What Is Manchester United’s Transfer Budget?

There are two sides here: One who think that Manchester United are strapped for cash (thanks to the Glazers) and the only money we have is what we got for Obi Mikel and what we’ll get for any sales we make this summer (Nistelrooy, Miller). In short, we got no money and we’re screwed.

Then there is the other side which maintains that on top of that money we also have 20-25 million in the bank for buying a top class midfielder / striker – money we had avaialable in May/June when Manchester United were chasing Diarra. Not only that but they also seem to think that we can afford two big signings – a Diarra / Gattuso and a Torres.

Who’s right?

Are we broke?

Interestingly, it is the Manchester United fans who are talking about the club not having enough money. From United Rant’s sunday piece:

“In the background United’s board is searching for more than £500m is securitized debt to pay off the hedge fund loans that the Glazers secured to acquired the club last summer. The punishing interest rates of around 20% per annum are racking up new debts of £60m a year if they are not refinanced. Arsenal recently refinanced their loan, securing a £260m advancement against future season ticket sales to pay for their new stadium at Ashbuton Grove in North London. United’s problem is that they are asking for twice as much with only 15,000 seats extra to sell. In reality season ticket sales are unlikely to be enough – with a sale and leaseback of Old Trafford the only realistic outcome if the Glazers are to secure additional funding.

The problem in the longer term is that £500m of debt is £500m of debt whichever way you look at it. It’s £500m that would could have been spent on players over the term of the loan. In fact with a 25 year loan United will pay more than £950m in repayments at the 5.8% interest rate that Arsenal has secured. Do the maths yourself – £950m / 25 years = £37m a season that United will not spend on players.”

It sounds ominous, and seeing how Liverpool and Tottenham are spending their money it’s obvious that Manchester United are in more than just a spot of bother.

We got ‘some’ cash

With a club like Manchester United you cannot say that we don’t have a rebuilding strategy or that we really don’t have any money left to buy players with. It may yet be wishful thinking but considering that United would have bought Diarra if possible before the World Cup started, it is worth considering that a sum of 20 million pounds was available to the manager to spend then and would be available now as well.

Glazers know that unless Manchester United perform well on the pitch they will not have any chance of being able to pay back those big debts. Buying key players is necessary, but then the question is, who decides which player is key? Michael Carrick, a 8 mil backup midfielder could be our biggest signing this summer at 14 mil – 6 more than he is worth. The other signing could be a reserve keeper, which makes absolutely no sense.

So either we have somewhere near 40-50 million pounds to spend in the transfer market, or we got just 12 mil and we have to sell players to raise the rest.

What do you guys think? How much money do we have?

[tags]Manchester United[/tags]
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