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Why Erik ten Hag must sell players before he can splash the cash at Manchester United

Manchester United manager Erik ten Hag. Photo: PA/Reuters© PA

James DuckerTelegraph.co.uk

Manchester United will have to qualify for the Champions League and raise significant money through player sales if Erik ten Hag is to sign the midfielder and striker he wants this summer – even if the Glazers sell the club.

The United manager wants to sign a top striker, with the likes of Harry Kane, Benjamin Sesko and Victor Osimhen on the club’s radar, as well as another leading midfielder, such as Frenkie de Jong or Jude Bellingham.

But it is understood a change of ownership will make little difference to Ten Hag’s summer transfer kitty if revenues are not significantly boosted by the return of Champions League football – which looks more important than ever – and player sales.

He may have to choose between a pedigree striker or midfielder given the impact of UEFA’s new financial sustainability rules and the £307 million (€345.5m) the club still owe in transfer fee instalments.

United would give their prospects of an unexpected title charge this season a massive boost by beating Manchester City in the derby tomorrow and Premier League leaders Arsenal the following week.

But UEFA’s new financial sustainability rules – coupled with the cash United already owe on transfers – have dramatically increased the pressure on Ten Hag to ensure his side finish in the top four and make decisive moves over the futures of players such as Harry Maguire, Aaron Wan-Bissaka, Fred and Donny van de Beek, all of whom could leave to free up cash to spend elsewhere.

Ten Hag would also like another right-back.

Cristiano Ronaldo’s exit in November left Ten Hag desperate to bolster his attack but the manager has been forced to pursue a low-cost, no-obligation loan for Netherlands striker Wout Weghorst this month, with the pursestrings so tight after the club vastly exceeded their budget last summer with a £200m-plus splurge on six new signings.

A second successive season outside the Champions League would also lead to a 30pc cut – the equivalent of £22.5m (€25.3m) – in their £75m-a-year deal with kit supplier adidas, although any such hit would be spread over the remaining two years of the deal.

Under the new squad cost controls that were introduced by UEFA last June, clubs will be restricted to spending 70pc of their total revenues on transfers, salaries for players and coaches and agents’ fees by 2025/’26.

For this season the figure is 100pc to allow a period of adaptation before it drops to 90pc next season and 80pc in 2024/’25, with football’s European governing body keen to limit wage and transfer inflation.

As part of the cost measures, revenues class as operating income plus profits on player sales while UEFA use player amortisation – an accounting term which involves spreading transfer fees over the length of a player’s contract – to calculate how much a club has spent.

United are forecasting revenues of between £590m (€664m) and £610m (€686.5m) for this season, up from £583m for 2021/’22, and that figure would swell considerably next term if they return to the Champions League.

But, without Champions League football, there will be an even greater burden on United to sell well this summer – something they have habitually failed to do during the post-Alex Ferguson era – to allow Ten Hag to strengthen his squad.

Otherwise, Ten Hag will likely have to prioritise a striker over a midfielder such as De Jong, whom he tried and failed to sign from Barcelona last summer and would still like to bring to Old Trafford.

If United sold their captain Maguire for half the £80m they paid Leicester in 2019, midfielder Fred for about £30m and right-back Wan-Bissaka for around £20 million, that would equate to around £50m in profit on player sales when calculated against their existing book value.

Maguire, for example, has two years to run on his six-year contract – the equivalent of £26.67m (€30m) in remaining book value, so a sale at £40m (€45m) would translate as a £13.33 million (€14.9m) profit.

As of last season, United’s spending on transfers, wages and agents fees are estimated to have stood at more than 80pc of turnover plus profit on player sales.

Revenues were £583.2m and the profit on player sales £21.9m (€24.6m) – giving a total of £605.1m (€ 681.1m) – but player amortisation accounted for £151.5m (€170.5m) and agents’ fees £29m (€32.6m). Player and coaches’ salaries are estimated to account for around 80pc of a £384.2m (€432.5m) wage bill, which included compensation for Ole Gunnar Solskjaer and Ralf Rangnick’s departures.

With revenues forecast to be marginally higher this season – and the wage bill down due to the mid-season departure of Ronaldo and player salaries being lower because of the absence of Champions League football – that ratio is expected to drop.

United’s revenues have increased by 61pc since Ferguson retired in 2013 but this has been dwarfed by a 113pc rise in wage costs and transfer fee amortisation of 263pc over the same period.

Nonetheless, Premier League rivals such as Arsenal and Chelsea, who have also spent heavily but have smaller revenue streams than United, may find they have even tighter headroom with the new UEFA rules.

United have also tended to operate with a healthier wage-to-turnover ratio than most leading domestic and European rivals.

It is thought United – who are supportive of the regulations and recognise the importance of financial fair play, which will have ramifications across Europe – believe the fact the club operates a positive equity on their balance sheet, unlike many leading rivals, is also an advantage as it will permit the “allowable” loss under the UEFA regulations.

Weghorst is expected to join on loan before United focus their efforts on signing a permanent replacement for Ronaldo, with the likes of Kane, Osimhen of Napoli and Sesko, who plays for RB Salzburg but is due to join RB Leipzig at the end of the season, among those being watched.


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