Luke Gethin
2.2K posts
Peter Reid when he got home
Sartorial Thug 🍸@SartorialThug
When you're meeting the deputy PM at 13.00 but got a northern soul all nighter at Wigan Casino at 19.00.
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PLEASE HELP: my grandpa got into my stash of Sydney’s Bathwater Bliss bars
Pop Base@PopBase
Sydney Sweeney is selling 5,000 bars of soap that contain drops of her own bathwater, in collaboration with Dr. Squatch.
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🔄 A new era begins.
Same mission. Sharper focus. Bigger vision.
We’ve evolved - because standing still was never an option.
Stay tuned. 🚀
#Rebrand #NextLevel #StayFocused
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Sorry Chris, but nothing will ever beat this.
Hibsprogrammes@hibsprogrammes
Coldplay singing Sunshine on leith 🎵
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BEAST GAME EPISODE 3 IS OUT NOW!
To celebrate, I'm giving away $100,000 total to 10 random people who like and retweet this post!
Go watch it here: amazon.com/beastgames
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🇺🇸 Here’s a crazy stat: Only 1 in 25,000 men over 35 have a visible six-pack.
That’s just 40 out of 1 million.
In a city like Austin, Texas, that means
only 40 men with abs.
Now picture New York City with 8.5
million people — only 340 men would
have abs.
Let that sink in.
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Summer Window Update 10# by SwedishRumble
Financial update! Yoro and Zirkzee signed! How much more can MUFC spend? What is the impact of the incomings and outgoings?
🔺The Q3 report is out -- what have we learned? MUFC's financial year runs from 1 July to 30 June. Hence, the 3rd quarter covers 1 January to 31 March. MUFC is the only PL club reporting on a quarterly basis, resulting in that we have much better visibility in relation to Utd than other PL clubs.
There are 3 different 'FFP rules', UEFA has two and the PL one. The PL's FFP rule (Profit and Sustainability Rule, "PSR") and UEFA's Football Earnings Rule ("FER") are practically identical, with the difference that the PL allows bigger losses. UEFA also has a new Squad Cost Rule ("SCR"), which will become the rule impacting clubs the most. Why doesn't it already? UEFA's rules are new, and they wanted a clean break from Covid, so the FER and SCR are gradually entering into force up until the end of 24/25. This is why MUFC's main concern last season was with the PL's PSR and not UEFA's FFP rules that are more strict than the PL rules.
Both the FER and PSR measures three years periods, meaning that by 30 June 2024, the three year period covering 21/22, 22/23 and 23/24 ended. Since MUFC had the 3rd biggest loss in the PL history in 21/22 -- things were always going to be tight up until 30 June 2024.
One thing is clear from the Q3 report -- any spending in January 2024 would have required some accounting gymnastics or active actions from Ineos, contrary to what I have previously estimated. Why? We knew it would be tight, but in addition to a lot of factors going against the club, the club have so far this season had "Finance costs" of 25m -- in addition -- to paying interest on Glazers debt. 25m is a heck of a lot of money, and mainly stems from re-evaluations of financial instruments the Glazers' (fairly unsuccessfully) have used to hedge the club from the GBP losing value against the USD and adjustments for other accounting measures.
By my estimates, we will pass all FFP rules, but it is contingent on the club being able to deduct a large portion of the £40m costs for the Strategic Review resulting in Ratcliffe becoming a shareholder of the club. If we breached FFP rules last season, we won't know about it before the spring of 2025.
🔺With 30 June 2024 in the rear mirror, how do we find out how much MUFC can spend this summer?
What we spend this summer, will impact the club's financials for the 24/25 financial year (and consequently, if we spend too much this summer, we will get a sanction in the spring 2026).
So in relation to UEFA's FER and the PL's PSR -- we will be measured on the basis of seasons 22/23, 23/24 and 24/25. And in relation to UEFA's Squad Cost Rule -- which is measured on a calendar year basis, we will be measured for the calendar year 2024 and 2025.
To determine how much we can spend this summer -- we must in other words make a forecast for 24/25. How is this done? A football club's financials are fairly stable year to year, what mainly changes are the performance related TV money, wages for players and amortization of paid transfer fees. Can we make a forecast for these items? Yes, a fairly reliable forecast can be made. But what about a new stadium etc? Any costs for infrastructure is seen as a "healthy cost" in the perspective of FFP -- so they don't impact the FFP calculations.
We know that we will play in the Europa League instead of the CL and what that means, we know our wages for 23/24 and can adjust them for players leaving and being signed and the same applies for amortization. So lets jump into it.
🔺The financial forecast for the 24/25 season
⚽️1. Performance related income
MUFC's income from the PL dropped about 14m, from 165m to 151m due to finish 8th instead of 3rd. Just to have some margins, I count on £160m from the PL next season.
We made £37m making it to the QF in Europa League in 22/23, which rose to £60m last season due to the CL (Arsenal made north of 80m going further than us, which should be some kind of benchmark for the CL). With 2 more EL games being played, I am counting on £41m for 24/25.
Match-day is also performance related, in the sense that we make about 5.2m per home game. The further we go, the more home games we have. We had an extreme amount of home games in 22/23 making the final in both domestic cups with all but one of the lottery draws going our way IIRC and making the QF in Europe after a play-in, resulting in a total match-day revenue of £136.4m. But 23/24 will not be bad either, and by my calculations we increased prices a fair deal, resulting in 5.8m per home game in the 3rd quarter. Hence I estimate that our match day revenue will be 133m for 23/24 (it was 104.5m up until 30 March and we had 5 homegames plus the FAC final in Q4) and with a 5% increase in ticket prices, I am estimating 135m for 24/25.
⚽️2. Commercial income
From 22/23, two major adjustments are made for 23/24 -- with the renewal of the Adidas deal -- and for 24/25, with the 13m bump from the Snapdragon deal bringining us from 47m from TeamViewer to 60m with Snapdragon.
⚽️3. Wages
MUFC employs over 1,000 people in total, for which our total cost in 22/23 was 331.4m, which is expected to rise with 7% for 23/24.
Why did our wages rise for 23/24? Due to playing in the CL. Wages were reduced with app. 17% due to missing the CL in 22/23, and it is expected that existing contracts increase with 20% for 22/23. But in addition to this, we kept working on our massive reduction of the wage bill that have been ongoing after 21/22 -- with DDG (19.5m/y), Tuanzebe (2.6m), Phil Jones (3.9m), Fred (6,24m), Elanga (0.47m), Bailly (4.6m), Telles (4.8m) and Henderson (5.2m) for a total of 47.3m leaving and only 19.5m coming in for the new signings Onana (5.2m), Rasmus (3.9m) and Mount (10.4m) -- for a net reduction of the £28m. It is not so simple that we just can add these up, because we also renewed a lot of contracts, didn't pay full wages to players loaned out, and paid wages to Amrabat and Regulion. But all in all, the wage bill de facto rose 7% for 23/24.
So what will happen for 24/25? This is where it starts to get exciting (🧨)-- because our slaughter of our record wage bill of 8384m in 21/22 is continuing. The following contracts are off the books for a total of 56.7m (!!!): Varane (17.68m), B Williams (2.8m), Donny (6.2m), Greenwood (3.9m), Martial (13m), Regulion (4.5m) and Amrabat (8.5m).
This would mean that our wage bill would drop from 354m to 297m before new signings, if we still played in the CL. But since we aren't, I am counting on another 17% reduction, to 246.8m (before signings).
With Joshua Zirkzee (5.46m) and Leny Yoro (knocking wood, 5.8m), our wage bill would currently be at £258m. That is a reduction of 126m from 21/22, which is 8 x Rashford's wages of the wage bill.
⚽️4. Amortization
While we have paid much less in wages, we have paid more in transfer fees. But first, what is "amortization". For accounts to be useful, the value of assets that doesn't have eternal value must be written down. When an asset is tangible, its called depreciation. When its an intangible asset, its called amortization. A club doesn't have players on the balance sheet, but the 'registration right' (right to register a player to play for MUFC in club football) is an intangible asset. When the player is bought, he is recorded on the balance sheet at a value equal to the price paid for the player. That value is then written down in a straight line over the term of the conrtact. The lost value is an accounting loss.
MUFC's total amortization cost rose from 172.7m in 22/23 to 189m in 23/24.
What will happen in 24/25? If we bought a player 5 years ago and gave him a 5 year deal, his amortization charge is now off the books. The same of course applies of a player is sold. Varane (14m), AWB (9m), Garnacho (0.105m), Pellestri (1.8m) and Donny (7m) for a total of £32m while Zirkzee (7.146m) and Yoro (8.408m) for a total of 15.5m are added. -- with a total of 16.3m saving for 24/25.
So I estimate that our amortization cost -- before any more sales or acquisitions -- will be £172.65m for 24/25.
⚽️5. Profit/loss on player sales
Lastly, for the forecast, we will cover the profit/loss we make on player sales.
Donny had a remaining book value of 7m, and was sold for 400k. This means that we will make a loss of 6.6m on player trading on his sale.
As a homegrown player, the entire £23.3m transfer fee for Greenwood is pure profit and so is the £8.41m we received for Kambwala.
Hence, we are currently plus £24,71m on player trading.
⚽️6. Other expenses/Exceptional items
Lastly, MUFC had app. 40m in exceptional items relating to the strategic review. I can't really understand how none of these costs are kept away from the income statement (costs for share issues normally doesn't impact the P/L) -- but since they are on it, I cannot see how they can be deductible. This brings 'other expenses' up from 177m in 22/23 to 209.7m in 23/24. With no exceptional items for 24/25, I estimate this item to be reduced to 169m.
🔺How much FFP space do MUFC have?
⚽️The FFP rules excludes certain healthy costs, which in summary are investments in infrastructure, academy, womens team and charity/community work.
So what are MUFC's "healthy costs"? Teams generally do not report how big these costs are, MUFC don't. So we can only guess how big they are. I can't estimate it at all, but real experts who communicate with teams and got connections they can sound out uses figures around 10-15m for academy, 1-2m for womens team and perhaps a 1m for charity etc -- for the bigger PL teams. These numbers are estimates, but coming from Swiss Ramble and Kieran Maguire and co, who have 'watched this space' for 5-10 years, information leaks out, all of a sudden a CEO tells someone in an interview what the cost is for their academy or whatever.
But Aston Villa recently released numbers exceeding those figures by a significant amount, instead of being in the total range of 15-17m, they had healthy expenses of a total of 22m (excluding infrastructure investments which of course are more concrete). And in terms of total expenses excluding wages and amortization, MUFC is about 2.5x as big as Villa.
For this reason, I have increased the estimates for MUFC's 'healthy costs', excluding infrastructure, from 20m in total to 28m.
⚽️PL's PSR -- 105m threshold
In light of the above, this is where MUFC stand in relation to the PL's PSR rule. Remember, this is the most lenient rule, and it was only due to UEFA's transitional provisions for its new rules that MUFC was close to breaching the PL's FFP rule last season but not UEFA's rules.
With the record loss from 21/22 off the books, massively reduced wage bill and amortization charges, MUFC's total PSR calculation would for the three year measure period, would be plus 63.219m while a minus result of 105m would be accepted. So the club's costs could be increased with 168m for 24/25, to get to the limit.
What does that mean in terms of transfer budget? If MUFC signs a 100m transfer fee player to a 5 year 300k a week contract, the yearly cost for this player is 100/5=20m in amortization charges and app. 15m a year in wages, for a total of 35m. So MUFC could basically sign almost 5 players for 100m and still not breach PL's FFP rule.
In contrast, by my estimates, the FFP space for last season was only 4m under the PL's PSR.
⚽️UEFA's FER -- €60m threshold
UEFA's FER is basically identical to the PL's PSR, but the threshold is €60m instead of £105m.
Consequently, costs could be increased with another 123m, which should equal app. £350m of spending (without any more sales).
⚽️UEFA's Squad Cost Rule -- 80% threshold for calendar year 2024 and 70% for calendar year 2025
The limiting "FFP Rule" will be UEFA's SCR going forward for almost all clubs.
Given that MUFC's exceptional items costs were so large, what we can spend this summer is basically the same under the FER as the SCR, because these costs don't impact the later. Hence, MUFC could spend app. 340m under the SCR rule this summer. But it is important to remember that what we spend this summer of course impact what we can spend next summer. Another way to look at it is that if we don't make any sales -- we could spend app. 430m in total in the summer of 24' and 25', or 215m per summer. Any player sales significantly increase that number.
⚽️FFP -- Summary
So even if MUFC don't sell any CB and Sancho as well as Pellestri, Hannibal and co are kept -- the club could easily spend 250-300m this summer. The club was tight against FFP rules last season, but with a massive reduction of wages and the record loss from 21/22 being off the books -- things look a lot better.
This shouldn't be that surprising, if Chelsea can spend 1bn, MUFC's 300m isn't out of this world.
🔺So nothing is stopping MUFC from spending 250m-300m?
The above is what MUFC -- could -- spend, without getting fined by UEFA and the PL. A club like Tottenham could spend a ton -- but never does, because it doesn't have that money on a bank account.
Due to the allowance of healthy costs, a club can always live a bit over its means.
With a debt closer to a £1bn, MUFC needs further contributions from Ratcliffe to spend to the maximum of what it can under FFP rules. That must be in the books, but it seems like Ineos want to balance the books better.
To do that, we must permanently reduce costs while we increase income -- which must be done by the club being more successful in the CL.
Without any more sales, we can increase costs of around 40-50m by my calculations -- in order to have the same 67m on the bank account in a year, that we have now (excluding the new infrastructure investments). This would mean around £100-150m of purchases this summer, before any more sales.
Maybe it is wise to not splash too much cash before the squad is better balanced. OTOH, missing the CL is massively costly, and MUFC can't keep doing it. So there is a big risk in under investing in the squad. It is especially important to keep a good track on what the clubs around us, but also in Europe, are doing. Money is a requirement for success in football, and City's wage bill is -- significantly -- larger than MUFC's going forward. Could even be twice as big if City pulls of another CL win.
Ratcliffe cannot expect the 200m investment to be enough to get MUFC back on track with the club's debt being what it is.
🔺So how much -- will -- MUFC spend in the summer of 2024?
It is of course the million dollar question, but I think that one thing is clear -- the ability to spend is there. I think how much we spend will depend on the opportunities to spend wisely.
If deals don't make sense, we could end up at 150m, but if we can sell 2-3 more players, and we can get good deals done, I see no reason why we couldn't spend 250m.
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This is Andrew Huberman.
His health advice has helped millions of people 10x their energy and mental clarity.
I've spent 3 years studying his work.
Here are the top 5 habits I've learned from Dr. Huberman:
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Win a round for 2 at the no. 1 golf course in Wales! For a chance to win, simply like this post and tag the friend you would definitely get the better of on the Links! Entries close at Midnight on Sunday 14th April. The winner will be announced on Monday 15th April, good luck!
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