The idea of financial fair play rules in European football has long been a dividing subject in the game, roughly split into a couple of camps: Those who think spending had to be reeled in and those who believe the regulations were only introduced to protect the cartel at the top of the game.
It should certainly have made it harder for Manchester City to climb to the very top and the latest measures are making life a little more difficult for Newcastle since they were taken over by Saudi Arabia’s Public Investment Fund (PIF).
But it’s hard to disagree that something seems a little out of kilter when owners trying to throw money into a club are halted, while the Glazer family can pile debt onto United and never put a penny of their own money in without raising so much as an eyebrow at the headquarters of UEFA and the Premier League.
In introducing new cost control rules last April, UEFA pointed out the “extraordinary improvement” in the finances of clubs since financial regulations were first introduced in June 2010. The new measures involve a cap on losses over a three-year period and a squad cost rule that aims to restrict spending.
When it takes full effect in 2025/26 that will mean only 70% of revenue can be spent on player and coach wages, transfers, and agent fees. It’s clearly a rule that will benefit the clubs at the very top of the food chain.
Really, this should be an opportunity for United, rather than a threat. But in this transfer window, the club are telling intermediaries and other clubs that they are treading a fine line with FFP. The exact reason why, beyond using it as something of a negotiating tactic, is unclear.
The fact United owe a substantial amount in transfer fees might be part of the explanation, while the losses during the pandemic are also in the equation. Last summer’s over-budget spend of £225million on transfers also comes into it.
But if United can get their house in order, most probably after a takeover, then FFP really should benefit them. You only need to look at the latest financial results this week to understand that.
For starters, the wages-to-turnover ratio is now 50%, down from 67% last season, thanks to the departure of Cristiano Ronaldo. That is a healthy ratio and leaves plenty of room to also comply with UEFA demands.
Revenues are also on the rise. In releasing their results for the three months to March 31, 2023, United predicted a year of record revenues at £630 to £640million. Even more encouragingly, that is in a season when they played in the Europa League. It should make 2023/24 an even bigger year for revenue, given their return to the Champions League.
For comparison, United made £582.3million in revenue in 2021/22. The figures have been gradually on the rise again and this season should return to pre-pandemic level. United’s highest revenue to date came in 2018/19, when they made £627.1million.
United’s revenue is consistently among the four or five highest in Europe and there should be room for further growth. They would expect to be in the top three for that category. Given the money the club continues to make, a financial system that focuses what you can spend on revenues really should be benefitting United, rather than hindering them.
Arsenal are proof of what can be done. They look like taking their spending to around £200million before the start of pre-season, with Kai Havertz having already joined from Chelsea and Declan Rice and Jurrien Timber likely to follow.
By contrast, United are trying to operate with a budget of around £100-£120million this summer, topped up by sales. That isn’t going to give Erik ten Hag the squad he wants.
United have agreed a deal with Chelsea for Mason Mount, but there is also a desire to sign a goalkeeper and a striker. They will need to sell very efficiently to make this window a success.
But under new ownership, with their finances in order and investment forthcoming, United really should be taking advantage of FFP rather than worrying about it.
Source: Manchester News