Erik ten Hag has said Manchester United will do “everything in our power” to sign a striker this month. On the most basic level, that the club will have saved about £15.5m in wages from cutting ties with Cristiano Ronaldo at the beginning of the World Cup suggests those funds will be freed up for reinvestment.
Yet the reality for United, for so long viewed as one of the sport’s two biggest financial behemoths, is that they are in a financial rut that will prohibit them from spending big, thus placing a potentially severe limitation on their chase for a top-four spot.
For all the positives of the Ten Hag era’s early months, United are precariously straddling the line Arsenal crossed in 2017 (coincidentally the last year United led the way when it comes to revenues) and are only now looking like recovering from.
Effectively the absence of Champions League football creates a cycle that requires an entire revamp, while the arrival of Newcastle United to the group of clubs in contention presents an additional challenging factor.
The tight purse strings are, on one hand, a consequence of their spending last summer - totalling about £215m on five players including Antony, Lisandro Martinez and Casemiro - and, on the other, an issue of far greater concern while the Glazers remain in charge.
That the owners are open to a sale is justifiably considered a positive by much of the fanbase. But it will be a protracted transaction at best and the incumbents’ asking price is so far north of what interested buyers should deem reasonable that an impasse could drag on.
United are simply no longer as rich as they used to be. While neighbours City and Newcastle ascend to higher plains, backed by states, United’s accounts are trending towards rapidly increasing losses.
In the past three seasons their losses after tax have been £23m (19/20), £92m (20/21) and £116m (21/22). The pandemic is a major reason for that but United’s debt has also climbed above half a billion with the pound’s collapse against the dollar complicating matters further. Much of their debt is with US lenders.
Their most recent accounts said that net debt increased “primarily due to £64.6 million of unrealized foreign exchange losses on the retranslation of USD borrowings in addition to a further drawdown on our revolving facilities of £40.0 million.”
That is also connected to their dwindling cash reserves, which stood at a healthy £308m in the summer of 2019 but are now just £24.3m. Again, the club points to the pandemic as an explanation for that alarming reduction - even if their stangnancy in every other area of the business is impossible to ignore.
Having previously been the standard-bearers when it comes to commercial income, the £232m posted in their last set of accounts was only the sixth highest in Europe.
And the prognosis in that regard is not exactly wonderful. The recent decision to part ways with shirt sponsor TeamViewer suggests the club are no longer as attractive as they used to be.
Investors in the German firm described the £235m deal as “appalling judgment” at a time when even some of the biggest corporations are watching their marketing and advertising budgets owing to financial uncertainty across the globe.
This financial reality partly explains why Cody Gakpo has ended up at Liverpool instead of United this month. While there is a feeling that Liverpool, to quote Stan Collymore, are shopping in Aldi or Lidl and City are capable of walking straight into Harrods, at least they remain capable of spending.
Ten Hag may have said United will do “everything in our power” but the manager has also pointed to the need to be “creative” to secure a signing who can improve the squad and spoke of there needing to be "sporting criteria" plus "financial criteria" - all effectively code for funds being limited.
There are players available. Joao Felix, with no future under Diego SImeone at Atletico Madrid, should move somewhere this month but already the noises are that the cost of that will be too off-putting for United.
There has been chatter around Goncalo Ramos, the Portugal striker who scored a hat-trick when replacing Ronaldo in Qatar, and Borussia Monchengladbach’s Marcus Thuram. Except neither will be exactly available at bargain prices.
A loan move, similar to the deal for Odion Ighalo two years ago, should not be ruled out.
Less than 48 hours into the window and talk has moved to recalling Amad Diallo from his loan at Sunderland. But he will only be kept in reserve at Old Trafford should there be injury problems and that is not exactly optimal for the Ivorian’s development.
United’s predicament is straightforward: they need to finish top four and the club’s hierarchy may need to be decisive in this window to provide Ten Hag with sufficient tools to get it done.
As Edu and Mikel Arteta will attest in north London, being out of the Champions League will make the task of rejuvenation so much harder.
