Your now thinking this is going to be about how Manchester United should have spent big money to compete with other clubs and next your going to think I am going to ramble on about how we should have. Infact this is the true story not only of past transfer windows but future ones to come. It all starts back in the Summer of 2009, when a certain club called Real Madrid decided to to splash the cash. At the very time I was on the other side of the world in San Francisco, so if anyone was unconnected and shocked by that weeks events it was myself. I went off one morning and found a Starbucks with wireless internet, put the BBC news page up and there it was Kaka had just moved to Madrid. Afew days later I woke up with a text message saying ‘Ronaldos been sold to Madrid’. I never get messages about football news stories, so for this to be sent means its big news. At that time I am thinking. ‘We’ve just built a great squad, we’ve been in two champions league finals, so why the hell are we cutting it up’ I was also thinking something else and this has always stuck in my mind. They’ve told all the season ticket holders as a ploy, just days before the renewal deadline ‘Ronaldo would not be sold’, all just to sell season tickets, then just after it our best player & the best player in the World is sold off. So I get back to Manchester afew days later and the world to me has gone totally nuts.
This is where the business side of the story comes in. All the figures given are true straight from United’s official accounts. In June 2009 United sold Ronaldo in a £80m deal. In January 2010 it was also reported United had already been paid £35.9m from AON from the new £80m sponsorship deal. This shows up on past accounts. So those two big payments of money are around £116m. In May United was to have reported £95m in cash in the bank, later on it was £162m, and the latest now is £151m in cash in the bank. At this point everything sounds brilliant £150m in the bank, happy days. The problem is of the £80m in the sponsorship deal United have already received £47m. When you add the Ronaldo money to this that’s £127m of £151m cash in the bank. If you are reading that like I am, without the two AON payments and without Ronaldo money since June 2009 the club has only been able to create extra £24m or £35.8m in cash if you take out 2010s payment. To me that’s pretty worrying. With all the prize money, TV money, extra sponsorship deals and increased ticket prices, it shows there is a very good reason why the club hasn’t seen alot of movement in the transfer market. This is not to say the market isn’t over valued, in areas it is. Some of the figures that have been paid out for certain players by City, Chelsea, Villa and Liverpool have been very silly. The reason Manchester United haven’t been out and got a £20-30m player isn’t because they can’t, its because if they do that money is then gone and to recoup that money could in theory take 12-18 months or longer just to get back £30m. One other area shows that at one stage cash reserves reached £162m but then dropped by £12m, so this shows any budget changes or increased costs within the club could have a big effect. The biggest problem I see is if United went out and spent £115m tomorrow on either the stadium or the team, there is only a £35m gap for the budget to be increased, once over that you need an overdraft or you need to find another source of income quick. Remember this is football and alot can happen in a short space of time. This to me is alot more shocking and alot more worrying than any debt and the problem in part is the debt. If United removed the interest payments that gap goes from £35m to £80m. Now I am pretty sure if that was the case, the club would have more access to the transfer market and there would be more value. The fact is until that £45m interest payment is removed and the Government recommends we get a share in our clubs, we are unlikely to see any increase in transfer spending outside of the Ronaldo money at Manchester United in years to come. When the Ronaldo Money is spent, that’s it, that’s the reason it’s not been touched and it won’t be touched.
Love United Hate Glazer
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