Manchester United director of football John Murtough insists the spending recorded this summer will not be repeated by the club after payroll hit record levels.
To bolster new manager Erik ten Hag’s squad, the club bought Ajax pair Antony and Lisandro Martinez, Real Madrid midfielder Casemiro and Tyrell Malacia from Feyenoord, in addition to signing free agent Christian Eriksen.
Overall spending was more than £200m and that will only put more pressure on wage bills, which are now the highest in the Premier League, after last year’s wage bills plummeted with the signings of Cristiano Ronaldo, Jadon Sancho and Raphael Varane 19.1 percent have increased. an increase of £61.6m to £384.2m for the year ended June.
Chief Financial Officer Cliff Baty said those pay rises were “in line with expectations” but stressed that savings resulting from non-payment of bonus clauses for not qualifying for the Champions League would result in a “high single-digit (millions of dollars) reduction next year.”
Still, the pay rise helped the club post a £115.5m net loss for the 2021/22 season, £23m more than 12 months earlier.
Murtough said this summer’s transfers represented exceptional spending and with United’s recruitment plans now ahead of schedule, the same level of activity could not be expected going forward.
“Over the summer we made significant investments in the first-team squad, adding five regular starters on permanent basis, including a balance of experienced international players and younger, up-and-coming talent,” he said on a conference call with investors after United announced a net had loss of £115.5million for the 2021-22 season.
“We’ve also seen a higher number of departures than usual and this was an equally important part of refreshing the squad after a disappointing 2021-22 season.
“We will continue to support Erik in ensuring he has players of the right quality and characters to thrive while ensuring investments are aligned with our commitment to financial sustainability.
“Overall, we are ahead of schedule with our recruitment plans as envisaged at the start of the summer and we do not expect the same level of activity in future windows. As always, our planning is focused on the summer window.”
All in all, recruiting Ten Hag, whose first four months in office “bode well for the future,” according to Murtough, has been an expensive proposition.
United spent £24.7million on severance payments to former manager Ole Gunnar Solskjaer, who was sacked in November, Ralf Rangnick, who failed to take up a two-year adviser role at the end of the season after initially taking on interim responsibility, and the ensuing coaching staff.
Although revenue rose by £89.1m (18 per cent) to £583m, the club’s net debt also rose to £514.9m this year from £419.5m in 2021, an increase of more than corresponds to 22 percent.
United attributed the bulk of that £95.4m increase mainly to £64.6m of unrealized foreign exchange losses from the retranslation of loans into US dollars.
Despite this, the club paid out dividends of £33.6million.
Chief Executive Richard Arnold said that although last season was a disappointment, he was confident the investment made would bring improvements.
“Our performance, finishing sixth in the Premier League last season, clearly fell short of our goals and expectations,” he said.
“Everyone at the club is aligned with a clear strategy to achieve sustained success on the pitch and a sustainable economic model off the pitch for the mutual benefit of fans, shareholders and other stakeholders.
“We believe the building blocks are being laid for future success, but we recognize that we have much more work to do this season and beyond and that success will not come overnight.
“As a club we are moving forward.”
Part of this progress includes considering improvements to Old Trafford, although investment levels would need to be kept within the constraints of current financial pressures.
“Earlier this year we commissioned general planners to examine options for a possible redevelopment of our stadium and the surrounding club property,” added Arnold.
“We are in the early stages of a multi-year project and will continue to collect input and feedback from our fans.
“While we remain committed to long-term investment in the stadium, we will be disciplined in our capital plans, which must be sustainable, and take into account the macroeconomic pressures and inflationary environment currently affecting the UK and the wider global economy.”
https://www.independent.co.uk/sport/football/john-murtough-manchester-united-erik-ten-hag-casemiro-richard-arnold-b2173100.html Manchester United won’t repeat £200m spending spree, John Murtough warns