00:00 Hello everybody, Adam here again from 4-4-2 now Manchester United are out of the Champions
00:11 League. Would that have been a surprise at the start of the season given the group they
00:14 were in? Yes. Was it after what happened in Copenhagen and Istanbul? No, because they
00:20 had to beat Bayern Munich and of course they didn't. So, yeah, things aren't looking
00:25 good at Old Trafford are they?
00:27 However, there is something else that has arisen because of Manchester United's exit
00:31 from the Champions League. So, if you cash your mind back to the summer, you wait for
00:35 actually fine Manchester United 300,000 euros for breaching financial fair play regulations
00:41 over a four year period from 2019 to 2022 and recently Manchester United's debt has
00:48 surpassed the one billion mark and they're having a bit of touch and go misdemeanours
00:54 with FFP as well in general. Now, this is a cause for concern given the exit in the
00:59 Champions League.
01:00 So, of course, United will now be playing domestic football only for the remainder of
01:04 the season and with Jim Ratcliffe coming in for that 25% shareholder ownership of the
01:08 club, they're in a bit of a financial transitional phase and they really could have done with
01:13 the added revenue from getting through the group stage and perhaps beyond or even just
01:17 getting into the Europa League. But no, their losses have been completely cut and they could
01:21 have made a whole lot more to help supplement both the wage bill and just the financial
01:25 integrity and structure of the club. So, let's break the numbers down. Every single team
01:31 earns 13.3 million quid for just getting to the Champions League group stages and qualifying
01:35 alone and then for the one win and one draw that Manchester United got in the group this
01:39 season that added an extra 3.2 million in tournament winnings as well on top of that,
01:45 which in the grand scheme is not a lot because... So, they would have got an extra 8.25 million
01:51 had they escaped the group miraculously somehow and then if they'd have gone even further
01:55 and got to the quarterfinals that would have been an extra 9.1 million on top of that and
02:00 then an extra 10.7 million for getting to the semi-finals as well. So, a lot of money
02:05 missed out on for Manchester United. And just an additional little figure as well, not one
02:09 that really concerns Manchester United because they would have never won the Champions League,
02:12 but if you do win the Champions League you get 58.6 million in prize money on top of
02:18 that, which is a whole transfer fee for a big player. I say a big player, he's gone
02:23 for 50 million recently. Fred, Fred went for it. He could have got him another Fred if
02:27 they'd have won it. Now, of course, it was absolutely obvious, wasn't it, that Eric
02:31 ten Haag didn't really have the funds at his disposal, if some of it he'd have perhaps
02:34 liked. You look at Johnny Evans coming in on a free transfer to try and bolster the
02:38 squad but really he came in on a free. Then Amr Abat as well who you would assume United
02:43 probably wanted on a permanent transfer but ended up having to cut their losses and pay
02:47 8.5 million this season to have him on a one-year loan with an option to extend or buy him permanently
02:53 next year which will probably cost in the range of 20 million. That's not a setting
02:56 stone yet but really having to penny pinch just to get certain players that they want
03:01 and they can't really, they've got no financial muscle in the market as it stands. Of course,
03:06 in the summer as well Manchester United brought in Mason Mount and Andre Onana for pretty,
03:10 pretty big fees and it says here in this Athletic article that "Every prospective deal has
03:14 had to go through what one of the club figures calls the 'financial sausage machine'.
03:19 Everything is being calculated. Is that okay on FFP? Does it leave us enough room to do
03:23 what we want this summer on players?" But given the fact that they've now missed out
03:27 on the prize money from getting through the group stage, you're probably going to assume
03:32 that ten Haag's going to have a similar conundrum in January as well because an extra sort of
03:36 15 or so million on top of his transfer funds would have really helped to at least try and
03:40 get him something if he wanted to bring someone in to bolster the squad. I'm not necessarily
03:44 saying he does want to bring someone in in January but you'd assume if he wanted to
03:47 he'd need a bit of dough because there isn't much knocking about at Manchester United at
03:52 the moment. Now, according to numerous reports such as
03:55 the Athletic, United are slightly concerned by FFP and the fine that was of course issued
03:59 in the summer but there's no immediate pressure for the club to drum up funds through player
04:03 sales. That is what the reports are saying. However, I think there's evidence to the contrary.
04:09 If you actually look at the players that Eric ten Haag has tried to offload or has successfully
04:13 offloaded in the 18 months that he's been here, you look at Cristiano Ronaldo, David
04:17 De Gea, Paul Pogba, Fred, the likes of these players which were on extremely, extremely
04:22 high wage bills and now there's also murmurings that Rafa Varane might be on the way out too
04:27 after apparently falling out with ten Haag but he is also on a preposterous amount of
04:31 money. It seems to me like Eric ten Haag is trying to offload these high wage bill players
04:35 and perhaps the deadwood and fringe players in the squad to give himself and Manchester
04:39 United more flexibility with FFP because right now everything is very, very stringent.
04:44 So what is all the beef between FFP and Manchester United? Well, Manchester United lost a total
04:50 amount over the pandemic of £234 million in COVID related losses between 2019 and 2021.
04:58 Now in 2022 there was a monitoring period for UEFA that surveyed all the top level clubs
05:04 to see what losses they were making and how they were adjusting for these losses and United's
05:08 stance was that they were unable to adjust for the £47 million of COVID losses in that
05:14 2022 monitoring period because of an unforeseen change in how UEFA treated those losses during
05:20 the transition to its revised financial sustainability regulatory framework.
05:25 So United's stance is that UEFA changed this regulatory framework and this surveying of
05:29 all the teams that they like to do with too short notice for them to be able to adjust
05:33 their losses and the £47 million loss in this case. So what they've had to do United
05:37 is make cut losses basically to other departments of the club. So the youth infrastructure, the
05:42 women's team for example and also to things like community work as well which is quite
05:46 sad really because that's so integral to every football club in England really, especially
05:50 the top ones, you know, the sense of community that that brings having to make cuts in those
05:54 departments is quite a sad state of affairs truth be told. It's believed now that the
05:59 club are actually going to deduct between £50 and £60 million in these three areas
06:03 so the foundations, the youth development and also the women's team as well.
06:07 So it seems like United are chasing their own tails really in terms of trying to fix
06:11 this financial situation and what season did it really go wrong? Well the reading here
06:16 states that it's probably 21/22 when they failed to qualify for the top four that season.
06:21 Now of course we all know that the Glazers have never invested any of their own money
06:25 into Manchester United since taking them over in 2005 and to quote them that is for the
06:30 purposes of profitability and sustainability. So no money of their own has gone into the
06:35 club, we know this. But what this means is that United's losses have not been able
06:39 to exceed the standard £15 million limit. Yet this only became an issue when a miserable
06:45 21/22 season on the pitch was just as miserable off it. United posted a pre-tax loss of £150
06:51 million, which is by far the biggest loss over the preceding decade.
06:57 So after this pre-tax £150 million loss in 2022 United have really, really had to strike
07:03 a fine balance financially and what they actually did after Manchester United didn't get into
07:07 the top four that season was reduce the wages of the whole squad by 25%. This of course
07:13 is now lifted because Eric Ten Hag actually secured Champions League football last season
07:17 but without this added revenue given from getting through the groups and advancing further
07:22 into the tournament they're now having to still pay out this huge, huge wage bill that
07:26 they didn't have to a year ago having not had the prize money to kind of help supplement
07:31 it. So everything is very, very stringent for Manchester United financially at the moment
07:36 and this is one element of the problems at the club right now.
07:40 So what will actually happen to Manchester United financially and will they be able to
07:43 avoid exceeding a breach and then obviously being punished for it? Well, United will have
07:48 a reasonable idea because in the coming months publication of the club's full accounts
07:52 are expected to land. So I guess we'll have to wait till then, but they will know behind
07:57 the scenes whether there's a breach coming their way or whether they were spent within
08:01 check.
08:02 And moving forward for United, well it actually says here, even if United have successfully
08:06 avoided a breach for 2022/2023, the club still faces a challenge to stay on the right side
08:12 of the limit this season right now. Crucially, the next three year monitoring period will
08:17 not include the COVID-19 adjustments, but United's huge 2021/22 pre-tax loss, which
08:23 was of course £150m, will still be part of the equation, hence the need to tread carefully
08:28 in the market this summer and the summers moving forward.
08:31 And as for any punishments, well clubs who exceed the lower £15m profitability and sustainability
08:36 limit without secure funding to cover their losses can have budgets limited and transfer
08:41 spending restricted by the league's board to ensure they meet their financial obligations.
08:47 So there we go, that is just one problem at Manchester United at the moment. I'm sure
08:52 me and Adam are going to have plenty of time after the weekend to talk about the other
08:55 £50m if Liverpool do what I think most of us expect them to do, but you never know in
09:00 the Premier League do you? We shall see, but it's just the problems are piling up over
09:05 on the red half of Manchester, particularly for Eric ten Haag who at the moment must be
09:11 so stressed.
09:12 Anyway guys, yes you can let me know in the comments what you think the future holds for
09:15 Manchester United. Do you think they'll be able to continue spending like they have done
09:18 in previous years based on the evidence here? It doesn't really look like it even with Jim
09:23 Ratcliffe coming in with that 25% ownership, but you can let me know what you think. Do
09:27 not forget to subscribe guys, hope you have a lovely, lovely day. I've been Adam Monk,
09:31 goodbye.
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