A quick delve in the financial world of Manchester United makes for grim, unexciting, but ultimately important, research. Whilst spreadsheets featuring lots of figures might not be quite as exciting as, say, Mainz’s ascent to the top of the Bundesliga, it’s a cause for concern in this financial climate. We’ve recently seen Portsmouth become the first Premier League club to go into administration (not to mention Liverpool, who could follow suit by the end of the week). So is this a possibility for the world’s most debt-ridden football club?
Fortunately, it looks very unlikely that that could happen. United are still an extremely well-run football club, unlike the Portsmouth of recent times. Wages have seen a fairly sharp rise, up 7%; nothing out of the ordinary, however, as all clubs experience yearly wage increases in order to stay competitive. It’s not the same as the wild over-spending that has seen Portsmouth and Hull in recent financial trouble. Total costs remained flat, however, due to a 15% drop in other costs (due to, for instance, fewer home games last season, therefore fewer staff hours, less electricity wasted on keeping crap pies lukewarm etc). Overall revenue was up 3%. So, revenue up, costs flat. Everything’s fine then.
Not quite. Once more, United have lost roughly £40million in interest payments. That’s £40million going out of Manchester United, with no benefit to the club. You could buy Mesut Ozil three times for that amount of money, with money to spare. It contributes to a fairly astonishing £79.6million loss for the 2009/10 season. What can United do to minismise such losses? Just look to the previous year when United’s pre-tax profit was £48.2million: sell you best player.
David ‘Debt is the road the ruin, or at least it used to be before the Glazers gave me a £1.7million salary’ Gill isn’t concerned:
“We have money in the bank so there is zero pressure on that, no pressure at all to sell any star player whether it is Wayne Rooney or X, Y or Z. I can categorically say that. I can’t speak for any other club but the United fans should not be concerned. We have a long-term financing structure in place, excellent revenues that are growing, we are controlling our costs – total wages are 46% of turnover – and we can afford the interest on our long-term finance.”
Which is all true, of course. The context in which Gill puts the words “United fans should not be concerned”, however, relates to the plight of other clubs. Basically, he’s saying that United aren’t Liverpool, and won’t have to worry about administration. Again, true. But United fans should be concerned. We should be concerned about already-ludicrous ticket prices increasing, in order to keep up with interest payments. We should worry about the futures of our best players. We should worry about Fergie taking massive punts on unproven kids he’s never seen play before, rather than the World Cup star he’d been linked with all summer. Just because we’re not languishing in the relegation zone, facing administration, doesn’t mean everything’s OK.
So, Mr. Gill. United fans shouldn’t be concerned? You couldn’t be more wrong.
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