Jim Ratcliffe has arrived at Manchester United with huge ambitions in overhauling the club from the ground up, but FFP (Financial Fair Play) and PSR (Profit & Sustainability) will be a considerable obstacle in his way.
The Evening Standard reported last week that United have set out their transfer priorities under Ratcliffe and they hope to sign an elite-level striker similar to the standards of Harry Kane.
Manchester United targeted the former Tottenham captain in the summer but were unable to get a deal done.
A No.8, a centre-back and a right-back have also been targeted as United look to bolster their squad and begin challenging for the biggest trophies once again.
Given the level of initiative being shown, United will need a hefty amount of transfer kitty along with some shrewd financing to help navigate the murky waters of FFP and PSR.
Many Manchester United fans were left anxious over figures released early in the 2023-24 season that revealed the club had a negative overall spend of almost £1.2 billion ($1.5bn) in transfer fees during the previous decade.
Published by CIES Football Observatory, the findings put United well ahead of the next-highest net spenders in world football over that period – Chelsea, with a whopping £885.5m ($1.1bn).
Given United spent £208 million in the summer and with plans to splash the cash again later this year, obvious concerns have come from United fans who are wondering where the money is coming from and how the club are implementing measures to avoid being punished by UEFA and/or the Premier League.
Under the Premier League’s profitability and sustainability rules, clubs are only permitted to make a £15m loss over a three-year period.
The margin for loss can become £105 million if the difference is covered by secure funding. The unpopular Glazer family’s lack of investment in the club since their leveraged buy-out in 2005 means the margin remains at £15 million.
However, with Ratcliffe’s introduction, new investment has arrived in the form of £245 million that will be set aside for improving the overall state of the club.
If this is ratified by the Premier League before the end of January, that could potentially result in United shuffling some of Ratcliffe’s money over to the transfer department.
Embed from Getty ImagesUnited had hoped this would be tied up earlier this month so that they could add to the squad now, with current circumstances limiting the club to just loan moves for the January transfer window, according to The Athletic.
If the Premier League don’t authorize Ratcliffe’s investment before the end of the month, then United’s shopping spree will have to wait until the summer.
It seems at first glance that United will be financially sound once Ratcliffe’s investment is approved, but things are still looking tetchy for United with regards to spending.
Unlike most clubs, Manchester United publish their quarterly financial results every three months. It showed that for the first nine months of 2022/23 that the club lost £31 million – which even with secure funding would make balancing the books very tight to stay within PSR’s means.
Ratcliffe is clearly an astute businessman and even though he’s been earmarked to overhaul the sporting department within the club, there’s a suggestion he may have a much more leading role.
He has an almighty task on his hands to stay within PSR and FFP’s boundaries given the financial issues at the club, and even more so with reports that United intend to spend big again in the summer.
