Hypothetical question: what would be the impact if ManU doesn't make the CL

Man U will not finish top 4. So they will have to win CL to get back in. I can see it happening. So finically they will be ok. And if they dont win CL which is unlikely it just means they dont have as much transfer money.

Top4:
1.Chelsea
2.Arsenal
3.Middlesborgh
4.Everton

 

A good question which kind of intrigued me so I went to http://ir.manutd.com/manutd/findata/reports/ for a little info, where you view the PLC's financial report for the year ending June 2004.

To my extremely untrained eye it appears that they'd be ok financially if they didn't qualify but it looks as though money for players would be stopped/reduced for a while and could very well have to sell before they could buy. Here's a few bit's and pieces from the report:

"The company has taken advantage of section 230 of the Companies Act of 1985 and not presented its own profit and loss account. The company's profit for the year was £22.43M".

The above figure includes all expenses including taxes/dividend payments to shareholders etc. They paid out over £21.8m in transfer fees and outstanding instalments on players purchased and received around £4.1m in return so they were definetly net spenders in the transfer market.

United received £20 million in Champions League TV revenue last season and £4.9M in matchday revenue from champions league games and when set against matchday expenses they profited to the tune of £23.6m from being in the champions league. No champions league could mean UEFA cup so matchday revenue could still be there but I'm not sure as to how much they'd get in the way of TV revenue.

The company had £31.4m cash in the bank.

All of this is before the they bought Wayne Rooney but most of the fee will probably be paid in instalments/ payments depending on whether we qualify/win competitions etc etc.

So they made £22.43m and without the champs league they would have made a loss of £1.2m after spending a net £17.5m on transfers. No champs league and no players in or out and they would have made a profit of £16.3m. Add this to the cash in the bank and they look ok for a while to me.

I've never really looked at the financial reports before and it was pretty interesting stuff and found out a few more facts:

Lazio still owed/owe us £12m for Jaap Stam (like we'll ever see that)
Chelsea still owed/owe us £6.25m for Veron
United payed £2.5m to Fabien Barthez in compensation/severance on termination of his contract.
They still owed PSV £1.4m for Ruud Van Nistelrooy.
They owed/owe Sporting Lisbon £7m for Ronaldo.
Theres' also a list of fees paid to agents on transfers and a list of when players contracts expire.

If you've got some time on your hands the full report makes for some pretty interesting reading, but be warned, it's tres long!! (88 pages in pdf. format).

 

every club can have a bad year, it probably isnt desireable, but they will not suffer too much financially

 

if ManU doesn't qualify for CL play, the color red will be eradicated from every bit of media world wide. it will be replaced by fuschia.

or not, as the case may be.

what makes people wonder about this sort of question?

 

Boro and Everton in the top four by years end (is that what you're saying?) and it's "unlikely" that Man United will NOT win the Champions League this year?

I don't know where to start.

 

For clubs who're dependent on CL for revenue, this would be a crushing blow. It wouldn't be short term for ManUtd, since most of their money comes from merchandising. However, their long term prospects would be affected because they wouldn't be showcased in the top club competition in the world. That would hurt a lot more.

That being said, I have a hard time imagining them not being in the top 4 at season's end.

 

so,what u are saying is that is that Man U and Liverpool will not qualify for the champion league????How can Boro and Everton qualify,they dont have the squad!If one of there medfielders are out,those teams have no quality backup!!Lets not forget that the real test is from Jan to May!!!There the squads will be tested with injuries and tierdnes,since week in and week out the same players play!Man U is just right now in a bad situation,and the only way out is to buy some more midfielders ,scholes and giggs will get old soon!!Liverpool has been hit with a number of injuries,and have to sometimes play with a 2nd string midfield!!!!Give Liverpool and ManU time ,but they are shurely out of the tittle race by now !!!(maybe next year)

 

united will qualify for champions league football, its one of those certainties in life

 

---
excellent reason. pardon my insouciance.

 

Right because no teams that dominated the top division have ever fallen before. Remember when Liverpool owned the top spot? I won't even mention past champions that have fallen lower. While CL money makes this less likely than before, it is certainly still quite possible. ManU will likely make the CL and is almost certain to get a spot in Europe but would you really be shocked if they slipped a bit lower? I wouldn't. Money can only cover up for mismanagement and poor player selection for so long before it bites you in the behind.

 

The impact would be minimal over the course of several seasons, in all realities. A corporation like Manchester United can run at a significant deficit for a number of years without their commercial viability being questioned by the people that matter - their shareholders and the financial institutions that guarantee their position as "biggest football brand in the world".

That means that even their power in the transfer market would not be significantly affected by a lack of Champions League football for a minimum of two and possibly as many as four or five seasons. Remember - at the moment they are making net profits of £25m a year minimum, so even a season without their habitual run to the quarter finals of the Champions League would leave them trading at a small profit as things stand. And do remember also - in the next year or so it is likely that that they (along with all the other big clubs) will get more control over their domestic media rights than they currently have too so that's even more money, irrespective of the CL.

Actually though, there is one potential cloud on such a hypothetical CL-less horizon - the two main current investors in United plc, Glazier and the Paddies. At this time, it is highly likely that either or both of those would use such an eventuality as a pre-text for a takeover bid or, at the very least, some pretty serious shake-ups at boardroom and (perhaps) manager level. But even if that came to pass, they would simply be the new people in charge of making the best of the situation so in the final analysis nothing would change in financial terms.

 

Say hello to Leeds Utd!

 

they could just bring out 2 new kits to subsidise the money lost from champions league revenue.

 

LMAO

 

Yes, or Chelsea, pre-Abramovich. Their last "five year plan" under Bates had them qualifying for the Also Rans' League every year. They managed it in one of those five years. When Abramovich came in, they were £100m in debt and a week away from defaulting on a bond repayment of £10m.

It will pay to keep an eye on Newcastle United over the next year or so too. Their spending has been measured by contrast to some of their southern neighbours, but ultimately they have a steadily solififying brand to protect and can't be doing that if they're forever hanging on the shoulders of the big time. A couple of years ago they splurged for that very reason (and qualified for the CL) and I think they will do so again next summer. Their subsequent campaign to finish in the top four will then take on an added dimension of rigour. As I said - Newcastle will be worth observing more closely for anyone interested in this dimension of the game in our country.

 

hello!

 

The Toon will be OK, provided the supporters still turn out to watch.

The fundamental difference between ourselves and Leeds was that Leeds' borrowings went straight into players' and agents' pockets. Newcastle securitised their season ticket receipts but used the funds to extend the ground by 15,000+ seats.

As long as those seats are sold for Premiership games, the interest and principal payments are covered easily, with a surplus in hand.

I think we'll do that as long as we are in the Premiership. It would take relegation followed by a failure to get immediate promotion to put us in financial trouble.

 

Yeah, but that's not the point. I agree that Newcastle have not "done a Leeds" in the sense of signing up to massive debt on the basis of that debt buying increased earnings, but Newcastle are still at a cross-roads. To put it another way - at some point in the not too distant future, Newcastle will be at a similar juncture that Leeds found themselves at in around 1997/8. Stick or twist, basically.

Their current earnings profile is sufficient to make them the biggest financial player in the second tier of clubs (i.e. not United, Chelsea, Arsenal or Liverpool but not Everton or Charlton either). But unless that level of expenditure can be translated into something more than occasional CL qualification, the gap that already exists between those that dominate CL qualification every year (like the aforementioned big four) and those that aspire to it on a more regular basis (like Newcastle) will grow to a size that no amount of investment can bridge. So two things need to happen:

1) Newcastle's current playing staff need to get a top four finish.
2) Should they attain it, they need to spend big to consolidate that position.

By definition, that puts them into precisely the position Leeds were in by about 1999/2000 and Chelsea were before Abramovich came along. Investing in the on-field gains in the hope that such investment will protect and perpetuate such gain.

And, like with Chelsea and Leeds, if the on-field gain is nonetheless lost, then off-the-field factors like that investment - that gamble - become the most significant aspect of a club's position.

There are signs that thinking of this nature is already prevalent at Newcastle - witness the Rooney bid this summer. That was what first made me think that the next club to watch for anyone interested in the financial dynamics of football in this country is Newcastle United.

 

They would have to sell Tim Howard to Barcelona for 30 million dollars to cover their lost income.

 

I don't think the Rooney bid was remotely serious. It looked like an obvious stalking horse to start the sale process for the benefit of Manchester United. We (Newcastle supporters) assume that Newcastle will get something from that, but we don't know what and when. (The rumour at the time was that John O'Shea would come to Newcastle as a "thank you".)

As long as the stadium is sold out every Premiership match to watch a bunch of mediocre non-achievers, the Newcastle board will not feel under pressure to make a big leap to try and achieve playing success.

The club's finances are geared to producing gigantically generous dividends which go into the pockets of the Hall family. On that basis, the club's management regards itself as achieving its objectives. The Champions League helps this, but in the eyes of the Newcastle board qualifying for it is the limit of their ambitions. While it doesn't entirely compensate for failure to get into the Champions League, a decent run in the UEFA Cup helps as well.

 

That makes no sense. They went in at £30m - a stalking horse bid is all smoke and mirrors, it's about the fact of a bid in and of itself. In that instance, they would have made much fuss and bother about going in at half that. The media attention to a firm bid being lodged would alone have been enough to kick-start a process such as this. And that's ignoring the fact that Rooney had already told Everton he wanted to leave at that point. Newcastle had no reason to lodge a bid other than to actually acquire the lad's services. And United had no reason to collude with Newcastle in this manner -the lad was theirs the minute he decided to leave.

Well I know the Newcastle board are not known for their farsighted competence, but that would be insanely stupid given the dynamic I talked about in my previous post. Basically, barring a major collapse in world football's finances (and I mean major like much bigger than all the mess that is already current), the gap between CL have's and non-CL have-not's will grow unsurmountable in the next four seasons or so. That means that a club such as Newcastle cannot afford to take a long-term view which includes their present level of bumbling around at or around the fifth-in-table spot.

Also, their investments in the team over the past two years clearly belie such images of self-satisfied complacency.

 

We were about to sell Gallas to Barca to make that payment. Man, that was an "interesting" summer.