Definition: Investing the yearly profits of a very famous football club on interest and debt repayments rather than the very famous football club.
At other big European football clubs Bayern, Madrid and at a club called Manchester United before 2005, the club profits were invested in stadia and players. Since then its been proven many times over, rather the club investing in players and stadia, most of the profits will be spent on more important things like buying up bonds and paying interest of huge debts… #Glazernomics
After last summers months of never ending transfer talk on big £30-40m players demanding £200k a week of which nothing ever materialised, it becomes a rather annoying strange cycle of ‘we’ve been here before’. What are people talking about this summer? Another big name player but the finances say its unlikely. I’ve never seen any evidence to say bids have been put in for certain players so I don’t understand if its more a hope thing or if its simply a case the club knows they’ll be outbid or out gunned in the wages department. Fergie has admitted we can’t complete on wages with City and Chelsea and thats simply more… #Glazernomics
This cycle also seems to come around during the renewing period of season tickets and David Gill love him or hate him always comes out with the statement that there is money to spend on players but I think that question has to change now. I don’t doubt him on that as on a past blog I covered what United have got to spend and I know there is money to spend this summer. Premier League TV money, European media money, season ticket money and some sponsorship money should be paid in this summer but now we should forget the transfer money. The question should be can United afford the wages being demanded rather than transfer fee. If the question is a case of no because we already knew last summer it didn’t fit into the current business model and financial path of the club, why are the media and fans gullible enough to take it? Surely questions should be asked of the club to either explain itself or make known its intentions. ‘The Money is there’ is no longer good enough as there was only £25m in the bank at the last count… #Glazernomics
As its now all about the wages and if you know you cannot compete in that area you will seriously struggle because that is what more and more footballers want, money. In the area I believe the club and many fans not just of United but fans of other clubs are strongly against the wages other clubs have started paying out. Thats one area you can’t blame the club on but the problem is, you can. They cannot use that excuse if £42m a year is flowing out of a black hole on interest and they then choose to spend £92 million on buying up the bond debt. Thats more than United sold Ronaldo for and £42m could pay a top player £200,00 a week wages for nearly four years or you could pay three players £256,000 a week for a whole year. The money paid out with zero benefit to the club is staggering… £0.501 Billion. #Glazernomics
To sum up I’d expect United can afford to sign two players or possibly three players with a total price tag of no more than £30m between them and that’s a maximum total for me. I expect it will be less as there will be a fine line on how much the Glazers decide to put down paying more of the bonds off and how much they decide to invest in the squad.
Thats your lesson in… #Glazernomics
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