Manchester United - Power In The Darkness

Manchester United fans always suspected that Sir Alex Ferguson would be a tricky act to follow, but they probably did not anticipate it being quite so difficult. Since the Scot’s virtually unprecedented 27-year reign concluded in 2013, United have had to employ four managers in just over three seasons (including Ryan Giggs’ interim appointment).

David Moyes was the first to be handed the poisoned chalice, though he did not even last a full season before being unceremoniously sacked as the club failed to qualify for European competition for the first time since 1990. Hopes were higher when the experienced Louis van Gaal took the reigns and he did guide the club back to the Champions League, though his team failed to get through the group stage, losing to both Wolfsburg and PSV Eindhoven.

Even if United did win the FA Cup for a record-equalling 12th time, this was not enough to save the Dutchman, whose stultifying brand of football had not only created many enemies, but also resulted in a disappointing 5th place in the Premier League.

As former chief executive and non-executive director David Gill admitted, it was “undoubtedly a season of under-achievement… given the investment that was made.” This was a reference to van Gall splashing out over £250 million in a vain attempt to successfully rebuild an aging squad.

"Partial to your Ibracadabra"

And so José Mourinho duly arrived in May 2016, an appointment that had seemed almost inevitable once he had left Chelsea, albeit in less than happy circumstances. The Portuguese may not be everyone’s cup of tea, but he has delivered trophies at every club that has employed him.

Even for the “Special One”, United will be a major challenge, so he has wasted little time in adding more expensive recruits, including the talented Paul Pogba from Juventus for a record-breaking £89 million transfer fee just four years after he had moved in the opposite direction for a notional sum.

Such expenditure is testament to United’s amazing ability to generate cash. The club may not be firing on all cylinders on the pitch, but it is going great guns off it, as evidenced by the excellent 2015/16 financial results. As executive vice-chairman Ed Woodward put it, “Our record fiscal 2016 performance reflects the continued underlying strength of the business.”

Indeed, United reported a very healthy profit before tax of £49 million, which represented a dramatic improvement from the previous year’s £4 million loss. Profit after tax was somewhat lower at £36 million, as there was a £12 million tax expense, compared to a £3 million credit in the prior year, though this was still a great result.

The main reason for the improvement was revenue increasing by £120 million (30%) from £395 million to £515 million, the first time that a British club has broken through the £500 million barrier. All revenue streams grew, though commercial was the star performer, rising £71 million (36%) from £197 million to an incredible £268 million, primarily due to the commencement of the new Adidas kit agreement from 1 August 2015, which included a step-up in minimum guaranteed revenue and a contribution from several businesses previously operated by Nike.

Broadcasting and Match Day were both positively influenced by the return to European competition, rising by £33 million (30%) to £140 million and by £16 million (18%) to £107 million respectively. In contrast, profit from player sales was £33 million lower, as it swung from a £24 million profit the previous season to a £10 million loss this season.

"Many happy returns"

The impressive revenue growth was partly offset by corresponding increases in the costs. The wage bill rose by £30 million (15%) to £232 million, mainly due to the renewal of existing player contracts, couple with a salary uplift due to participation in UEFA competition. Similarly, other operating expenses increased by £19 million to £91 million, primarily due to retail and merchandising costs being recognised in-house, plus an increase in match day costs due to additional home games.

Exceptional items were £13 million higher at £15 million, including a £7 million impairment charge to write-off the value of German international Bastian Schweinsteiger, who is “no longer considered to be a member of the first team playing squad.”

There was also an £8 million pay-off to van Gaal and other members of his coaching staff, which means that United have now paid out a total of around £16 million to departing managers post-Ferguson.

However, profits were boosted by player amortisation being £12 million lower at £88 million, while net finance costs were cut by £15 million (43%) from £35 million to £20 million, due to the reduction in interest payable on the secured loan term facility and senior secured notes following the refinancing in June 2015.

In 2014/15 United were one of only six clubs in the Premier League to make a loss, as most clubs have become profitable thanks to the growth in the TV deal. United’s smallish £4 million deficit was essentially due to their lack of European competition (and money), but 2015/16 represents a return to the upper reaches of the top flight, at least in financial terms.

Although United are the first Premier League club to publish their 2015/16 accounts, their £49 million pre-tax profit would only have been surpassed by Liverpool’s £60 million in the previous season.

This performance is even more impressive considering that United’s profit was delivered despite making a £10 million loss on player sales, primarily as result of Angel Di Maria’s move to Paris Saint-Germain just one season after shelling out £60 million for the Argentine winger, though they probably also lost money on Robin van Persie’s move to Fenerbahce. Profits would have been recorded on the sale of Javier Hernandez to Bayer Leverkusen and Jonny Evans to WBA.

To place United’s loss into context, Liverpool’s 2014/15 £60 million profit was very largely due to making £56 million profit on player sales (Luis Suarez to Barcelona). Similar large sums were made that season by Southampton £44 million, Chelsea £42 million and Arsenal £29 million.

United now seem poised to report regular large profits, averaging £45 million profit in the last two seasons when they qualified for the Champions League: £41 million in 2014 and £49 million in 2016.

The last time that they reported a large loss was 2010, when the £44 million deficit was largely caused by £109 million of financing costs. This was actually lower than the £117 million of financing costs the previous season, but was partly compensated by the £80 million profit on player sales, almost entirely from Cristiano Ronaldo’s move to Real Madrid.

Since that mega deal in 2009, United have only once generated more than £20 million profit from player sales. That was in 2014/15, which included the transfers of Danny Welbeck to Arsenal and Nani to Fenerbahce, the returns of Shinji Kagawa to Borussia Dortmund and Wilfried Zaha to Crystal Palace, plus Michael Keane to Burnley and Bebé to Benfica.

However, this is not a major revenue-generating activity for Manchester United, though Ed Woodward has drawn investors’ attention to China as “another useful market if we’re looking to sell any players.” Anyone know if Wayne Rooney likes Chinese food?

Of course, United’s profits would have been substantially higher if the club did not have to bear the financing costs of the Glazers’ leveraged buy-out. In fact, over the last eight years they have made total operating profits of £526 million (including £138 million from player sales), which have been very largely wiped out by net financing costs of £480 million.

The good news is that the cost of this debt has been reducing following a series of refinancings, falling from that horrific £117 million in 2009 to “only” £20 million in 2016 (£13 million in cash terms). Coupled with the club’s explosive revenue growth, this means that financing costs have been cut from 42% of revenue in 2009 to just 4% last season.

That’s obviously great for United, but a little frightening for their rivals, as the club’s capacity to produce cash has never been in doubt. The bill for the Glazers has to an extent placed a break on United’s ability to spend, but this is not such a major factor anymore (even with the addition of dividends).

Accountants often use a metric called EBITDA (Earnings Before Interest, Depreciation and Amortisation) to assess a club’s underlying profitability and especially how much cash it produces. On this basis, United have been the undisputed champions over the years, but they have moved into another league in 2016, as their EBITDA shot up from £120 million to a deeply impressive £192 million.

To place this into context, the next highest EBITDA reported by other Premier League clubs in 2014/15 was Manchester City’s £83 million, more than £100 million lower. As another comparison, Arsenal’s EBITDA of £63 million is only around a third of United’s.

It is true that United are projecting a reduction in EBITDA in 2016/17, due to only competing in the Europa League, but their estimate of £170-180 million is still extremely good, driven by another increase in revenue to £530-540 million (mainly from the new Premier League television deal).

United’s revenue has grown by £152 million (42%) in the last three seasons, mostly due to the new deals with Chevrolet and Adidas, which have led to £69 million (76%) growth in sponsorship and £59 million (152%) in retail, merchandising and product licensing. There has also been a £39 million (38%) increase in broadcasting income, linked to the last TV deal in 2014.

However, it’s not been all good news, as mobile and content revenue has fallen by £12 million (53%) since 2013, due to the expiration of a few mobile partnerships, while match day income has also slightly reduced by £2 million (2%).

The 2015/16 revenue growth to £515 million has really distanced United from their domestic rivals. This is almost 50% higher than the closest challenger, Manchester City, though their £352 million is admittedly a 2014/15 figure.

The difference between United and the next clubs in the revenue league is the best part of £200 million: Arsenal £329 million (gap £186 million), Chelsea £314 million (gap £201 million) and Liverpool £298 million (gap £217 million). That is an astonishing competitive advantage for United and helps explain why they can drop £89 million on Pogba without batting an eyelid.

United stood at third place in the Deloitte 2015 Money League with revenue of £395 million, only behind Real Madrid £439 million and Barcelona £427 million, but ahead of Paris Saint-Germain and Bayern Munich. This was a notable achievement, as they were the only club in the Money League top ten not to benefit from Champions League participation, which demonstrates the underlying strength of United’s business model.

In fact, it is likely that United’s £515 million revenue will top the 2016 Money League when it is published, assuming that Deloitte maintain their approach of using the average exchange rate throughout the year. At that average rate of €1.34 to the £, Real Madrid’s €620 million is equivalent to £464 million, while Barcelona’s €612 million would be £458 million.

Of course, if we were to use the latest, post-Brexit Euro rate of 1.17, then it would be a different story: Real Madrid £530 million, Barcelona £523 million. Note: Barcelona announced total revenue of €679 million, but that included €67 million from player sales, which should be excluded for a like-for-like comparison.

If we compare the revenue of the other nine clubs in the Money League top ten, we can see United’s issue in 2015, namely the lack of Champions League TV money. This meant that United’s broadcasting income was lower than seven clubs, including Juventus who earned a staggering €89 million from Europe’s main tournament.

United were well ahead of all most clubs in terms of match day income, even without European competition, while they were only outperformed by two clubs commercially: Paris Saint-German, whose £226 million massively benefited from the French club’s “friendly” agreement with the Qatar Tourist Authority, and Bayern Munich, whose £212 million emphasised their commercial dominance in Germany.

Of course, those are the previous season’s figures, so it is entirely possible that United’s commercial income of £268 million is the highest in 2015/16. This now accounts for 52% of United’s total revenue, up from 24% in 2009. The importance of match day income, even though it is above £100 million, has consequently diminished from 41% to 21% over the same period.

Commercial activity is particularly important to the two Manchester clubs, accounting for around half of their revenue, compared to 39% at Liverpool, 34% at Chelsea, 31% at Arsenal and 30% at Tottenham.

United’s commercial income of £268 million in 2015/16 is evidence of the club’s ability to monetize its global brand through three revenue streams: (a) sponsorship – up 3% to £160 million; (b) retail, merchandising, apparel and product licensing – up 207% to £97 million; (c) mobile and content – up 4% to £11 million.

Domestically, United’s £268 million is around £100 million more than Manchester City’s £173 million (2014/15), though it will be interesting to see how their “noisy neighbours” have progressed last season. To further place this in perspective, it’s around the same as the three leading London clubs combined (Chelsea £108 million, Arsenal £103 million and Tottenham £60 million)

To give a better idea of United’s commercial might, £268 million is higher than the total revenue at all but nine of the Money League clubs in 2014/15, ahead of the likes of Juventus, Borussia Dortmund and Tottenham.

There’s an old investment saying that “elephants don’t gallop”, but United’s growth rate of 128% since 2012 outpaces all their rivals. Admittedly, those clubs could also grow more in 2015/16, but Arsenal (the team with the next highest percentage growth) would have to increase their commercial revenue by £17 million to £120 million to match United’s growth rate, which seems unlikely based on their half-year accounts.

This year’s figures include the new kit supplier agreement with Adidas, which is worth £750 million over the next 10 years, i.e. £75 million a year. This is £50 million higher than the previous Nike deal. Not only that, but it has allowed the club to take control of various activities, e.g. they have brought the management of the Old Trafford Megastore in-house and signed a number of lucrative licensing deals.

There are success clauses are built into this contract, e.g. if United fail to participate in the Champions League for two or more consecutive seasons, then the payment for that year would reduce up to 30%, i.e. £22.5 million, though this would be spread over the remainder of the contract. On the other hand, success in the Premier League, FA Cup or Champions League would bring an additional maximum of £4 million.

Nevertheless, it is still an astonishing deal, significantly higher than the £30 million agreements at Arsenal (PUMA) and Chelsea (Adidas), though Chelsea will switch to Nike for £60 million from the 2017/18 season.

At the time it was signed, United describe theirs as the “largest kit manufacture sponsorship deal in sport”, though it has since been reportedly overtaken by new agreements signed by Barcelona (Nike) and Real Madrid (Adidas), which would be worth £125 million and £115 million respectively (at the current exchange rate).

In England, United’s ability to “extract value from their sponsorship deals is almost unprecedented, as seen by the seven-year shirt deal signed with General Motors (Chevrolet) running to the end of the 2020/21 season worth a total of $559 million. As GM paid United $18.6 million in each of the 2012/13 and 2013/14 seasons for “pre-sponsorship support and exposure”, the remaining $521.8 million works out to $74.5 million a year.

At the 30 June 2015 $ rate of 1.57, that was equivalent to £47 million a year, a figure that has been widely reported, but at the 30 June 2016 rate of 1.33, it is worth £56 million, which is considerably more than the next highest English shirt sponsorship deals, namely Chelsea (Yokohama) £40 million and Arsenal (Emirates) £30 million.

United’s previous shirt sponsors, Aon, have not completely exited the scene though, as they will pay for the privilege of being United’s training kit partner until 2020/21 including renaming the training facilities at Carrington as the Aon Training Complex.

"A prisoner of the past"

On top of that, United continue to announce new sponsorships, 25 in the last two seasons alone: 11 global sponsors, 9 regional sponsors and 5 financial services, MUTV and telecom partnerships.

United also earn good money from promotional tours and exhibition matches, e.g. £10 million in 2015/16, £13 million in 2014/15. However, the Glazers have drawn the line at selling naming rights to the Old Trafford stadium, which are potentially worth £20 million a year.

The only potential fly in the ointment is if United’s lack of success on the pitch persists, especially if the football is not in line with their swashbuckling tradition. Indeed, last season Adidas chief executive Hubert Hainer, while boasting that shirt sales had exceeded expectations, had a dig at the team’s playing style, which was “not exactly what we want to see.”

United’s match day revenue rose 18% (£16 million) from £91 million to £107 million in 2015/16, as they played 8 more games at home, largely arising from a return to European competition (4 Champions League, 2 Europa League). As a result, they have once again overtaken Arsenal’s £100 million.

These two are a long way ahead of other English clubs, e.g. Chelsea £71 million, Liverpool £51 million, Manchester City £43 million and Tottenham £41 million, which helps explain why they are all investing in stadium development/expansion.

United’s average attendance of 75,000 is far higher than any other English club (Arsenal being the nearest at just under 60,000), with Old Trafford being the largest football club stadium in the UK. Season ticket prices were frozen for the 2016/17 season, which means that prices have been held for five consecutive seasons. That said, United have the most expensive season tickets outside London.

The club places great emphasis on its premium seating and hospitality facilities in order to maximise match day revenue, as can be seen by Old Trafford (“the theatre of dreams”) having 154 luxury boxes, approximately 8,000 executive club seats, 15 restaurants and 4 sports bars. In this way, in 2015/16 United generated around £34 million from hospitality (compared to £52 million from gate receipts).

United’s share of the Premier League television money was flat at £97 million in 2015/16. They actually earned £6 million more than champions Leicester City, as the smaller merit payment for finishing four places lower was more than offset by higher facility fees for having 11 more games broadcast live. This again is down to the United brand.

This is even before the increases from the mega Premier League TV deal in 2016/17. Based on the contracted 70% increase in the domestic deal and 40% increase in the overseas deals (per United’s press release), the top four clubs would receive around £150 million, while even the bottom club would trouser around £95 million.

Although this is clearly great news for the clubs, it is somewhat of a double-edged sword for the elite, as it makes it more difficult (or at the very least more expensive) to persuade the mid-tier clubs to sell their talent, thus increasing competition.

The other main element of broadcasting revenue is European competition, though United have not done so well here recently. They have only got as far as the quarter-finals once in the last five years (under the much maligned Moyes in 2013/14), while not qualifying at all in 2014/15.

UEFA have not yet published the revenue distribution details for 2015/16, but my estimate for United’s share is €40 million, based on the increases in the 2016 to 2018 cycle, namely higher prize money plus significant growth in the TV (market) pool, thanks to BT Sports paying more than Sky/ITV for live games (worth €125 million vs. €94 million, per United’s 20-F submission).

United’s 2015/16 Champions League payment was partly influenced by their progress in the tournament, but was to an extent compromised by their 4th place finish in the 2014/15 Premier League. This is because half of the market pool is allocated based on the finishing place in the previous season’s domestic league: 1st place 40%, 2nd place 30%, 3rd place 20% and 4th place 10%.

The value of Champions League qualification is clear, especially if it is compared to the Europa League, where the most earned by an English club in 2014/15 was Everton’s €7.5 million.

Mourinho has admitted that the Europa League is “not a competition that Manchester United wants” from a sporting perspective, but Hemen Tseayo, United’s head of corporate finance, outlined the damage in financial terms. He estimated that the Europa League is worth around £30 million less than the Champions League in broadcasting income (plus another £5-6 million in gate receipts), though this is mitigated by lower salary/bonus payments and cost of staging games.

United’s wage bill increased by 15% (£30 million) from £203 million to £232 million, primarily due to player contract extensions and an uplift in salaries due to participation in the Champions League, though the wages to turnover ratio was reduced from 51% to 45% following the surge in revenue.

Not only is this the the lowest wages to turnover ratio at United since 2009, but is by some distance the smallest in the Premier League, the closest challengers being Newcastle and Tottenham with 51%. Put another way, United’s wages to turnover ratio is the best in the top flight, even though their wage bill is the highest.

Their 2015/16 wage bill of £232 million has overtaken Chelsea’s £216 million from the previous season and is around £40 million more than Manchester City £194 million and Arsenal £192 million.

Of course, United fans will be quick to point out that City’s wage bill might well have gone up in 2015/16. They will also have noted that some of City’s decrease from the English all-time high of £233 million in 2012/13 is due to a restructure whereby some staff are now paid by group companies with the costs included in external charges, as opposed to wages.

In any case, United’s wages are way ahead of most Premier League clubs with some of the nearest challengers (in 2014/15) being Liverpool £166 million, Tottenham £101 million, Aston Villa £84 million and Everton £78 million. For context, United’s wage bill is about the same as Tottenham, Everton and Leicester City combined.

The Premier League’s Short Term Cost controls restricted the annual player wage cost increases to £4 million for the three years up to 2015/16, then £7 million a year for the next three-year cycle to 2018/19 – except if funded by increases in revenue rom sources other than Premier League broadcasting contracts. In other words, United are fine here, due to their massive commercial revenue growth.

Although there is a natural focus on wages, other expenses also account for a considerable part of the budget at leading clubs. Excluding player amortisation, depreciation and exceptional items, United’s other expenses increased in 2015/16 by £19 million (26%) from £72 million to £91 million, due to retail and merchandising being recognised in-house, plus higher match day costs in line with more home games.

This is again the highest in the Premier League, ahead of Chelsea £83 million, Manchester City £76 million and Arsenal £74 million, though there have been media reports that the Glazers have demanded cuts of 15% in most departments, including the academy.

Another cost that has had a major impact on United’s profit and loss account is player amortisation, which is the method that football clubs use to account for transfer fees. As a result of the recent huge increase in spending, player amortisation has shot up from £38 million in 2012 to £88 million in 2016. Although this is £12 million lower than the previous season’s £100 million, it should shoot up again next year following this summer’s splurge.

As a reminder of how this works, transfer fees are not fully expensed in the year a player is purchased, but the cost is written-off evenly over the length of the player’s contract – even if the entire fee is paid upfront. As an example, Pogba was reportedly bought for £89 million on a five-year deal, so the annual amortisation in the accounts for him would be £18 million.

Unsurprisingly, United's player amortisation is now the largest in the Premier League, though City are likely to be close to this amount when they publish their 2015/16 accounts. Basically, those clubs that are regarded as big spenders logically have the highest amortisation charges, e.g. City £70 million and Chelsea £69 million, while Arsenal’s relatively restrained spending has left them with £54 million of player amortisation in 2014/15.

United have really ramped up their spend in the transfer market in the last few seasons, splashing out huge sums to compensate for the years of austerity (relatively speaking). In essence, Ferguson’s genius at working on a tight transfer budget delivered great results, but also resulted in a squad that needed to be substantially upgraded by his successors.

In the five years between 2006 and 2011, United’s average annual net spend was only £3 million (gross £33 million), a paltry sum for a club of this magnitude, though this was obviously impacted by Ronaldo’s £80 million sale to Real Madrid. However, in the next three years the average net spend rose to £52 million (gross £61 million), and then accelerated again to £92 million (gross £133 million) in the last three seasons.

That’s around £400 million in the last three seasons, as United has recruited expensive new blood, including (deep breath) Paul Pogba, Eric Bailly, Henrikh Mikhitaryan, Zlatan Ibrahimovic, Anthony Martial, Memphis Depay, Morgan Schneiderlin, Matteo Darmian, Bastian Schweinsteiger, Angel Di Maria, Ander Herrera, Luke Shaw, Marcos Rojo and Daley Blind.

After the Pogba deal, Mourinho observed, “sometimes in football things happen and the club breaks the record, but this is only possible at clubs like Manchester United” in a thinly veiled jibe at Arsène Wenger and Jürgen Klopp.

Despite this massive outlay, United’s net spend of £275 million in this period was still beaten by Manchester City’s £299 million, though it was well clear of Arsenal £165 million and Chelsea £123 million. As Woodward explained, “there’s a bit more pressure on some of the bigger clubs to bring in top players, verging on world class, that are going to hit the ground running.”

Perhaps the most eye-opening signing was Martial with United paying an initial £38.5 million (€50 million) for the 19-year old forward plus a potential £23 million (€30 million) in add-ons. These comprise three bonus payments of €10 million dependent on the following achievements: 25 goals, 25 French caps and being shortlisted for the Ballon d’Or award during his time at Old Trafford.

Woodward has cautioned that the club may reduce its spending in future: “As a club we will always invest in the squad to the extent that we feel that we need to, so that we are challenging for titles, but this sustained level is probably relatively high compared to what is needed.” However, as we have seen, United generate more than enough cash in future for similar purchases – if they want to do so.

United’s gross debt rose by £79 million from £411 million to £490 million (the highest since 2010), largely due to the impact of exchange rate movements on the USD denominated debt (1.57 to 1.33). This comprises $425 million of Senior Secured Notes (3.79%, repayment 2027) and a $225 million Secured Term Facility (1.25-1.75%, repayment 2025).

However, net debt only rose by £6 million from £255 million to £261 million, as cash balances increased by £73 million from £156 million to £229 million.

The 2015 refinancing increased the debt, but extended the repayment dates with a lower interest rate, thus reducing the annual financing costs to £20 million, compared to £35 million the previous year (including a premium paid for the refinancing).

Despite the reduction, this is a lot more than any other Premier League club with Arsenal being the only other club with a double-digit interest payment of £13 million. To place that into perspective, Manchester City, Tottenham, Everton and Liverpool all had net interest payable of only £4-5 million.

Although these interest payments are clearly manageable, United supporters would prefer this money to be spent on further strengthening the squad. Former chief executive David Gill famously said that “debt is the road to ruin” before the Glazers purchased the club, which has not exactly proved to be the case for United, but it has undoubtedly been damaging to their prospects.

The only other Premier League club with anything like the same levels of borrowing is Arsenal, whose £232 million represents the debt incurred for the construction of the Emirates Stadium. There were just two other Premier League clubs with debt above £100 million in 2014/15, namely Sunderland £141 million and Newcastle United £129 million.

United’s business model only works as they are a veritable cash machine, once again evidenced in 2015/16 when they generated £201 million of cash from operating activities. They then spent a net £100 million on player registrations (£138 million of purchases less £38 million of sales), slightly more than the previous season’s £97 million. That does not even include this summer’s purchases with a note in the accounts stating that a further £160 million was spent on acquiring players.

In addition, £13 million went on interest payments and £20 million on dividends. There was also £5 million of infrastructure investment, mainly to refurbishment work at Old Trafford and the Aon Training Complex, and a £2 million tax payment. As a result, cash rose £61 million before being boosted by £13 million of FX gains to give a net increase of £73 million.

In the last seven years United have generated an incredible £1.25 billion of cash: £936 million from operating activities plus £318 million from share issues. Just over £400 million (32%) of this has been spent on player purchases and £68 million (5%) on capital expenditure, but the majority £671 million (54%) has been used to finance the Glazers’ loans: £424 million of interest payments and £247 million of debt repayments.

The good news is that there has been a clear swing in the last three years from using cash to finance debt to player purchases – “our strong commitment to invest in our squad”, as Woodward put it. In the period 2010-14, United spent an average of £158 million each year on financing debt, compared to just £32 million on players. However, in the last 3 years, the average financing expenditure has fallen to £23 million, while player spend has risen to £92 million.

This is partly due to annual interest payments being reduced to £13 million, though this has been replaced by an annual dividend of £20 million, including £2.5 million to each of Malcolm Glazer’s six children (amounting to £15 million).

Although this is rather galling to the club’s supporters, there is certainly enough cash available in the club’s coffers with United’s £229 million now just ahead of Arsenal’s £228 million in 2014/15, but miles above all other Premier League clubs, e.g. the next highest balances were Manchester City £75 million and Newcastle United £48 million. That said, there are high amounts owed for transfer fees, amounting to £156 million, up from £115 million in 2015.

In conclusion, Manchester United’s financial status is the envy of almost every other football club on the planet. They are a commercial powerhouse generating the highest revenue and cash in England (possibly the world, depending on exchange rates), which means that they can spend huge sums on player transfers and wages.

"Left to my own devices"

As Ed Woodward said, “The club is on target to achieve record revenues in 2017, even without a contribution from the Champions League. This strong financial performance has enabled us to invest in our squad, team management and facilities to position us to challenge for, and win, trophies in the coming years.”

Success on the pitch has to be the club’s top priority. There’s no doubt that money is available for United to attract star names to Old Trafford, though ironically their shining light in recent times has been local lad Marcus Rashford, an academy graduate who cost nothing.

"At the height of the fighting"

For a club of United’s size and history to be struggling so badly is a major surprise, especially as the board has loosened the purse strings since Ferguson’s departure. Of course, money doesn’t guarantee success (see Leicester City’s triumph last season), but it is normally a fairly reliable indicator, so the onus is now on the team to deliver.

Woodward described José Mourinho’s appointment as “a reflection of the club’s determination to return to the pinnacle of our sport”, but at the moment this looks a long way off. The new era has had a shaky start, not least in comparison to Manchester City, where Pep Guardiola has already got his team playing some dazzling football.

Ultimately, the question remains: can Mourinho succeed where Moyes and van Gaal have failed and lead United back to former glories? One thing is for sure, if his reign does end in disappointment, it is unlikely to be down to a lack of money.