Sir Alex Ferguson’s assertion that Manchester United’s summer transfer policy will focus on targeting younger, cheaper players who maintain a resale value, exposes the financial lie which both manager and board have perpetuated in the past year. The oft-repeated insistence that the transfer market “has no value” made a mockery.
The Scot’s revelation that United will spend only on players who can be sold at a later date says much of the club’s financial thinking. Firstly, that quality is secondary to financial considerations. Secondly, that United is now – by policy – a selling club.
“We prefer to do these kind of signings,” explained Ferguson after 21-year-old Javier Hernández’ signature this week.
“There is the odd exception when we get a mature player, like Berbatov. He was 27 when he signed.
“When you sign a player for that kind of money you know there is not going to be a resale value if he stays with you for six years. That is always in the back of your mind.”
For United supporters it’s a concerning equation both from a footballing and financial point of view. The policy only makes financial sense if acquired players are sold on at a later date.
More worrying still, United’s policy is logical on the pitch only if younger players develop into the finished product. That comes with no guarantee while the club continues to ignore established talent, such as Valencia’s David Villa who will now play for Chelsea or Manchester City next season.
United has found mixed success with those players brought to the club under the policy in recent seasons. Cristiano Ronaldo is held up as the poster boy of buy-to-sell but he is, arguably, the only success.
The signings of Nani and Anderson, for example, at more than £34 million between them are yet to realise full value on or off the pitch. Reports suggest that United turned down an £8 million winter move from Juventus for the Portuguese winger, while Anderson tried desperately to leave on loan.
At the cheaper end of the scale Gabriel Obertan, Mame Biram Diouf and Zoran Tošić, bought for a joint £15 million, are little more than expensive reserves. Meanwhile virtual freebies Federico Macheda, the da Silva brothers and Ritchie de Laet may prove good value but there are no certainties.
It is telling that United’s move for Hernández saw the light as much for the financial consequences of missing out on the player as his current qualities, according to Ferguson.
“The feeling was to wait because he was young,” said the Scot.
“But then he got into the national team, which created a problem for us because if he went to the World Cup and did well, there would be a danger of losing him.
“I sent Jim Lawlor, our chief scout, over there for three weeks to get some background on the boy and watch him. He filed a fantastic report on the boy and said we really needed to do something.”
Given the fee, which could rise from an £8 million base to more than £10 million, Ferguson hopes Hernández makes the kind of instant impact that has not been forthcoming from Obertan or Diouf.
The same can be said of £12 million, 21-year-old defender Chris Smalling, signed from Fulham in January.
The numbers now suggest United’s transfer policy is even more restricted than previously thought; shopping at the bottom of the market among its European peers. It’s a point amply made last summer when the club refused to increase an €25 million bid for 22-year-old Karim Benzema.
After all, United’s business model works only if the club sells players, with annual financial losses now built in. Red Football Joint Venture Ltd, United’s parent company, posted a profit of £6.4m in 2009 on debts of £716m. The year the club sold Cristiano Ronaldo for £80 million.
United made a loss of £47 million in 2008.
While United remains competitive this season laregely due to the extraordinary exploits of Wayne Rooney, it is perhaps only fair to ask whether United could have concluded a bid for the striker under the Glazer regime.
Ferguson and United supporters alike are lucky that the former Evertonian joined a year before the Americans’ buyout.
20 thoughts on “Transfer policy exposes Reds’ finances”
It is what it is, until we can get a solution to the financial situation, we back the team, established superstars or potential ones! We are doing all right in spite of the sales last year. We had bad luck with injuries and we are definitely going to add to the squad. I am pretty positive about next season, looking forward to welcoming back a lot of players and hopefully a couple of new ones!
To be fair, we have always invested in younger and relatively not so established players. Legends like Giggs, Scholes etc were part of the youth setup. The experience of buying experienced players hasn’t been too favorable, big buys like Veron and Berbatov. Ronaldo was bought as an emerging player and turned into one of the world’s finest. Also, when you are taking a chance on such younger players, there are always going to be a few failures, but the joy is in finding someone truly world class.
Also with the Benzema example, it was always clear that the player preferred Madrid.
I like to know why they are saying the player had no resale value? Why do we need to see this when buying players like Villa? Why cant we buy him and let him have his last contract with us and he can retired at our club. Why must we see resale value? This thing is getting the nerve out of me.
How often have united spent big money on older players in the past? The club has generally bought younger players who they can mould.
Also proven talents elsewhere doesn’t mean they will work in the pl. Look at Veron for example. Why spend 40mill plus on Villa who is 29 and may not even fit in either the pl or like Berba struggle to gel in the united setup
Do we really want the club to blow money for the sake of it? Additionally the club ATM can only buy under 21s really. Due to the new pl squad rules. To buy a top player the club needs to sell first because we already have about 4 senior players too many (25 player squad limit next season) so while people may want the club to buy villa silva ribery and others they can’t without knowing they can offload players first
Oh and the club didn’t make a loss in 2008. The holding company did but the club made a profit and a massive profit at that
Fair enough points but when it comes to United’s finances there is no distinction between club and holding company. Absolutely none.
Good article again. If you add all the fees paid for squad players we might have been able to buy a decent starter for the same money.
The fees for Smalling, Hernandez, Obertan and Diouf add up to about £25-30 million.
We have enough squad players anyway, and will always be able to bring through enough fillers through the youth ranks.
Benitez made the same mistake, buying quantity not quantity. Perhaps Fergie has been stung by the Berbatov and Anderson purchases, so now won’t buy big?
Odd he should buy a forward too when we are playing 4-5-1 most of the time. Rooney, Berbatov, Owen, Macheda, Welbeck, Diouf – unless this lad is something special it seems a bit odd. South Americans percentage wise seem less likely to succeed in England too.
seriously? This same, boring article? United have always had a youth policy before the Glazers came in. We paid nowt for Giggs, the two Nevilles, Lee Sharp, Scholes, and Beckham.
Fergie bought Ole, Blomquist, Cruyff, Fortune, Evra, Vidic, Rio, Kanchelskis, Park, Nani, Ando, Keano (remember he was only 22 when we got him), Ince (22), Cole (24), Rooney and so on who where all under 25 when we signed them. Dwight Yorke, Sherringham, Stam, Veron and Berba are some of the few glaring exceptions that i can think of. A lot of the over 25’s where flops.
It’s laughable how the media has corrupted people’s memories. Fans deserve the truth but articles like this fail to provide it. It’s just more of the same Glazer’s out stuff which is all well and good but not accurate.
Come on, trust Fergie not the papers. The papers also state that villa wants 200,000 quid a week to leave Spain. For a player entering his 30’s at the end of next season? And you want us to pay 40 mill, plus ten mill in wages for him? rather not buy him, thanks.
This came from Ferguson’s mouth – “Resalve value is always in our minds when we buy a player”. Resale value is only relevant if United is prepared to sell.
As for youth – Evans, Brown, O’Shea, Fletcher. Four players have made it as regulars from the youth academy in the last 10 years. 10 years! It’s ok to talk about potential – and there’s LOTS of it right now – but potential is only potential.
A lot of that is down to the players, take Gazza vs Rooney as an example, or Nani vs Ronaldo, or Sharpe vs Giggs. A lot of the potential stars fail because of themselves, not the team or training.
I won’t disagree that the youth team has shown little but we have had 4 regulars in 10 years which is better than Arsenal, ‘pool, and chelsea (taking the likes of Cesc out of it who were signed not homegrown, otherwise we can then include Kiko etc).
Out of all the top players available, only Aguerro would be worth spending £40 mill on. Dzeko/huntelaar are overrated, villa too old and we may only get 1-2 good seasons out of him before he wants to go back to spain to retire, Etoo was too costly and old. Silva is maybe too lightweight, Riberry would snub us, Benzema did snub us. Di Maria is potential, £36 mill of potential and is he better than Nani for that?
Who else is there that would make us direct rivals to Barca? It’s our engine room that needs sorting out anyway not the forward line. We need young hungry players, Smalling was the right signing in defence age wise as we have two old elite defenders.
I expect one of Berba or owen to go. Wellbeck will stay on loan, Diouf will be loaned out, and kiko will stay with the new guy as backup. We needed young hungry players to aid the aging squad.
Oh come on resale value has to be considered by ALL clubs when they buy a player. This doesn’t mean they are looking to buy a player and then sell them for profit but more if they don’t make it or end up being surplus how much you can get back to put towards someone else.
Take Villa for example. He will be 30 next season and if he didn’t fit in in England or United which could very well happen the £40mill will be almost impossible to get a decent amount back. Look at Shevchenko, £30mill he cost chelsea and Chelsea couldn’t get any takers for him so they had to loan him and then pay off his contract so he could leave on a free.
Any team that needs to turn a profit just can’t afford to lose so much money on a risk
So ‘ED’, just perhaps you have got it all wrong? United may just be the first club that is making a stand against the grossly inflated transfer fees which currently abound and if so, this could be the start of the end of such fees?
Teams with money cannot keep spending grossly inflated sums upon players which the others who are not so rich, cannot match! OK United, Chelsea or whoever in the big money leagues do not really care about the others but remember when those others hear that a certain big money club is watching one of their own, immediately inflate the transfer fee – and why not?
The downside being to that, is that when they also attempt to buy players, those fees also are inflated!
Sir Alex over the years has brought in young players who have developed into the ‘real thing’ and yes he has made 1 or 2 mistakes along the way but then who’s perfect?
The United finances debate though will continue ad infinitum until either the Glazers get their house in order or they decide to sell to whoever is prepared to underwrite the debts and put United back on an even keel – either way will suit me!
As for the finances deciding who and how much they pay for a player, for me is a complete joke. Sir Alex will always have money made available for players but it will NOT be available for a single player costing £100M!!!
Finally, United now a selling club – when has this ever been the case?
Players who have served their usefulness or for some reason opposed Sir Alex ie Stam, Van Nistelrooy etc have been sold on but NOT because United needed to!- Name me 3 players who have been sold to balance the United books in the last 20 years?
This article attempts to start a debate about United and their finances preventing transfers in at high prices, not that there is any real foundation to the headline but then journalists have to write something don’t they and Manchester United is always a good subject to invoke a reaction!
own goals the 2nd top scorer on the pitch. own goals top scorer off the pitch. 40 million for villa about the same as annual interest charges thanks to glazers. Who also lost 35 mil on interest rate swap last year.
Article is spot on.
@Arijeet – you make a fair point, but as well as the finances, it’s equally dangerous for our future competitiveness that our youth system doesn’t seem to churn out world class talent like it used to. I know it’s a once in a lifetime occurrence that players like Scholes, Giggs,Beckham and the Nevilles come along all at once, but it would be nice to see some real superstars come through the system (in fact Pique was arguably one of these players, but we let him go – which seems even sillier now we’ve had to settle for unproven Smalling.)
This situation is coupled with the fact that our scouting network – Ronaldo aside – is very hit and miss, and I’ve no huge expectation that Hernandez will change my mind. But I hope I’m wrong.
We might be a selling club but it is a reasonable strategy. Expensive players don’t always make the grade. What is the point of your article anyway? Rooney has scored many goals which were served to him on a silver platter by others. I get pissed when some of you demean the contribution of others in the team. Do you want us to behave like real or city and buy mercenaries. I wonder
“behave like real or city and buy mercenaries” ? this is laughable. Do all the current squad play fo rthe love of the club ? or do some of them get paid as well ? Rooney is a life long evertonian, hates mancs (in private at least).
The formula for United success has generally been bring through some quality young players and then add proven big name signings i.e. Ferdinand Rooney.Also add in a few Scandinavians for squad players.
Alot of these players brought from outside of Northern Europe struggle to settle and therefore don’t perform as well. I’m not saying they all do but percentage wise its a bigger risk.
no one knows which player will be a hit or flop. u can find out after u sign those player.
Interesting article but a bit doom and gloom, sort of scare mongering if you ask me. The current ownership is what we’ve got so until there is a change lets just get on with it. Some posters here are correct when they say we don’t usually pay the silly money anyway so why start now. I’ve always taken pride in the fact that “Richness” for want of a better word came to United through success unlike the likes of Chelski who have had success through “Richness” and given the investment in Chelski they should have dominated the PL for a few years but only managed 2 wins and even toward the end of the second Chelski PL win it was becoming obviously that United were getting ready to knock them of there perch which of course they did the nest season.
Whilst I agree that if a player that the manager really wants bocomes available we should do what we can to get him(within reason) I certainly don’t have any desire for us to do a Madrid and just spend for the sake of it and end up with a team of mercenaries who don’t give a toss about the shirt they’ve been given the honour to wear.
A series of events have conspired against us this season regarding injuries. How can you play without Rio/Vida for half the season and not expect there to be a problem. I also reckon it was expected Hargreaves would return to first team action in the first half of the season. Lets not forget that we did offer the money for Tevez but he decided to join our local rivals for reasons best known to himself or simply because the manager didn’t give him enough cuddles and tuck him into bed every night. We tried to get Benzema but he doesn’t want to play for us, fair enough. Take these events into consideration and I feel we’ve done pretty well and if we’d had Rio and Vida all season we would not be looking at 7 league losses for sure either.
The midfield needs a bit of attention but even if it takes a couple of years to rebuild it then it should be worth it in the end. Barca’s dream team looks pretty unstoppable at the moment anyway so its probably a good time to go through a little transition period. Look at the money Madrid threw at the team last summer and what have they got to show for it? At least we have the Carling cup eh? lol!
Sorry for rambling on for so long BTW!
Whether United are now a selling club or not is open to debate.What can not be debated is the fact that,as time passes by,and as long as the Glazers are here,United will continue to be spending frugally in the transfer market.
no money no new players we might end up at 2-3 place !!!!