Manchester United have shed £14million from their wage bill, helping stabilise the club financially after the summer transfer window.
Following numerous doubts surrounding the club's financial stability, Manchester United have disclosed that they've managed to reduce their wage bill by £14million compared to last year. That's according to their recent second-quarter financial results, which have shed light on the current standings behind the scenes.
This comes after a bustling summer transfer window, which witnessed some of the squad's top earners depart in an effort to achieve financial stability. With the absence of European football following a disappointing campaign under Ruben Amorim last season, there were apprehensions about investment due to the shortfall in broadcasting revenue and prize money that a tournament like the Champions League can offer the club.
Consequently, a significant clear-out of the squad was initiated, with players such as Marcus Rashford, Rasmus Hojlund, and Andre Onana loaned out to alleviate the wage bill. While it may have been a cost-cutting exercise, it also provided them with opportunities to play, as they were seemingly deemed surplus to requirements by the then head coach.
Permanent departures for Alejandro Garnacho and Antony further bolstered the bank balance before the club ventured into the market seeking options to enhance the squad for the future. Matheus Cunha, Bryan Mbeumo, Benjamin Sesko, and Senne Lammens all made the move to Old Trafford, coming at a cost of over £200million.
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However, even with these high-profile arrivals, the wage bill still dropped to £75.1million for the three months ending 31 December. That marks a 9% drop compared to the previous year, significantly strengthening their position compared to the start of the summer.
That has kept the wages to revenue ratio standing at a healthy 45%; for every £1 the club generates, just 45p goes towards wages, making it among the lowest in the Premier League. This has helped validate the departures of players like Rashford - who commanded substantial wages - and Garnacho as the two most high-profile exits of the summer.
The duo lost their place under Amorim and appeared to have no future at United, with the club now positioned to invest from a more solid financial footing. What this means for United's summer plans remains unclear, given their transfer expenditure last summer, though much could hinge on the job Michael Carrick manages to do.
Securing Champions League football would deliver a massive potential revenue boost, with the likes of Chelsea, Arsenal, Liverpool and Manchester City earning roughly upwards of £90million from the league phase alone across all revenue streams - whilst Tottenham collected just over £80million, and Newcastle brought in around £50million.
This could free up additional funds for United to bolster their squad in the summer once more, having just recorded operating profits of £32.6million in their most recent accounts. There will be new financial rules for Man United to consider as well, as the Premier League moves away from the Profit and Sustainability Rules (PSR) era.
Starting next season, clubs will have to adhere to the Squad Cost Ratio (SCR) rules instead. This will allow clubs to spend a certain percentage of their revenue on the overall assembly of their squad, similar to how UEFA currently operate.
With United cutting back on the spending, they are working from a lower point from which they can invest into the team at. Throw in the possibility of being back in the Champions League, and things could line up nicely for another summer of heavy spending to back the new coach in charge.
Whilst this all remains a possibility, the approach to those signings will largely hinge on which head coach the hierarchy appoints to the position, and there's still considerable time before that becomes clear.
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