How Much Money Can Manchester United Spend in the Summer?


In the club’s latest quarterly call to investors,
Manchester United revealed the financial limitations that will instruct their end of season transfer
activity. The key quote came at the end of Ed Woodward’s
opening address: “Despite being linked in the media to 111
players in January” Woodward told the conference call, “our acquisition of just one of them
– Bruno Fernandes – is an important step in (the right) direction, demonstrating our
commitment to adding experienced, world-class recruits to the exciting crop of academy graduates
that are at the heart of this developing team. “We will take the same planned, disciplined
approach this coming summer.” Woodward’s point that only one came in on
a permanent basis from a large pool of potential recruits is pertinent, as is his emphasis
on “planning” and “discipline”. United will commit funds but only for players
of quality and only at a price Woodward deems appropriate. His public words and private
negotiations must also be viewed through the lens of United’s cash levels, which are
down to £100.9 million, their lowest level since March 2015. In June 2019 that figure stood at £308 million,
but United paid out £187 million on transfer fees over the next six months, recouping just
£22 million in sales. While much of the outgoings related to previous
signings, a sizeable amount was also accounted for in the £80 million purchase of Harry
Maguire, with Leicester demanding the full fee up front — confirmed for the first time
in the most recently released accounts. Usually transfer spending is spread over a number
of years, as is the case with Bruno and, evidently, Romelu Lukaku’s move to Inter. Cliff Baty, United’s chief financial officer,
projects United’s capital expenditure for the fiscal year (July 1 2019 to June 30 2020)
to be £190 million — so a modest increase on the cash already spent. In response to a question from Laurie Davison,
a director at Deutsche Bank, about future transfer budgets, Baty said: “We don’t guide on what that will be,
for obvious reasons. What I will say, is that the level of capital expenditure we’ve got
this year does reflect the accelerated payment of and deferred receipt profile of last summer’s
activity.” This was in reference to upfront payments
for Maguire, Aaron Wan-Bissaka and Daniel James, as well as some historical staggered
spending. “That does mean our future commitments liabilities
are in a very good place, compared to where we might be in more typical years,” Baty
added. Still, it doesn’t mean that United can be
liberal with their spending. That £100.9 million cash figure hardly makes United paupers,
but it’s not extravagant either, especially not in the current transfer market. Selling players would be one way to make up
the deficit and sanctioning a transfer for Paul Pogba could fund the signings of two
players in one go. United put a £150 million price on Pogba’s head last summer but industry
sources have told The Athletic that the club may have to accept as little as £80 million. Even so, that would cover the expected cost
of Jack Grealish, described as United’s No 1 target. Should Aston Villa get relegated,
Grealish’s price would drop further, given their need to comply with profit and sustainability
rules in the Football League. Financial Fair Play of a different level was
also mentioned in Woodward’s conference call, when Randy Connick of Jefferies asked
whether the Manchester City case demonstrated UEFA’s “teeth”. There is zero chance of United spending beyond
the rules and Woodward, speaking for the first time since the announcement of City’s two-year
Champions League ban, is clearly an advocate. City’s ban, should it be upheld during their
appeal to the Court of Arbitration for Sport, would allow the team finishing fifth in the
Premier League to qualify for next season’s Champions League. It has escaped nobody’s attention that United
occupy fifth position and there would be a certain vicious irony about a club loaded
with debt taking the place of their nation-state funded rivals, punished for spending too much.
It would certainly alter the picture for United’s transfer prospects, given the ebullient revenue
streams potentially available. There is a view, though, that City will likely
be allowed to compete in next season’s Champions League while their appeal to CAS is considered.
That is the belief of David Seligman, an associate lawyer with Brandsmiths — a London and Manchester
firm specialising in sports law. “The Court of Arbitration for Sport is fairly
fluid in how they deal with cases,” Seligman told The Athletic. “They can do them quite
quickly or slowly, but when City appeal, the Court of Arbitration for Sport will postpone
any ban until the outcome of the hearing. “Then City will be able to try to delay
it, because these things take time, lots of documents, lots of witnesses. It will go well
beyond the start of next season’s Champions League. I would be surprised if City are not
in it. I don’t think any Premier League teams will benefit from finishing fifth this
season.” If that is the case and United finish outside
the top-four, the club will have to operate far more stringently than in previous years. For further reading on the implications of
Manchester United’s latest accounts, visit The Athletic.co.uk.

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