Sir Jim’ll fix it. Or can he?
- The Random Pundit
- Mar 14
- 35 min read
Manchester United (ManU) have been on a voyage of discovery since Sir Alex Ferguson left the club at the end of the 2012/13 season, parting ways with a final gift of yet another league trophy, and many would say that they have encountered increasingly choppier waters the further away from 2013 they have travelled.
Since then, ManU fans have seen permanent managers in the form Moyes, van Gaal, Mourinho, Solskjaer, Rangnick (although interim, he was in charge for the majority of a season) and ten Haag being told to ‘walk the plank’, with Amorim now at the helm.
Giving context to the job Ferguson did was that in his last 8 years, ManU won the league 5 times and finished 2nd the other 3 times. Since then they have been 2nd twice, 3rd twice and the other years they finished between 4th and 8th. So the fall off is not crippling as this has still provided consistent European competition, but only making the Champions League in roughly half those years has not only dented fans’ pride but also the cash flow and profitability of the business. Couple this with 8th last year being the lowest they have finished since the 1989/90 season, there was a sense of impending doom and further spiralling downward.
Enter Sir Jim Radcliffe, saviour of ManU.
He came in with a 27.7% stake in the club in December 2023 (February 2024 was when the deal was completed) and it was logical that he would need time to right the ship so the 8th place was not pinned on him and his new team. So would 8th be the lowest ebb for the club? Evidence thus far this season indicates that the problems at the club are far deeper than some fans would have hoped, with ManU sitting in 14th place after 28 games, with 34 points and a goal difference of -6.
So I thought it would be interesting to take each segment of the Sir Jim interview (45 minutes long) and fact check it and provide some insights. We can then come onto some areas that seem to be unspoken and what does this all mean for the future of ManU.
Given my background as Fellow of the Institute of Chartered Accountants of England & Wales, and also with over 2 decades at the largest global institution of its type looking at company finances, operations, governance and other matters, I feel I am in an experienced place to make insights on much of what Sir Jim is saying and how it stacks up (without being privy to the inner workings of ManU). So I have also given my own TRP Confidence rating for each segment on how much I believe what he is saying and how much it reflects strong leadership to get ManU back to the top.
I have put in time markers so you can load the interview and see Sir Jim’s mannerisms as you read this:
It is also a long piece as the interview was long and there is lots to analyse about the club, so please feel free to jump to the sections that interest you:
Introduction and Initial Thoughts (0min:0secs) & Scrutiny and Challenge (1min:10secs)
TRP confidence rating: 3/10
Sir Jim says that he finds the level of scrutiny being larger than anticipated from the press. This in itself is a worrying start to the interview as it does indicate he really does not understand the full world of football, and the level of press scrutiny in the UK is far less than in some European countries.
Saying that he says he did not expect to win the league in a year shows that fact that he is based in some form of reality, but naïve is the opening impression gained.
He states that since Sir Alex left, if fans have not liked the situation, then they have to expect change at the club. I am pretty sure the fans want change, it is then about how he is going about it, which we will come onto.
Understanding Fan Frustration (2:20)
TRP Confidence rating: 4/10
He understands the fans are frustrated with the performance of the team, but cites the ‘fact’ that Amorim is working with half a squad at the moment. If we ignore the players out on loan (even though that was the club's choice and should not be an excuse) then at the time of the last game week:
GK – 1st choice fit (2 of 6 injured)
Defenders – 4 of 9 senior players are injured
Midfielders – 4 of 8 senior players are injured (2 of 6 if you exclude Amad and Mainoo as senior)
Forwards – no injuries
So it being half a squad injured is a stretch, but they do have material injuries in defence and midfield.
However, it should be noted that, if you include Amad and Mainoo as senior players, they are running a senior squad of 20 outfield players. For context, Manchester City have run into their own issues with their squad being too small at 21 outfield players (including Lewis and McAtee). So this is partly an own goal by the club, not just poor luck with injuries.
As a quick reminder, a club can register up to 25 senior players, which usually include 2-3 senior goalkeepers. So this usually leaves 22-23 places for outfield players. The key is that U21 players (the rule is about a specific date of birth each season) do not count. So Amad, Mainoo, Lewis, and McAtee all do not count towards the 25. So both clubs have chosen to be 4-5 senior players short of their maximum allowed, maybe to give their Academy players a chance? But you can’t then use it as an excuse as well if things are not going well. We know Pep has held his hand up to say he owned the mistake of not bringing in more bodies. Who is owning it at ManU?
Evaluating Team Performance (2:52)
TRP Confidence rating: 3/10
Sir Jim says that under ten Haag the team were erratic, really turning up for the FA Cup final vs Manchester City but they didn’t have the same desire in other games (like vs Crystal Palace in the league). But he believes under Amorim, and a difficult start, there is progress. He points to players brought in over the summer now settling in and performing.
Ten Haag’s league record was 1.72 points per game, but Amorim’ league record is 1.12 points per game. Per Sir Jim’s comments, if we look at the last 6 games (a good blend of opposition), when summer players should have bedded in by, that gives 1.33 points per game. So still not empirically as good as ten Haag, although a small improvement from that ‘difficult start’.
The eye test indicates that there is a lack of drive and ownership on the pitch other than their captain Fernandes, who game after game is the spark that rescues them. That is evident still in the last few games, so it seems that inconsistent desire has not been fixed by Amorim, as Sir Jim claims.
He points to the fact that Zirkzee was ‘getting knocked about’ in the 1st half vs Arsenal, something ‘he would not be used to having played in the Italian league’. This is concerning on two counts. The first is that if you know that about the Italian league, surely you scout the physicality of a forward before you sign them. Secondly, he has now been at the club for 8 months, so he should be adapting to a degree by now, although physicality can take time. This is one of the players signed under Sir Jim in the summer.
Challenges and Progress (3:57)
TRP Confidence rating: 2/10
Sir Jim again references that half the squad is unavailable and they have a bench of youth players who have not played for the senior team before. See my comments in Understanding Fan Frustration above regarding an undersized senior squad.
He then states that half of their 8 highest paid players are not available to Amorim and if you did that to Liverpool or Manchester City, they would be struggling.
Their top 9 paid players (3 are tied at the end) are: Casemiro (available), Rashford (loaned), Fernandes (available), Mount (injured), de Ligt (available), Maguire (available), Sancho (loaned), Shaw (injured), Eriksen (available).
So 5 are available, 2 are injured and 2 are loaned (the club’s own choice). So you could you could stretch to say what Sir Jim says is about right, but in reality, it is not. Loaned players they chose to send out cannot be used as an excuse, especially as this was planned (not like injuries), so in reality, excluding them, brings Mazraoui into the top 8 and gives only a 25% injury rate of the top 8 paid players.
He firmly believes he saw a spark in the second half vs Arsenal of a tactical plan and also high desire from players. You have to question why was it only the second half? But this might be a turning point. But you have to ask: Why suddenly has this changed? What is different? He does not expand and I can’t see why suddenly things will change materially this season.
Recruitment and Management Decisions (5:13)
TRP Confidence rating: 2/10
Sir Jim starts by saying that he believes the summer recruitment will ‘come good’. But he then immediately caveats that they did not have the luxury of time in recruitment as many of his team came in days/weeks before the summer. But he was involved from December, two months before the deal was completed, so MUST have known these decisions were coming, being in charge of all operations. He says they were occupied with the ten Haag keep/fire decision and that ten Haag was involved in the decision-making processes around player recruitment (one of many people inputting) and admits his influence is seen in the influx of Dutch players (de Lijt, Zirkzee and Mazraoui by birth) over the summer.
When it came to the keep/fire decision on ten Haag, Sir Jim says it was too early for them as a team to make that ‘very big’ decision as Jason (Wilcox), Omar (Berrada) and Dave (Brailsford) had only been in their roles for a matter of weeks. But again, Sir Jim knew he was coming in from December, and the manager is possibly the largest decision to get to immediately, so it seems he was woefully ill-prepared, or he did not appreciate the impact of getting the decision wrong.
What does resonate and seems fair on the face of it is when he says that they were not sure if the poor performances were due to the manager or the support structure around him. Was it the manager or the club that were the symptom of the erratic performances? He points out that now Amorim talks to Jason and Omar daily, but they didn’t know what ten Haag had.
But I don’t buy this as I have worked at the highest levels in company restructure and assessment and you should be able to ascertain enough information about a senior person’s support structures in 1-2 weeks. Sir Jim should have been asking these questions from at least February. These, to a professional, sound like excuses.
However, he does admit that the decision to keep ten Haag was a mistake and they are at fault, although claims that there were these mitigations to that decision, so he does get some credit, but not full credit per above.
What I will give to Sir Jim, without knowing anything about the inner workings of the club, is it seems none of the managers have truly returned the club to glory since Sir Alex, so is it really the managers? He now seems to think it was in the case of ten Haag.
On Amorim, he thinks he is doing a ‘remarkably good’ job given the circumstances:
- Coming in mid-season without a preseason
- Inherited a set of players that are not his pick
- Players are not necessarily designed for the way he wants to play
- English is not his natural language
- He has never managed in the Premier League before
- He is managing the largest club in the world
- The pressure at the club is huge
- He is young
The one point that is extremely valid is coming in mid-season. You just need to look at Nottingham Forest and what Nuno Espirito Santo has managed to do with a preseason and the Forest squad, having come in midway through last season when they were battling relegation.
Every manager is going to have the same issue with inheriting players, so this can’t be used as an excuse. You would expect a ‘manager bounce’ rather where players play out of their skin for a few games to impress the new manager.
But picking a manager that runs a different formation to what your players are used to and all the other factors are all things that were known to Sir Jim and the team when they were picking a new manager and they could have picked someone without these challenges.
He then laments again the depleted squad that Amorim has and now tries to explain this in terms of the overall wage bill of players available. He again cites Antony, Sancho and Rashford being out on loan. As stated above, they have the squad space to keep these players, so this cannot be used as an excuse.
If we use www.capology.com to look at base wages (these do not include bonuses etc), they have ManU’s wage bill at just over £170m (and that is taking out players that are also on loan) and the injured players represent roughly £40m of that figure.
He then says that Liverpool’s and Manchester City’s salary bills are much higher. Liverpool have been pretty lucky with injuries (other than to Allison and Konate mainly) but Manchester City have had their fair share of injuries, so he can’t just compare to the full squad costs but not for his. However, for interest, the site used says that Liverpool’s core salaries are roughly £130m, so even ManU’s injury-depleted squad, and taking into consideration loans they decided to make, is on the same adjusted wage power as Liverpool’s full squad, who are romping away with the league.
So I see these as excuses that have no weight, and that is also being lenient with the treatment of the loaned players.
He then likens the adjusted salary bill to more like ‘a middling to second half of the table team, a Nottingham Forest or an Everton’. This is where he is increasingly out of touch with football and the competition around him. Everton’s core salaries (same source) are roughly £72m (so about half of his injury & loan adjusted figure, and Everton also have key injuries) and Forest’s core salaries are £55m (and they have been without their starting 2 midfielders nearly all season to date).
So if you look at the comparative performance between ManU and Liverpool and Forest with their salary bills (and the salary bills of the teams all around ManU in the table), he really is very off base with his numbers and it seems he is just making excuses.
He then estimates his, Liverpool’s and Manchester City’s salary bills. He says his are £150m, Liverpool’s £200m and Manchester City’s £300m. If we are kind to Sir Jim and apply bonuses at 20% of core salaries, then that lifts Liverpool to roughly £160m and Manchester City to roughly £270m (although they are injury-hit badly as well). So he might be close in his estimations. But we know, roughly, that core salaries are equal between Liverpool's full and ManU’s injury & loan adjusted squad, so if he says Liverpool are ‘at £200m’ then ManU are likely at the same, and he has underestimated his wage bill by a huge 33%.
So the real issue here is the quality of the players that have been bought, and it does indicate then that ManU are overpaying their players for the quality they bring, looking at Liverpool, Forest and Everton. This is also ignoring the players they have ‘banished’ out on loan.
Financial Realities and Tough Decisions (11:06)
TRP Confidence rating: 2/10
Sir Jim does shift around awkwardly when questioned about the quality of the players he inherited and he goes straight onto the fact they are still paying instalments this summer for several players they inherited, citing Antony, Sancho, Hojlund, Casemiro and Onana. When challenged by Gary Neville that there are roughly £390m of outstanding payments for players on the books, Sir Jim holds up his hands honestly to say he doesn’t know the number but does know they have £89m in such payments this summer.
It is good that he knows the short-term cash-call, but not knowing even roughly what is a hugely material number regarding the total transfer fees still due to be paid is somewhat concerning.
When asked if Amorim would be backed in the transfer market with players that fit his system of wingbacks and duel 10s, he said that he would not equivocally say that Amorim would be backed to stay and build, but he equivocally backs his management team of Jason and Omar. However, he confirmed that it was he and those two that decided to hire Amorim.
You do have delegation in jobs in business, but you do not delegate responsibility (a common mistake with executives). This was the first indication of it sounding like he is putting up the beginnings of a responsibility wall between him and his ‘management team’. This does not bode well if it is the case.
Dan Ashworth was then brought up, and Sir Jim asked to not go into the details ‘as it does not serve anyone to do so’ and it was just put down to ‘chemistry’. But as pointed out by Neville, they courted Ashworth, who is highly accomplished, for a long while. When recruiting for senior executive positions, one of the key things you look for is the corporate fit and the chemistry with those that they will have to work with. He admits this was an error, but he tries to mitigate the decision with it would have been worse to just keep him to avoid the press attention. This just deflects from a very costly error of hiring him in the first place.
According to The New York Times, the cost of this error was £4.1m. When this is coupled with removing ten Haag just after giving him a new contract, these errors made by Sir Jim and his team have cost in excess of £15m.
The interview righty then switches straight to the ‘unpopular decisions’ that have been made, such as axing free lunches. Neville really steps up here and tries to drill a few examples into Sir Jim, he only achieves one, but that one illustrates the point very well:
£40,000 per year was paid to the Former Players Association who give their time back to the community and the club (players from the 1960s and 1970’s) have been stopped.
Neville asks why not just run an event with existing players to raise the £40,000 and not axe payments to a hugely cherished part of the club? Or just get the existing players to put in £1,000 each to subsidise it?
Sir Jim said that no one suggested this to him and he would have backed that. As Neville says, this raises huge alarm bells about who is making strategic decisions in the club at the moment (and I would add they seem not to understand the club).
When quizzed if the payments can be reinstated, he says that he can look at it but that he is above that level of detail.
Sir Jim then uses the adage ‘if you look after the pennies, the pounds look after themselves’, which he says is their ethos.
He then does admit they have community responsibilities and the club is part of the community.
Sadly cutting operational costs is not magically going to fix the issues with the squad and recruitment. He needs to be focussing hard on the pounds.
My other insight from this is that they have people making decisions without much knowledge about the club, and what is important to fans and to the community. There appears not to be much senior oversight for what are very sensitive actions being taken. Or even more worrying is that those charged with oversight also do not understand these aspects of the club.
Sir Jim moved on very quickly (see below) but before we do, it is important to look at these ‘little things’ he references indirectly and in aggregation:
Making 250 staff redundant in 2024 would have saved roughly £5m per year (assuming £18,000 per year per person on average, plus employer NICs).
Up to another 200 staff are to be made redundant again this year, which using the same estimates as above would save another £4m per year in wages.
Assuming staff levels of 700 (1,500 less 450 being made redundant) and £4 per meal, 6 times a week for 40 weeks of the year, axing these lunches would save roughly £670,000 annually.
The Christmas presents that were downgraded by £60 each for the 700 staff would save £42,000 annually.
If we assume the staff are going to be made redundant anyway (see below) then if the errors around ten Haag and Ashworth were not made, the Former Players Association, lunches and Christmas bonuses could have been left in place for 20 further years for a neutral cash impact.
Addressing the Club’s Financial Crisis (17:16)
TRP Confidence rating: 6/10
Sir Jim segwayed from the Former Player Association grilling directly into saying that the club has lost money for the last 7 years and has lost £330m over the last 4 years alone.
He says the number of employees has risen to 1,150 (this cannot be verified to 2024 as accounts are not published yet), but looking at the prior year accounts, there were 966 employees in 2023 and 867 in 2022. So he is right that the number of employees has been spiralling upwards.
Liverpool are probably the best benchmark to ManU given comparable annual revenues and longevity of global exposure. Liverpool have just over 1,000 employees in 2022 and 2023.
So although he is right to get spiralling employee numbers under control (if his numbers are correct for 2024), his desire to make a further 200 staff redundant this year, when he has already reduced 1,150 to 900 from last year’s redundancies, seems over and above what Liverpool deem necessary.
Sir Jim then laid bare the core financial issue that he is inheriting, as he sees it. Since 2016, he says the cost base (non-player costs of running the club) has increased by £100m (£170m to £270m), the player salary costs also increased by £100m (£150m to £250m), but revenues only increased by £100m.
Before delving as usual into fact-checking vs the accounts, the immediate reflection I have is that the operation of the club has not been spiralling since 2016. These are the annual figures for the operating profit, excluding player trading, with also the European competition the club was in that season as a useful reference as it does impact revenue:
So the club actually stabilised its core operations, with the help of some Champions League football, from 2018, and even broke even in the 2019/20 season with Europa League football. Sir Jim is right that the club has lost its way in the last 4 years however, even with Champions League revenues, but it did pull back some of that operational loss even with Europa League (reaching the QF) in the 2022/23 season.
It also highlights that his figure of £330m of losses in the last 4 years seems to be very wide off the mark (and even taking the bottom line profit/loss over the last 4 years up to and including the 22/23 accounts is ‘only’ a combined loss of £178m). So the losses for 23/24 (not yet publically published and are much later than usual to be so) and projected for 24/25 must be shockingly large to match up with his claim.
But what I reflect on is that the operational losses in the 2022/23 season are more than the salary bill differences between the club and Liverpool currently. So are the inefficiencies really in the business, rather than mainly in the player squad and recruitment processes?
An accurate cost split of player to non-player costs from the statutory accounts is not possible due to the format clubs use but we can see the total revenue and the total operational costs (player and non-player).
Looking at the 2016 and the 2023 accounts (the 7 years he references) we can see that revenue has grown from £230m to £601m (so actually a growth of £371m, not £100m). The total operational expenditure grew from £315m to £627m (so actually a growth £312m). So again I am not sure what the figures he is using are coming from.
He then claimed that by December 2025 the club would have run out of money (cash). This is a very frightening and bold claim, and I think aimed to shock fans and prepare them for the cost-cutting actions he is starting to take.
What is key to understand here is that all these numbers above are profit-orientated, and do not relate to cashflow. For example, expenses include amortisation of player contracts, agency fees and signing bonuses. These impact profit / PSR only, not cashflow. On the other hand, buying a player causes a cashflow impact much larger than the amortisation impact that year. That is unless you pay for the player in instalments. And, see Financial Realities and Tough Decisions above, this is part of the issue that Sir Jim is lamenting, with the club having ‘kicked the cash can’ down the road with player purchases via multi-year payments for players.
So how much cash does the club have? Looking at the statutory accounts (ending 30th June) we can see the amount of cash ‘in the bank’ but also the amount of borrowing that the club had at the end of the year (as you can have more cash, but it might just be from taking out more loans):
Also, it should be noted that on 30th June 2023, the amount of cash owed to the company in the next 12 months (current assets) less the amount the club is committed to pay in the next 12 months (current liabilities) was -£58.5m, which wipes out the cash reserves at this time.
What is seen here brutally shows the fear that Sir Jim has and a pattern that needs to be reversed as soon as possible. When we pair this up with the profit figures above, it is evident the club fell off a financial cliff in 2020 and funding losses via loans, as Sir Jim pointed out. However, the size of these shifts in cash are far larger than the drop off in profit and point in the football world to:
Buying players for high values and putting them on long contracts to spread the amortisation cost, and borrowing money to make these purchases
Borrowing more money to pay the interest on existing borrowing
Large investment in infrastructure
The club have 15 players on 5 year contracts, and 13 of the 14 players signing contracts since summer 2023 have been put on these 5 year contracts.
Looking quickly at the movement in transfer fees (using www.transfermarkt.com) over the last 6 years, we can also see the pattern that more has been spent on buying players (historically since Ferguson left spending has been similar to below, but never over €100m before he left). We can say that the industry has moved to ever-increasing player costs (and salaries) but what is key is that the club are not getting the benefit of that via sales, and buying far outstrips what is being sold (the opposite of the Brighton model):
The difference between paying for players and selling players averaged out over these 6 seasons (24/25 is yet to finish) is a theoretical loss of €140m per year. This also gets worse when you add in player purchase costs for agency fees and signing bonuses to the headline amount the players are bought for (total player costs that were amortised in 22/23 were £247m).
This indicates that point 1) has been used increasingly in the last two years.
The growth in borrowing from 2019 to 2023 is £324m, and interest on this borrowing (assuming £33m per year) in that period would be £132m, so it would logically back up point 2) to be true.
Looking at the amount of costs that have been spent on infrastructure each year, these are treated like player contracts and amortisation over a period of time, but cash goes right out of the door:
Unlike the two other points above, there are no massive infrastructure project spends that would materially distort cashflow, although when loss-making, spend of £20m on infrastructure is relevant and should be on things that will translate to income. Maybe this is why the leaky stadium roof has not been fixed yet.
Looping back to Sir Jim’s point that they have to make £89m in player instalment payments to other clubs this summer, and Neville's claims there is £390m of instalments owed on the books currently certainly reinforces the points above as well.
But at the end of the day, if the club didn’t buy any players, there must be far more than £26m in amortisation costs in the current year, which will mean a 22/23 £26m loss is actually cashflow positive and with the £68m of cash (I am not sure how much is left in June 2024 or what the loss is for the season) there should be cash to pay the instalments. They also have £20m in annual wages in expiring contracts (Eriksen, Lindelof, Evans and Heaton) this summer to further help cashflow next season.
So to be dramatic, they could be flirting with running out of money, but the one thing he does not mention is that the club have £50m of an unused credit facility (unused as of 30th June 2023) that could be used in the short term. So the club would likely not ‘go bust’ as he threatens come December.
Also, there is hope Antony (3 years into a 5-year contract amortisation-wise), Sancho (4 years into a 5-year contract) and Rashford (Academy product), who are all playing well away from the club, can be sold this summer to aid profit and cashflow. This also reduces large salary bills for 25/26 as the club will still be subsidising these players' wages whilst out on loan.
The glaring issue is then that this reduces the outfield squad to 17 players, and so some players will need to be bought, unless they continue to rely on Academy players.
However, with Sir Jim being a businessman primarily, he must be worrying more about £430m in loans that expire on the 25th June 2027. The hope is they can be rearranged, but this debt is also part of the fundamental problem at the club, and is tackled later. Interest rates have also dramatically increased over the last 5 or so years, so the burden of interest payments may be increasing, which Neville illuded to.
At the end of this segment, Neville and Sir Jim circle back to the issue of free lunches that have been axed. They both put forward very good points. Neville points out that the club is in the top 3 most revenue-generating in the world, but they can’t afford to give free lunches away and are taking £40,000 away from the Former Players Association. He also points out these things impact the soul of the club.
Sir Jim points out that in the modern world, most people do not get a free lunch, this money is coming out of fan money (tickets, shirts, TV money) and at the moment the club is loss-making so to pay for this they need to get a loan from the bank.
Balancing Finances with Team Success (21:43) & Management and Financial Restructuring (22:29)
TRP Confidence rating: 5/10
Sir Jim then carries on to make the point that if the club allow free lunches, where do they draw the line in terms of spend, like getting a nice car expensed down to London.
Neville asks why the club cannot have both the small things (like lunches) but also fix the larger issues.
Sir Jim points out that in the last 7 years, the club twice lost £100m of cash annually (one is obvious in the above cash table, the other was in 2022 when borrowings increased by £105m) and so they need to ‘get the house in order’ and to do that they first need to put in place a management structure so the right decisions are made. He does rightly point out that getting in key staff means they are on gardening leave (for probably 3 months on average, a real thing) and so there is a delay in getting that structure in place. He says the last member of the team started last week. This I get less on board with as this is over a year from when he took over.
I would also point out that this team is not doing a particularly good job if the £40,000 for the Former Players Association was removed given Sir Jim is saying the team is supposed to be making the decisions on what are ‘good things’ to cut and what are not.
Sir Jim points out that once they ‘have the house in order’, it is then all about recruitment. This very much is spot-on for most clubs. To his credit, he also says that they need to be profitable to pay back the loans, which will in turn increase profitability each year. In this regard and the larger strategy, I am aligned with what Sir Jim is trying to achieve. He and Neville disagree with ‘killing the soul’ of the club on that journey, as it seems Sir Jim just wants to get to success (financial and team performance) as quickly as possible, whereas Neville would sacrifice a bit of speed to maintain certain expenses at the club that are seen as key to the identity to the club.
Recruitment and Future Prospects (23.19)
TRP Confidence rating: 7/10
Sir Jim really then starts shining the light on the source of issues when he states that since Ferguson left, the club has spent £1bn on players, which he says is the same as Manchester City for the same period, and Liverpool have spent less than them.
He draws the right conclusion, the club have not bought players very well compared to their competitors. He says getting recruitment right is the number 1 priority, and that requires data analytics which they don’t currently have, but rightly points out the best clubs do have.
The look at the club’s transfer activity in Addressing the Club’s Financial Crisis above validates this statement by Sir Jim, but actually the figure for money spent on players since Ferguson is north of £1bn, it is €2bn (per www.transfermarkt.com). It is even further north if you include all the purchase costs (agency fees etc).
But he then came up with, in my opinion, one of the most shocking, and far-reaching statements of the interview: ‘In 3 to 5 years, ManU will be the most profitable club in the world’. He also stated it will have the most iconic stadium in the world and will be winning silverware.
Putting in place a data system, getting in the players at the right age, developing them and then selling them (think Brighton) will be the only way to become that profitable as other forms of revenue will not grow much more (before a new massive stadium, see below). That takes more than 3 years end to end just to get the first players out, although their Academy are still producing some gems.
The issue they have is that other clubs are ahead of them in sophistication, but if they can catch up, the power of the ManU brand will give them a competitive advantage when luring this well buried global talent to the club. I agree with him that if they can transform their recruitment to be world-leading, coupled with their top three best global revenues they will be on the way to becoming one of the most profitable clubs in the world. But they do need to remediate their debt burden, and that comes up next.
The issue that will slow this extremely bold statement from happening, other than the points above, is that next year they will have no European revenue boosts (unless they win the Europa League, and a huge amount of club stability actually hangs on this) which will result in increased losses, worse cashflow and possibly further growing debt. They also do not have a large pool of valuable player assets at the club compared to the squad historically, and the ones they have (like Amad and Mainoo) they need to keep to get back into Europe.
Another issue to compound the problems in remediating the financial structure of their squad is that they have players on huge salaries that will be difficult to shift (Casemiro is rumoured to be refusing to move for anything less than his £300,000 per week salary).
A new stadium will provide a large boost to revenues, but that will take at least 5 years to get approved and built (usually 10 years, but they claim to use a modular system approach to half the time). But who is going to fund the stadium? The government has rebutted the approach for national money for the stadium itself and if someone does not put in equity, this will just saddle the club with even more debt.
So will they return to greatness: probably yes. Will they become the most profitable club in the world inside 5 years: extremely improbable.
Challenges with the Glazer Family (24:13) & Addressing Debt and Financial Mismanagement (25:22)
TRP Confidence rating: 7/10
The interview then moved on to ‘the elephant in the room’, this being the 75% owning Glazer family. Neville reels off the chilling 'facts':
£200m taken out as dividends
£730m of debt that has been put onto the club
£35m per year in interest payments
Neville asked Sir Jim why not ask the Glazers to put some money of their own in for a change (not debt) and Sir Jim points out that endlessly funding losses is not the answer.
The debt factor is very relevant to assessing the true profitability of the club, in two material ways. There are the sizable interest payments that Neville rightly brought up that drain the club of profit and cash every year (2023 accounts show about £33m in debt interest payments).
But with $670m in loans and the accounts being prepared in British pounds, there is an annual conversion to price the debt ‘on the books’. The amount of the debt can stay the same, but the movement in exchange rates of US dollars to UK pounds will cause a profit or loss from the movement in the valuation of the debt.
To illustrate the point, the movement between the two currencies in roughly the last month is 5.7% (US tariff wars). So the movement in just that month in the valuation of the 2023 US debt would deliver a profit of roughly £30m (as the debt is now worth less in UK pounds). If you can imagine the swing was the other way, the debt alone would represent a loss of £63m (although cash is only £33m down). The other way of looking at this is that the last month would have hidden (in terms of profit) £30m of losses in the business, but actually the business would still be that loss-making in reality.
Sir Jim points out that over the last 4 years, debt has increased by £330m to fund the loss-making. He also is adamant that the company is a bloated organisation and that is what needs to change, not just pump in more money.
The sentiment seems correct here and the ship really needs to be turned around. But some fact-checking is needed here.
In 2019 borrowings were £511m and these grew to £613m by 2023 (£102m increase, not the £330m that Sir Jim claims). There is a £200m unused loan facility (£150m expires on 4th April 2025), but this should not count in the figures of what has actually been taken out as debt. Could it be that the club have taken out over £200m of fresh debt since June 2023?
What he may be referring to, rightly, is the debt relating to money owed on players already acquired (instalments due in the future) and this also has a contingent element based on player performance triggering further payments. In 2016 the club owed £156m in instalments, with £40m due in more than 1 year. By 2023 the club owed £276m in instalments, with £161m due in more than 1 year. So long-term instalment payment structures have increased from 26% to 58% over this period, evidencing a trend of increasingly pushing the cash issue further into the future and over-leveraging on players as the debt in the club has been increasing (as the club is not profitable, as it is was profitable it could be seen as good cash management).
Looking at the reverse and where instalments are due to the club for players already sold, in 2016 £47m was due, of which £11m was due in more than 1 year. By 2023 there is not much movement, unlike with what is payable, as £42m was due, of which £22m was due in more than 1 year. So it has decreased slightly, but also the same trend of not getting the cash in more quickly is seen here.
When it comes to the extra instalments that might need to be paid based on bought players performing well against agreed clauses in the purchase contract, these also have skyrocketed from 2016 (£36m probability adjusted to £31m) to 2023 (£133m probability adjusted to £114m). This does track the increasing cost of players, but it is yet another locked-in future drain on cash.
The contingent amounts owed to the club from players sold, probability adjusted, were just £1.6m in 2016 and zero in 2023.
So Sir Jim does have a point, debt is increasing and payments outstanding on players are increasing. We also don’t have the 2024 accounts, so it might be as high as the figures he quotes.
But the much larger point here is what can actually be done outside of player costs to turn this around. We have shown above that all the redundancies (and these seem excessive compared to Liverpool) would save £9m per year. Getting Ferguson to step down from the Board saved another £2m per year. The other cost-cutting might find a few extra million pounds, but this is not going to transform the club into being hugely profit-making and cashflow positive. Squad costs, recruitment and debt are the real issues that will turn the club around if remediated.
Liverpool have similar revenue, but do not have the debt burden and have a less expensive squad wage roster.
Fan Discontent and Ticket Pricing (26:54)
TRP Confidence rating: 6/10
Neville points out that Glazers have made lots of mistakes and he understands that Sir Jim cannot speak badly of his business partners, but asks why don’t they put equity back into the club, having effectively saddled it with so much debt from the leveraged buyout back in 2005 (with £525m of debt being put onto the club at that stage, and in 2023 the Premier League voted to cap these type of leveraged buyouts to a maximum of 65% of the value of a club).
Sir Jim then utters a phrase that sums up quite well what has been concluded so far above: ‘They bet the bank on getting Champions League, but it didn’t happen’.
He is very open saying that people don’t like change, he knows he is starting to get increasing criticism for what he is doing, but he doesn’t mind that to get the club back to where it should be.
Neville points out that 20 years ago, just before the Glazer reign started, the club had the best stadium, the best training facilities, the best squad and no debt. They have presided over the decline of the club, and Sir Jim is now acting as a shield to the Glazer family as they are responsible for the state of the club.
Sir Jim tried to deflect some of Neville’s criticism of the Glazers, citing that they gave the previous two management teams ‘too much rope’, but Neville forcefully points out that the Glazers have been negligent (my point at the start about not being able to delegate responsibility). Sir Jim ducks this, and says ‘he wants to look forward’.
It was very positive to hear Sir Jim state that it might be a bit arrogant of him to think he can achieve the total transformation of the club, and he might not achieve it, but he wants to try as he loves the club. He also talks to the board he has formed and that it is not just him, there is a group that all believe in the mission. This board meeting last week was the first time the full team was in place. I do question why it has taken 14 months for that to happen.
Neville then brings up ticket prices, which he says are now at £66 in certain areas with no concessions. Sir Jim says they will go up, not by a big amount, but he will only know in the next few weeks what it will be. Neville points out that fans will be livid if prices go up again in such a short period of time, having been put up mid-season this year.
A quick financial check shows that if you put up ticket prices by £5 for each of the 19 home league games for the 74,000 capacity, that will generate extra revenue of £7m per year. So the reality is it helps a bit, but is a drop in the ocean of the problem at the club and can price out core fans. But based on Sir Jim’s comments above, he sees this all as an aggregation of costs to get to the goal of profitability.
Sir Jim responded by saying that he recognises the support of the ‘faithful’ supporters at home is worth points in matches to the team. Neville immediately challenges him as to who are the ‘faithful’ section of supporters? Sir Jim defines that supporter as someone who has a season ticket and goes to the bottom of the table clashes as well as the ‘top6’ games. So the ticket pricing should be fair and affordable, and points our people are not just from Manchester, and gives the example that some come from Hong Kong. He says there should probably be a structure to pricing to reflect this.
He points to the fact the employees get pay rises and that needs to come from somewhere and there is a hole in finances currently. But he does say that they are looking for concessions for children and other groups.
He did then address the £66 mid-season increase that was heavily publicised. This was the case of 500 concession tickets that were returned as they didn’t want to go to the relevant games, and they were resold at £66, the non-concession price. He also then mentioned that that process has now been reversed and will not happen again.
Neville points out that was a PR disaster. He likens this to the Former Player Association decision and the fact the people below him are making large mistakes.
Given the tickets were a mix of £40 and £25 ticket, the maximum the club could have made extra from the tickets (and not issue them again as concession tickets) would have been £20,500. So this is indeed another huge PR mistake for what is an immaterial amount of money being saved.
Vision for the Future: Stadium and Training Facilities (38:39)
TRP Confidence rating: 5/10
Sir Jim talks about the new stadium and the fact that the government has the regeneration of South Manchester as one of three investment priorities, and if green-lit it will be the largest regeneration project in Europe. He confirmed that the government would not pay for the stadium, and ‘the club does not need them to pay for it’.
A new 100,000 state-of-the-art stadium, with hospitality, commercial and many other revenue-generating opportunities will give the club the step up to a new level of revenue generation that should raise it to be unparalleled globally (potentially and if managed correctly). But we are putting the cart before the horse here.
How a stadium will be paid for? The cost is estimated to be £2bn. Interest on debt is already running to £33m a year, and likely to go up when probably refinanced in 2027. The state of the team (performance and value) and recruitment is not delivering profits to start clearing debt. It is unlikely the club have European football next season. Vast sums are owed for already purchased players in pre-agreed instalments, with large sums also expected in future add-ons to these player purchases.
Sir Jim is a billionaire in his own right, but I don’t see him stumping up the full cost in the form of equity to get it built. I can’t see the Glazers putting any material levels of money back into the club (why buck a trend) and they would likely block any more equity going to Sir Jim if he is successful in turning around the club. So there are still a lot of questions on how this will happen.
Sir Jim then goes on to the fact the new best-in-class training facilities at Carrington should be finished by the end of this season. This explains the infrastructure spending recently and should help turn around the value of the squad, although there is a small time delay to see the benefits of that, so not an instant fix to the finances.
In brutal facts, if you take all the value (assets) of the club and subtract all the club owes (liabilities), Manchester United have -£114m of net value as of 30th June 2023. Liverpool at the same time has a net value of £194m. Hence Sir Jim buying a 25% stake (28.9% as at 31st December 2024) in the club with £237m of capital injected up to 31st December 2024 helps address this balance (cash coming in as equity, not debt) and with the deal reportedly worth £1.3bn, this can turn the club around. But it cannot carry on being run the way that it is, and Sir Jim rightly needs to change it to protect his investment.
Conclusion (43:08)
Neville closes up by pointing out that in 25 years the Glazer family never spoke and the fact that Sir Jim is communicating is a large improvement, even in these challenging times.
Sir Jim acknowledges they are going through a tough time, as are the supporters, but they want the same things as the fans and getting the club back to glory.
TRP final thoughts
There is a lot to take in above and through the 45-minute interview. But what I gleaned from it was that:
Sir Jim seems genuine in wanting to get the club back to glory
He is not afraid to do the difficult things and is willing to be unpopular
He wants to run the club as a business but still make the team successful
He seems to fully grasp the football world and ecosystem completely, nor do some people who have been brought into the club and working for him
His grasp of some of the numbers seems to be off for this club (although 23/24 accounts are not public yet) and others, but his understanding of the key issues is at a high-level spot on
It took too long, with some form of naivety, to set up himself and the management team and some key decisions have been made poorly
He admits when decisions are wrong, but I get the feeling he does not always take full responsibility for them, and this is something to watch
His focus on operations for savings will actually give some savings, but it will not return the club to profitability alone and I question if all these things need to be done and each one is not properly assessed for benefits vs damage
Operational cost cutting, although painful, might actually stem the debt from growing much each year until other savings can kick in
The club appears not to be going bankrupt, but it is on financial ‘life-support’ and serious change is not optional for the club to survive
The only way to shift the debt is to get the player side fixed, which involves improvements to salary structure, recruitment processes and upselling of players
This is not a quick fix and the club will highly likely need more than 5 years to be back on top of the world
It will require a departure from glamourous recruitment and if the Academy can be used, this will accelerate the return to profitability
I get the impression Sir Jim has no power to strongarm the Glazers if needed and at the end of the day, he is a minority shareholder with 25%
Manchester United still have choppy waters ahead before they get back to the Promised Land, but at least they now have a rudder.
Hopefully you found this article insightful and helps you discuss Manchester United in more detail with your loved ones, friends and colleagues. If you did, please follow me on X (@therandompundit) for more content.
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