Manchester United plans to curb enormous transfer spending
After a summer of exorbitant transfer spending, Manchester United executive vice-chairman Ed Woodward has vowed that the club will not repeat the trend of inordinate purchases in future transfer windows.
United announced a £40 million drop in revenue Thursday after missing last year's Champions League following a disastrous 7th place Premier League finish in 2013-14. That compounded with two consecutive summers of reckless spending has left the club in a unusual position.
This summer, over £100 million was spent on Anthony Martial, Bastian Schweinsteiger, Matteo Darmian, Morgan Schneiderlin, Memphis Depay and Sergio Romero.
Last summer, United splashed the cash for Luke Shaw, Ander Herrera, Daley Blind, Marcos Rojo, Angel Di Maria and a loan move for Radamel Falcao, exceeding £150 million spent on transfers, or around £250 million in two summers.
That's not to say that club doesn't make enough money to offset these transfers, with predicted record revenues of £500 million on the horizon and potentially profitable Champions League football in the cards.
Often criticized for his free-spending ways, Woodward appears to have a grasp of the perilous conditions of extravagant transfer windows.
"We have seen a large number of ins and outs in the last two summer windows," Woodward said.
"We were used to more modest numbers. Maybe we will go back to more normalised numbers."
The transfer acquisitions plus current roster equates to staff costs in the area of £203 million during the 2014-15 campaign, which is expected to grow substantially in this calendar year.
Hemen Tseayo, Manchester United head of corporate finance, speculated "We expect total staff costs to be up in the high teens in percentage as a result of Champions League participation."
"We incurred around £97 million in net player cap ex [capital expenditure] and for fiscal 2016 we are committed to around £78 million," Tseayo continued.
In light of recent relaxation of Financial Fair Play rules by UEFA this summer - despite promises by boss Michel Platini that it would police clubs with excessive spending practices - Woodward claims that it is still a concern for the club and its recent habit of substantial spending.
"Is it still important? Yes, absolutely," he said. "There is still significant discussion in UEFA about financial fair play being important. There is still great belief in UEFA."
While Woodward's comments appear to signal a change of business tactics for the club, it's important to understand that the product on the field is more than that of gaffer Louis van Gaal's design, and more importantly that a club's success is as related to what happens behind closed boardroom doors as it is what happens on the pitch.