Insufficient cash delays buying in the summer window. Is Manchester United s financial situation really worsening or is it fake serious?

Sports Weekly All-Media Reporter Li Jingyi

On Thursday, Manchester United announced its third-quarter financial report for the 2024-25 fiscal year. Given the Red Devils' defeat in the arena this season, public opinion is worried that Red Devils' financial affairs will be implicated. According to the financial report, Manchester United's cash reserves as of March 31 this year fell to 73.2 million pounds, down 22.5 million from the second quarter, that is, in the first three months of this year. Recalling the competitive party Sir Ratcliffe issued a warning at the time: If a series of cost reduction and efficiency improvement measures including 450-man layoffs are not implemented, Manchester United may run out of cash before Christmas or even face the risk of bankruptcy. La Jue's reprimand is still in his ears, and the team's latest financial report is unremarkable. Fans were worried, fearing that the road to reconstruction would be long and hope for revival would become slim, and the dark night would evolve towards the eternal night. But in the eyes of industry insiders, Red Devils fans can calm down because Manchester United's financial situation is not as severe as it appears on the surface.

Compared with the same period last year, Manchester United's cash reserves were only 67 million. Of course, the increase in this number is directly related to Lajue's 238.5 million investment. In other words, the improvement of the Red Devil's books is inseparable from the blood transfusion of Lajue. As the summer transfer window opened, the Red Devils' cash situation attracted much attention. They have announced that they will sign 26-year-old Portuguese striker Cunia and will pay Cunia a termination fee worth £62.5 million in three installments within two years. Cunia thus became the sales bet in Wolves history. In order to reduce the repayment pressure, Manchester United once proposed to pay Cunya's transfer fee in five years, but Wolves decisively refused. In order to fulfill Amorin's commitment to reinforcing Amorin and his commitment to revival for fans, the Red Devils are still chasing Brentford's star and 25-year-old Cameroon's right winger Mbomo.

financial report shows that Manchester United still has the ability to borrow up to £90 million in cash through revolving credit, which can be used for transfer expenses. The problem is that once they do so, United's debt will increase to £713.2 million. In the first three quarters alone, Manchester United's "intangible assets" cash expenditure reached 195.6 million, mostly transfer expenses, which is 41.9 million more than their similar expenditures throughout the 2023-24 season.

While La Jue issued a bankruptcy warning, he also revealed that even if Manchester United does not sign one person this summer, they will need to issue a cheque worth 89 million pounds to repay transfer installments including players such as Casemiro, Sancho, Lisandro, Onana and Hoylen.

Manchester United's total revenue in the third quarter was 160.5 million, up from 136 million in the same period last year, thanks to increased revenue from game day, commercial advertising and broadcasts. The team's salary expenditure is 71.2 million yuan. Due to the forced salary cuts of players who have not entered the Champions League, clearing their winter windows and extensive layoffs, the salary expenditure has decreased by 20 million yuan year-on-year.

Football finance expert Kieran Maguire pointed out: There is no need to worry too much about Manchester United's cash reserves. They actually earn more cash per day than any Premier League club for the following reasons: they have one of the largest stadiums, with top-notch game day income, plus yesterday's Champions League prize money. Therefore, it is exaggerated to over-examination of Manchester United's bad financial situation. Their losses were not as bad as La Jue described. Most importantly, public opinion is worried that Manchester United will step on the Premier League’s “profitability and sustainability rules” (PSR) red line, but whether it is PSR or FFP, the basis for review is Red Football Ltd’s account established in February 2005. Most people mistakenly focus on the parent company of Red Football, namely Manchester United plc, listed in New York.

Although the financial report content of Red Football and Manchester United Group is highly consistent, the most critical indicator - loss, the application content of the two companies is very different. Taking the 2023-24 fiscal year as an example: Manchester United Group declared a pre-tax loss of 130.7 million, while Red Football was 3620. UEFA's European Club Financial Investment Report lists the Red Devils' loss data at 42.4 million euros, which is obviously adopted from the wholly-owned subsidiary Red Football Account. For the projects such as Lajue's share purchase cost and financial cost processing, which are included in the "special project", the financial reports of the two companies are significantly different, and the amount of Manchester United Group is more than Red Football.

Competition Network disclosed that this change mainly stems from the debt restructuring within Manchester United Group on the eve of La Jue's acquisition, and Red Football's exchanges were converted into interest-bearing internal loans. To put it bluntly, it is to take advantage of the rules of the Financial Fairness Act. Chelsea and Manchester City have both operated the same thing, and both are referred to as "fully in line with the spirit of the rules and industry practices."

According to estimates, even if Manchester United's total loss in fiscal 2024-25 reached £141 million, they are still within the PSR compliance limit.