them time to find what worked for them. Klopp has left and they work pretty good this far.

They were never in this kind of situation economically either.
 
Nogho said:
True, but it still took them time to find what worked for them. Klopp has left and they work pretty good this far.

They were never in this kind of situation economically either.
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Liverpool were in deep shit under Gillett and were only saved by the sale to FSG. And Liverpool were never really bad, it took them a long time to win the league after being juggernauts but they largely remained between 3rd and 5th, at the end of the 2000s they had larger money and Football issues but still remained in the top 10, now after Fenway purchased them it took 2 years to finish 2nd and less than two seasons later they had Klopp.
 
JPRouve said:
Liverpool were in deep shit under Gillett and were only saved by the sale to FSG. And Liverpool were never really bad, it took them a long time to win the league after being juggernauts but they largely remained between 3rd and 5th, at the end of the 2000s they had larger money and Football issues but still remained in the top 10, now after Fenway purchased them it took 2 years to finish 2nd and less than two seasons later they had Klopp.
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But was not this before PSR and new rules and FFP etc.

It seems like you know more about this than me. I only followed their fall from grace from a distance. But I still think we should work to be a better functioning club.
 
Nogho said:
But was not this before PSR and new rules and FFP etc.

It seems like you know more about this than me. I only followed their fall from grace from a distance. But I still think we should work to be a better functioning club.
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PSR and FFP are only an obstable to spending more, the club is fine it's just painful for us, fans, because we want to be at the top and celebrate trophies. That's totally different to actual financial struggles that see a club close to adminstration. And of course we should work to be a better functioning club but it doesn't mean becoming a midtable club by design.
 
JPRouve said:
There is no but involved, the poster stated that LBOs were illegal in the US, they are not. They are also not illegal in the NFL but they are made impractical by league bylaws which is something that I already mentioned.
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I’m not sure of the legality but I bet you cannot cite one in the last 15 years in mlb, nba, nfl.
 
JPRouve said:
Probably not but that's not due to it being illegal because it's not.
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The amount of debt that could be used to purchase an NFL team in 2005 was $50 million. Malcolm Glazer could not under NFL rules, purchase a franchise in the same manner that he bought Manchester United, which was with 73% debt. The NFL didn't increase the debt amount again until 2015 and even with that substantial increase, Glazer could not have purchased an NFL franchise. So, what he was barred from doing in the USA, he was allowed to do in the UK. It was illegal under NFL rules. Did you do any research? I gave you enough sources but if you just want us to accept your word for it, great. I'll give that a pass.
https://www.sportsbusinessjournal.c...gues-and-Governing-Bodies/NFL-debt-limit.aspx
 
Moriarty said:
The amount of debt that could be used to purchase an NFL team in 2005 was $50 million. Malcolm Glazer could not under NFL rules, purchase a franchise in the same manner that he bought Manchester United, which was with 73% debt. The NFL didn't increase the debt amount again until 2015 and even with that substantial increase, Glazer could not have purchased an NFL franchise. So, what he was barred from doing in the USA, he was allowed to do in the UK. It was illegal under NFL rules. Did you do any research? I gave you enough sources but if you just want us to accept your word for it, great. I'll give that a pass.
https://www.sportsbusinessjournal.c...gues-and-Governing-Bodies/NFL-debt-limit.aspx
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That's basically the point JP was making though. There's no US law against LBOs - what prevents them from happening in the NFL are the restrictions in the league bylaws.

Feels like everyone's saying the exact same thing but in different ways, and just talking past each other as a result.
 
Big Ben Foster said:
That's basically the point JP was making though. There's no US law against LBOs - what prevents them from happening in the NFL are the restrictions in the league bylaws.

Feels like everyone's saying the exact same thing but in different ways, and just talking past each other as a result.
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I agreed with JP about the legality of LB, but in the general corporate business world. My point remains that what Glazer did in Manchester, he could not do in Miami. The rest is splitting hairs. Anyway, I'm done with this topic. If people are interested, there's a ton of data out there to show what Glazer was about before he rocked up here.
 
Moriarty said:
The amount of debt that could be used to purchase an NFL team in 2005 was $50 million. Malcolm Glazer could not under NFL rules, purchase a franchise in the same manner that he bought Manchester United, which was with 73% debt. The NFL didn't increase the debt amount again until 2015 and even with that substantial increase, Glazer could not have purchased an NFL franchise. So, what he was barred from doing in the USA, he was allowed to do in the UK. It was illegal under NFL rules. Did you do any research? I gave you enough sources but if you just want us to accept your word for it, great. I'll give that a pass.
https://www.sportsbusinessjournal.c...gues-and-Governing-Bodies/NFL-debt-limit.aspx
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No in 2005 it was 150m. It has never been 50m, it jumped from 40m in 1994 to 55m in 1996. And there is no 73% in the rules. Currently it 700m plus an additional 700m for new buyers.

https://www.msn.com/en-us/sports/nf...=1&batchservertelemetry=1&noservertelemetry=1

https://www.fitchratings.com/resear...debt-limit-increase-outlook-stable-27-10-2023

1996 RESOLUTION FC-1

Whereas, the Finance Committee has reviewed the League’s current debt limit in light of numerous current economic factors and conditions, including recent changes in franchise values and current and foreseeable club revenue levels;

Resolved, that effective March 31, 1996, the amount of debt which each member club may incur, as described in 1988 Resolution FC-3 (which set the debt ceiling at $35 million and took effect on March 31, 1988), be raised from the current $40 million (at which the debt ceiling has been set since March 23, 1994) to $55 million; and
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2001 RESOLUTION FC-4

(AS AMENDED)

Whereas, the Finance Committee has reviewed the League’s current debt limit in light of numerous economic factors and conditions, including franchise values and current and foreseeable club revenue levels;

Be it Resolved, that effective immediately:

1. The amount of debt which each member club may incur (as defined and

described in 1988 Resolution FC-3) shall be raised from the current $100

million to $125 million;
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2005 RESOLUTION FC-2

(As Amended)

Whereas, the Finance Committee has reviewed the League’s current debt limit in light of numerous economic factors and conditions;

Be it Resolved, that effective immediately:

1. The amount of debt which each member club may incur (as defined and

described in 1988 Resolution FC-3) shall be raised from the current $125

million to $150 million;

2. Subject to Paragraph 3 below, such debt may be secured by or a liability of

either the member club or its principal or controlling owner, as permitted

under 1996 Resolution FC-1;

3. The level at which 1998 Resolution FC-9 requires club-related liabilities of

the principal or controlling owner (including obligations secured by his

interest in his club) also to be secured by a pledge of club assets shall

remain at $25 million; and

4. Consistent with 2001 Resolution FC-4, in connection with any acquisition

of a member club or any controlling interest therein, the principal and/or

controlling owner shall be required to invest equity (cash on hand or funds

borrowed against other current or determinable future assets of such

owner) in a minimum amount to be determined by the Finance Committee,

and no acquisition transaction that the Finance Committee finds to be excessively leveraged shall be recommended by the Finance Committee for membership approval.
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Moriarty said:
The amount of debt that could be used to purchase an NFL team in 2005 was $50 million. Malcolm Glazer could not under NFL rules, purchase a franchise in the same manner that he bought Manchester United, which was with 73% debt. The NFL didn't increase the debt amount again until 2015 and even with that substantial increase, Glazer could not have purchased an NFL franchise. So, what he was barred from doing in the USA, he was allowed to do in the UK. It was illegal under NFL rules. Did you do any research? I gave you enough sources but if you just want us to accept your word for it, great. I'll give that a pass.
https://www.sportsbusinessjournal.c...gues-and-Governing-Bodies/NFL-debt-limit.aspx
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Big Ben Foster said:
That's basically the point JP was making though. There's no US law against LBOs - what prevents them from happening in the NFL are the restrictions in the league bylaws.

Feels like everyone's saying the exact same thing but in different ways, and just talking past each other as a result.
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Agreed.
 
JPRouve said:
No in 2005 it was 150m. It has never been 50m, it jumped from 40m in 1994 to 55m in 1996. And there is no 73% in the rules. Currently it 700m plus an additional 700m for new buyers.

https://www.msn.com/en-us/sports/nf...=1&batchservertelemetry=1&noservertelemetry=1

https://www.fitchratings.com/resear...debt-limit-increase-outlook-stable-27-10-2023
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JPRouve said:
JPRouve said:
No in 2005 it was 150m. It has never been 50m, it jumped from 40m in 1994 to 55m in 1996. And there is no 73% in the rules. Currently it 700m plus an additional 700m for new buyers.

https://www.msn.com/en-us/sports/nf...=1&batchservertelemetry=1&noservertelemetry=1

https://www.fitchratings.com/resear...debt-limit-increase-outlook-stable-27-10-2023
Click to expand...

It has never been 50m, it jumped from 40m in 1994 to 55m in 1996. And there is no 73% in the rules. Currently it 700m plus an additional 700m for new buyers.

https://www.msn.com/en-us/sports/nf...=1&batchservertelemetry=1&noservertelemetry=1

https://www.fitchratings.com/resear...debt-limit-increase-outlook-stable-27-10-2023
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How much did Glazer leverage United for in 2005? The Glazers borrowed about £540 million from three New York hedge funds, Citadel, Och-Ziff Capital Management and Perry Capital. The debt was split between the family and the club, with between £265 million and £275 million secured against the assets of Manchester United. The interest payments amounted to roughly £62 million a year. That's pounds, not dollars.
 
JPRouve said:
I don't remember and that's not the point.
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Yes it is. The amount Glazer leveraged far exceeded the amount he could have leveraged under the Rules you yourself provided. Ergo, he could not have done what he did in the States. Anyway, this is just turning into a pointless pissing match. Let's just leave it there.
 
Moriarty said:
Yes it is. The amount Glazer leveraged far exceeded the amount he could have leveraged under the Rules you yourself provided. Ergo, he could not have done what he did in the States. Anyway, this is just turning into a pointless pissing match. Let's just leave it there.
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No it's not the point, first because you claimed that LBOs were illegal, they are not. And secondly because I already told you that they were impractical due to rules set by the NFL but even then it is subject a decision of the finance committee, it's not illegal at all, the owners will vote on it.
JPRouve said:
No, they weren't. Now the NFL is a closed club, a franchise can't be sold or purchases without the approval of the other owners and they set their own rules to join their club.
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You just decided to argue for the sake of it.
 
JPRouve said:
No it's not the point, first because you claimed that LBOs were illegal, they are not. And secondly because I already told you that they were impractical due to rules set by the NFL but even then it is subject a decision of the finance committee, it's not illegal at all, the owners will vote on it.


You just decided to argue for the sake of it.
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OK. Best we ignore one another from now on. Pity really,
 
Moriarty said:
OK. Best we ignore one another from now on. Pity really,
Click to expand...

We don't have to. You made a statement that was incorrect and I corrected it while adding why LBOs are unlikely while not illegal but for some reason you are hellbent on not accepting it.

But anyway, I have no issue with you and don't intend to have one.
 
JPRouve said:
We don't have to. You made a statement that was incorrect and I corrected it while adding why LBOs are unlikely while not illegal but for some reason you are hellbent on not accepting it.

But anyway, I have no issue with you and don't intend to have one.
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I conceded the LBO issue but with a caveat. My point is that given the amount of money Glazer leveraged onto United was, under NFL rules at the time, was illegal to do in the NFL. No matter how many members voted to accept, the dollar amount cap was set by regulation and could not be voted down. I use the word illegal to mean contravening rules. Maybe I should have made that point more clear.

But as long as we agree that the ownership of United are a bad lot, then there's no problem. This topic inflames passions.
 
lolok said:
And you are ignoring the huge operating expenses that United have. Barca makes a lot of revenue too, but they are broke.

It's not how much you make, it's how much you spend. United spends.

Hojlund, Onana, Mount, Martinez, Antony, Casemiro, Malacia, Sancho, Ronaldo and Varane. Over 500mm Euro's on those players and not one of them is a player United needs to keep. (Some have already left.) Not one core player from that spending spree. Not to mention the 200 million Euro's they spent this past transfer window.

700 million Euro's spent on players the past 4 years. That is why United is broke. Not only did they overpay on the transfer fee for most of the players, they are also overpaying on the wages of players.


Surprise, Surprise. United hasn't made a profit for 5 years. Gee, I wonder why? Why look at the waste of money spent on wages and transfer fees. That is why. Even better, United still owes some 300mm on installments for this fine collection of players they have purchased over the past few years.

Hate to break it to you, but United isn't exactly as flush as you think they are. Of course they are telling investors that things are fine, because they have a plan for fiscal responsibility, and you aren't going to like it. They are going to limit spending, which you all will moan about. They are going to try and increase revenue from increased ticket prices, which you will all moan about. They may sell naming rights to Old Trafford, which you will all moan about. They may sell Garnacho, which you will all moan about. They have already cut employees expenses, which everyone has moaned about.

United needs 2 really good years in a row to get back into better financial health. In 2 years, they should be able to slash the wage bill from players transferring or their contracts expiring. They will spend less in the transfer window, and possibly recoup money via sales. (Garnacho and others.)

Does it suck? Yes it does.

It's not ideal, but when you are broke, these are the sacrifices that need to be made. I know broke people who make 500,000 a year-- I know people who make 50,000 a year who will retire at 55. Revenue is one thing, but when you spend more than you generate-- you aren't in good financial shape. Manchester United went on a big spending spree the past 4 years and the bills are coming due. Just like people who rack up massive debt from spending on cars, clothes, jewelry and what not. Eventually you have to pay the piper.

The good news is United has the means to pay for this once they get their expenses under control, but it is going to take time to control their biggest expense, which are the players. It is going to take time for them to shift the bad contracts off of the books, while at the same time, hoping to not repeat previous failures of overspending on transfer fees and wages.

Arnold, Murtough and ETH really screwed over the club with their 2 terrible summer transfer windows. But the past is the past, and now United has to clean up the mess they made. It's going to take time. Since a small % of our fanbase has zero patience, this is going to be a rough couple of years for you.
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Absolutely agree, it’s going to be a fair bit of austerity before we can get out of this hole - during which time (this could be a few years) I don’t think we have a chance at even top 6-7.
 
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