Manchester United ended the transfer window with a spend of around £216 million. This figure is vastly bigger than the £120 million that was reported to be the funds new manager Erik ten Hag was being backed with originally. This begs the questions, what state are United’s finances in, and where did this extra funding come from?
Certainly the original transfer budget was surpassed by close to £100 million, yet only three first team players were sold by United, James Garner for around £15 million, Andreas Pereira for around £8.5 million and Tahith Chong for a fee believed to be around £1.5 million. These sales alone do not recoup much in terms of value, although money has been saved by the likes of Cavani, Pogba, Matic and Lingard being off the wage bill, however that is not going to be immediate money available for extra transfer funds.
So just how have United been able to surpass the reported transfer kitty? Have the Glazers finally decided to thrust a hand in one of their many sizable pockets and actually invest their own cash into the club?
Twitter user Toe in the Water has taken a closer look at the books using finance blogger Swiss Ramble’s figures and other various information sites. One big standout from his findings is the use of a £100 million overdraft facility which United appear to have tapped into.
UNITED. Including Antony, over £200m has been spent in the window. Only £8m was recovered (Pereira). But how was it financed? United has been losing big money in recent years 👇🤔 pic.twitter.com/Arnxi3dJqw
— Toe In The Water (@ToeInTheWater1) August 28, 2022
Now, a club having an overdraft certainly isn’t unheard of, in fact it’s quite commonplace, for example Newcastle recently secured a £100 million overdraft facility despite having mega rich owners. However the biggest difference is that United appear to be utilising this overdraft facility in order to maintain operations and possibly transfers, whereas Newcastle’s overdraft has not been touched.
This suggests cash flow issues within the club, something the Swiss Ramble’s figures highlight also. This is a marked change from a few years ago, where the club appeared to be cash rich. Obviously the pandemic has hit the club hard in this respect, as it has most clubs, with United being the club to lose the most from the lack of matchday revenue.
Another way that United have managed to fund this transfer window comes down to transfer finance with other clubs, this essentially means paying for a transfer over a number of years instead of a cash lump sum. This generally leads to a higher overall cost, however, through clever accounting using player ‘amortisation’ (basically writing off the cost of a player evenly after every year of contract) and not paying a hefty lump sum, it becomes a way to fund a splurge without losing immediate war chest funds.
The issue with this, according to Toe In The Water, is UEFA Financial Fair Play (FFP) looks at this transfer finance as part of a club’s debt and so is included in FFP reports. This wouldn’t be such an issue if The Glazers hadn’t already saddled the club with debt which the club itself has paid interest on throughout the owners reign.
The big issue with United right now is the owners’ apparent reluctance to spend their own money on the club, despite the fact they are still taking out dividends. FFP regulations from UEFA and the Premier League do now limit what owners can put in from their own wallets in terms of transfer funds, however things like infrastructure and youth teams can be financed by Glazers within FFP, which would surely free up cash for other ventures such as transfers.
The Glazers have been looking for external investment recently with a view to spending money on Old Trafford – despite themselves reportedly having a net worth of $3.5 billion, again the reluctance to actually finance any of this themselves, whilst still pulling out dividends is quite frankly disgusting.
Whilst United fans cannot begrudge the much needed transfer spending, despite it looking like a panic move to quieten down the recent protests (which it most definitely won’t), when the current finances look so thin one can only assume that the immediate future of any big spending transfer windows almost rely on Erik ten Hag securing Champions League qualification and getting United back on to the top table in world football, or the Glazers finally selling to an owner who knows how to run the club in the right way.
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