Manchester United don't need to sell stars like Wayne Rooney

08 October 2010 05:01
Manchester United chief executive David Gill insists there is no pressure to sell star players such as Wayne Rooney despite the club making losses of £83.6million.

Gill said the club would still prefer to have 'Cristiano Ronaldo on the pitch than £80m in the bank' as proof of their desire to keep players.

Although United's group operating profit topped £100.7m, after player-related costs, interest payments and a number of expensive one-off costs related to the bond issue, overall there was a record loss for the club.

Dark clouds: The 'waste' of money at Old Trafford is certain to anger fans

ACCOUNTS EXPLAINEDUnited have had a record turnover of £286m leading to a group operating profit - before player costs, interest payments, and one-off fees - of £100.7m, also a record.After all the interest payments and costs have been deducted, United return a record loss of £83.6m. Of this, around £67m are one-off payments related to the bond scheme launched in January.United chief executive David Gill says if one-off payments and other accounting practises are not taken into account, the club is running at a £25m profit.Interest payments on the £517m debt are £40m a year. Gill says these are comfortably covered by the club's income.United's wage bill has gone up to £131.7m from £123m, a seven per cent increase. Chelsea's is £142m, Manchester City's £133.3m, Arsenal's £110m. The wages are 46 per cent of turnover - the lowest ratio among the Premier League's leading clubs.The Glazers have not taken any money out the club to pay off their £200m high-interest PIK debts - they could have taken up to £70m. Instead United have £165m in the bank, a chunk of which is available to Sir Alex Ferguson if he needs it.United are confident they comply with UEFA's financial fair play rules when clubs can only spend what they earn because despite the record losses, UEFA do not include some figures such as depreciation.Gill said the accounts released today were 'very good' withexcellent revenues, and said there should be no concern about Unitedgoing down the same road as Liverpool, whose American co-owners havestruggled to finance their ownership.

The United chief executive did admit the figures could be confusingto fans who saw a record turnover of £286m for the year ending June2010 contrasting with the record losses of £83.6m.

For the previous year the club had returned a net profit of £48.2mthanks to the sale of Ronaldo, but Gill said the Glazer family who ownUnited had not pushed for that move, nor would they for any otherplayer. He added that United's balance sheet includes £165m remainingin the bank if Sir Alex Ferguson wants to buy new players.

Gill (right) said: 'We are not a club that needs to sell. We have money inthe bank so there is zero pressure on that, no pressure at all to sellany star player whether it is Wayne Rooney or X,Y or Z. I cancategorically say that.

'There was no desire at all from anyone at the club to sellCristiano - he wanted to go and as a result we managed to extract aworld record fee.

'These philosophy is to retain and attract the best players. We have£165m in the bank but in some ways we would prefer to have £80m in thebank and Ronaldo on the pitch.'

Gill said part of the losses related to one-off payments after bank loans were turned into a bond, totalling £47m.

He added that if 'goodwill' losses - an accounting practice relatingto the original takeover - of £35.2m, and foreign exchange losses of£19m (which should be recovered next year) and depreciation areignored, United would have an actual profit of about £25m.

Gill added: 'There are very good results for the club with recordshere, there and everywhere but they are complicated with non-cash itemsand exceptional one-off hits.'

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Fans' group have raised concerns that there could be parallels withthe Liverpool crisis, where the holding company may be forced intoadministration next week over unpaid debts following a leveragedtakeover, and the Glazer ownership of United. Gill however insistedthat was not the case.

He added: 'I can't speak for any other club but the United fansshould not be concerned, we have a long-term financing structure inplace, excellent revenues that are growing, we are controlling ourcosts - total wages are 46% of turnover - and we can afford theinterest on our long-term finance.

'In our opinion if something changed in the ownership this club willsurvive and continue - it is covering the financing cost more thanadequately.

Taking a stand: Fan anger at the Glazer regime has manifested itself into protests over the last 12 months

'We still have cash to invest in players and to give good contracts to players and we are comfortable with the business model.'

The figures show that United's wage bill rose by seven per cent to £131.7m, while United's overall debt rose to £521.7m.

It may also appease some critics that according to the figures, theGlazers have not taken any money out of the club to pay any of their£200m-worth of PIK notes that are now attracting interest at 16.25 percent.

Gill added: 'They have retained that money in the bank and it'sthere for Sir Alex if he needs it for players, and for investing in thetraining ground and the stadium.'

Not for sale: United won't have to sell Rooney

United are confident that they will meet UEFA's financial fair playrules despite the figures because not all the paper losses - such asdepreciation - are included by UEFA when they calculate whether clubsare only spending what they earn.

The Manchester United Supporters' Trust (MUST) claimed the results showed the clock was ticking for the Glazer family and the club, and highlighted how well off United would be without the interest payments.

A MUST spokesman said: 'The financial results today continue to demonstrate the tremendous revenue generated by Manchester United - directly or indirectly through the unparalleled loyal support the club receives. Sadly those supporters are let down by owners who continue to extract millions from our club. Imagine how successful we could be without the millstone that is the Glazers' ownership.

'Under a supporter ownership model, or even the debt-free plc model prior to the Glazers takeover, this huge revenue stream could largely bereinvested in the football club (squad, stadium, ticket prices) rather than being leached out by the Glazers.'

MUST claimed the club was now 'extremely vulnerable' if there was any fall in revenue.

The MUST spokesman added: 'With greater competition domestically it is going to become increasingly expensive just to maintain a place in the Champions League and the huge debt burden makes the club extremely vulnerable to any dip in revenues such as that which might be triggered by a decline in on-the-pitch performance.

'When Sir Alex retires the chances of maintaining anything like the same level of success look remote without massive investment. So the clock is ticking for the Glazers - and for the supporters too.'

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Source: Daily_Mail