Full disclosure: when it comes to finances and football, it mostly goes over my head. Moving on anyway...
However, I do understand that Manchester United's revenue is relatively massive but so is the club's debt due to the nature of the Glazer's model of ownership. Therefore, we simply don't spend money on players that would match our potential buying power. Here's another sobering piece of news: United's bank balance has fell from £150.6m to £50.9 during a recent six-month according to a recent quarterly report. Here are a few other highlights that the linked piece provides:
* During the final six months of 2011, United's revenue of £175m was an increase from the £156m in comparison to the previous year during the same span of time.
* There was a net spend of £47m on transfers during the past summer -- this pertains to bringing Phil Jones, Ashley Young, and David de Gea to the club.
* The Glazers have now spent £92.8m buying back bonds originally released in 2010 for £512m.
* Wages have increased 17.3% when compared to the previous year.
The final paragraph of the linked piece is so sobering that it might make you want to reach for a drink:
"Since the sale of Ronaldo [in June 2009] net transfers [not including Ronaldo] have totalled just £90m while they have taken out of the club £225m to cover their debt payments and interest. What could the club have done with that extra £225m? Cheaper tickets for loyal fans, investing massively in the squad and stadium, developing and retaining the best youth players, competing on an equal basis with the very best teams in Europe. This is the true cost to Manchester United of the Glazers' ownership."
- Manchester United Supporters' Trust
After United's exit from the UEFA Champions League in December, the Guardian's Daniel Taylor wrote this piece hinting at United's financial vulnerability. It also had this cold fact on United's net-spending on players during the past five years:
"The truth they do not want you to know at Old Trafford is that in the past five years United's net spend on transfers is a mere £56.9m. Or, to put it another way, less than Aston Villa, with £68.2m, Sunderland's £62.7m and Stoke City's £61.2m. Manchester City have spent £437.1m, Chelsea £144.9m, Liverpool £84m and Tottenham Hotspur £76m. Many will point out the £50m transfer splurge on Phil Jones, Ashley Young and David de Gea as evidence that the Glazers are not as frugal as portrayed. But even this is not as straightforward as it seems. Ferguson has said himself that the new arrivals were funded because of the considerable savings made from releasing Paul Scholes, Gary Neville, Edwin van der Sar and Owen Hargreaves, each of whom earned around £4m a year. United also made around £10m by selling John O'Shea, Wes Brown and Gabriel Obertan, along with a couple of reserve players, Corry Evans and Joe Dudgeon."
Yes, you really did read that correctly. We really have spent less than Stoke, Villa, and Sunderland :(
Like I mentioned earlier, I am certainly no expert on this topic. If you want more in-depth analysis on United's finances, then the excellent blog The Swiss Ramble has you covered in regards to the business of football. This link is for everything specifically written on United by him and it goes into thorough detail on the club's finances.
Your thoughts on United's latest quarterly report? Your thought's on United's finances in general? As always, feel free to share your feelings in the comments below or it fancies you, we encourage you to write out your thoughts in a detailed 'FanPost'.