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August 2021

Manchester Utd. The ultimate football Ponzi scheme

Tony Attwood

Much has been made of Arsenal’s resurgence in 2013 being to do with their newly found wealth, which at the end of August resulted in the purchase of Ozil.

What hasn’t been noticed quite so much is that this has coincided with a bit of a collapse in the financial fortunes of Manchester United.

Manchester United does make a lot of money.  Unfortunately for them, the owners take out a lot of money.  Indeed so closely linked is the financial well-being of Manchester United with the survival of the Glazer family (who desperately need the money to keep their other business interests running), that the in-and-out routine of finances starts to look like a Ponzi Scheme.

Now in case you are not fully familiar with this, a Ponzi Scheme is one where money is poured into a business by investors who are then paid their interest not because their money is being invested anywhere good or clever, but rather by other new investors pouring money into the scheme.

In Manchester United’s case for “investors” think of advertisers and the crowd, all pouring their wealth into the club in the belief of ever greater returns in terms of audience reached, TV revenue, high profile triumphs and of course a continuance in the Champions League will result.

Ponzi Schemes always collapse in the end because the operator runs out of investors whose new income can pay the interest due to the earlier investors.  As a result, no one’s money is safe and the scheme collapses.   If you want a modern day version of this sort of scheme in the financial markets think of Bernard L. Madoff Investment Securities LLC.  When it collapsed the debts were around $60 billion.  Tragically three men, including one of Madoff’s sons committed suicide.

I used to have the feeling that Manchester United supporters were aware of the dangerous financial situation facing their club, with their green and gold scarves, but I get the feeling that last season’s championship made them forget what was going on underneath the club’s outer shell.  Even the fact that Sir F had persuaded Robin van Persie to sign a crazy financial deal (crazy for the club, lovely for Robin) on the wholly false promise that Sir F would be at the club for three more years was not enough to alert the old green and golds that something rather rotten was up.

What should be making people aware of the extremely precarious nature of Manchester United as a financial beast is that its value on the stock market (remember that great launch on the market?) has dropped by £220m in the last month alone.

Now of course Manchester United is a football team (despite last season’s attempt by the media to paint them as God’s personal sporting club) and their fortunes can go up and down.  Sensible planning would mean that there should be arrangements in place in case they had a bad season and ended up, oh, I don’t know, shall we say, seventh?  (Arsenal have such planning, much to the annoyance of the AAA who sneered at such careful forethought as a “failure mentality”).

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In the event of decline, the income from the Premier League would drop, the income from Europe would vanish, and the income from sponsors (which is linked directly to appearances in Europe) would be savagely reduced.  And as Tottenham H have shown with such precision, getting into the top four from outside is not easy.   It is not just that you have to be a bit better, it is that someone else has to be worse.

Take a look, if you dare, at today’s table…

Man City
Man United

It is not hard to see that there is a group of three fighting out the exact order of the top three, followed by Liverpool, Everton and Tottenham fighting for the fourth Champions League spot and a bit of the Europa action.

Man U ain’t in either group although they do have a better goal difference than Tottenham, (who like Man U, are out of the FA Cup).

So what happens if the money runs out?   First, the Glazers will continue to take their cut, just as Madoff and Ponzi did up to the last.  The Glazers are of course not running a Ponzi scheme, but they need the money to hold up the rest of their business empire, wherein the decline of the Man U share value is not helping their ability to borrow money to prop up the shopping malls and the like.  So they have to have money, to avoid the creditors at the door.

Which means that the decline in funds could well hit Man U directly.   Man U will thus be trying to buy top players just at the moment in which they have less money to do so, and at the time when players will be seeing them as a non-Champions’ League club.   “Join us to be part of the new United, back in the Champions League next year” ain’t much of a calling card.

Next, Wayne Rooney might decide it is time to go elsewhere, as he has suggested he might do in the past.   Of course the club might much prefer it if the very highly paid, but very highly injury prone Robin van Persie was the one to leave, but the chances are he will never be able to get the £200,000 a week he is now on, especially when he can only play a limited number of games per season with a declining health and ageing limbs.  So Robin will stay, a painful drain on resources, an ever decreasing return.

So what do the Glazers do?   Risk money that they need to pay their landlords and banks, on another wild foray into the transfer market?  Or say, no, make do.  We ain’t got the cash no more.

Actually it might be rather good if Moyes were to be given loads of money, because the chances are he might buy an Andy Carroll or a F. Torres, or indeed some of the players Tottenham bought with the Bale money, which would leave the club little better off on the pitch, but even worse off financially.

It is interesting to recall that when the Man U protesters and web sites like Untold, suggested that Man U was in a parlous state, we were all told that we simply didn’t get big time finance.   Interestingly, Madoff used a similar argument.

Of course Man U may be sitting on the discovery of eternal youth, and could have arranged for Ryan Giggs to get younger – meaning he will be a mere 39 later this season.

But maybe not.


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31 comments to Manchester Utd. The ultimate football Ponzi scheme

  • Pete

    Andersred always writes very knowledgeably about MU’s finances (and other leading Prem clubs as well). Unfortunately, he has been fairly quiet over recent months but hopefully we will hear something from him again soon.

    The sense I get is that they have made significant inroads into their enormous debt pile and the sheer amount of profit they make every year means they are cushioned to an extent.

    The key unknown, as Tony alludes to, is how desperate for cash are the Glazers? But even if the answer is “very” they haven’t yet found a way to siphon off large amounts of cash under the radar – as far as we know. MU’s huge interest and advisory expenditures appear to have gone to the banks and other lenders.

  • Mike

    Lol, nice one. It’s been my life’s ambition to see Man Ure in the Conference 🙂

  • Mike T

    Interesting article.

    Many in the press suggest that the Galzers will hand over a stash of cash to fund transfers and if they were football people its easy to agree with that standpoint but unless I have misread things this family are not fans so I really wont be at all surprised if that they take dividends equal to or even in excess of the monies taken out in the past by way of interest payments.
    In truth now the huge TV deal is in place Man U , Liverpool, Villa and dare I say Arsenal to name just a few clubs could deliver vast sums to their owners and lets face it most of these type of owners aren’t football supporters they are hard nosed businessmen who haven’t put money in without the long term aim of getting a return on their investments . And in truth who could blame them?

  • SouthernGunner

    Interesting example.

    One of the keys to Uniteds income was the success they had under SAF. Now that he’s gone & Moyes is in charge, & that other clubs are spending/strengthening, success isn’t a certainty & could have an affect on future income. With SAF, results/trophies were almost (rightly or wrongly) guarenteed.

  • bob

    Perhaps the Glazer’s next “fiscally prudent” move will be to finance the return of Don Fergus (aka Lord Football) to save the ship and generate a few more upward. That move would provide a big if temporary spike in Manure’s fortunes. The Don was spotted in attendance at their last away loss to Sunderland; and he usually never attends matches outside of OT. As a board member and ensurer of Brand Value, perhaps this is a Plan B to save the season and keep it all going.

  • bob

    sorry, meant: “to generate a few more upward spiral$.”

  • OMGArsenal

    As Samuel Clemens (Mark Twain) famously said after seeing his obituary in a local paper; ¨Reports of my demise are somewhat exaggerated¨ or something like that. United’s decline was probably predictable, even before SAF left. Their team was aging and in need of a youthful infusion, they needed more and more referees help to win games and their financial situation, although far from being critical, was starting to deteriorate.
    My best guess is that Moyes is on his last legs and will maybe finish this season,but maybe not. There will be a question of SAF returning as interim manage until a new superstar manager is hired…..Pulis anyone?

  • Mandy Dodd

    They really are going downhill, looks like even the PGMOL are deserting them for richer pastures – this could hit them more than anything else…in the short term at least

  • Brickfields Gunners

    Wouldn’t it be easier and probably cheaper for ManUre if Riley just does the job he is paid to do ?
    The EPL is not fixed !

  • Brickfields Gunners

    Just because it reminded me of the moron who was here sometime ago claiming to be ‘highly’ learned !

  • Brickfields Gunners

    Q: How did Bernie Madoff get the idea for a ponzi scheme (where you use the money of new investors to pay off the older investors.)
    A: Social Security!

  • Pat F

    The revenue generating potential of Man united is so great that they will be able to survive the thieving of the Glazers. They have long term deals with advertisers which other teams can only dream of. Their training kit earns more than most PL teams shirt sponsor.
    As referenced by Pete, the Glazers have already taken enough out to pay the majority of their debt.
    I reckon they will wait until all of their debt is paid off and then sell to an oligarch and disappear into the sunset with a nice wad.

  • nicky

    The action of the Glazers in prioritising the skimming off of the cream of Manchester United’s income is a warning to all English clubs that so-called investors from overseas are not involved purely for the fun of it.
    Professional football clubs are hardnosed businesses now
    and in many cases are being used merely to support other financial interests of the main investor.
    The example of United is now becoming clear to all. With the departure of the arrogant, bullying Ferguson and his near dictatorial control of certain match officials, the players have to solely perform ON THE FIELD in order to succeed and they are now found wanting.
    It will be interesting to watch how the situation will develop. Players needing to be discarded due to age and lack of performance, will find it difficult to find other clubs without lowering their grossly inflated wages.
    Big earners but injury-prone employees like Van Persie will discover that the Glazers will not be prepared to carry passengers.
    The forthcoming bursting of the Old Trafford bubble will be a warning to all.

  • When u win most time people forget u hav failed before, I once come across an article dnt no wer bt it speak a lot in full detail d Man U sponsorship program wit chevrolet(dnt mind been corrected) which was seen has a fraud leading to dismissal of der manager bck den. It shows all. Lope holes in d contract which prove dat der are lots of failings dat Man U are trying 2 cover up. Bt Red nose is winning so who cares if der financial stability is in jeopardy.
    All fingers are pointing dat SAF jump a sinking ship,Hw can u step down bearly six month ago nd all u worked for in 27 or so years are just falling apart majestically. Ref are now officiating wit free mind, no holy cow penalty, no free points, players can’t perfume again coz dey are rightly below players, contract been exposed, club financial standing now in sinking sand. Its just WOW, dis can b a box-office buster movie if we can see someone to write/act it out in a movie.
    Well wen all other land is sinking sand ARSENAL can stand on a solid ROCK of ARSENE WENGER VISION stay alive even wen am gone. Once again LeProf is proving HE ALONE KNOWS BEST( can’t stop 2 trust dis MAN OF VISION)

  • robl

    @ Seroti, well said ( I think!)

  • OMGArsenal

    Seroti……….is this a new language?

  • Gord

    More on 1992/3 (first EPL season).

    There is little positive in the card data, in the large. I found 794 first yellow cards. One compilation says there were 795 yellow cards issued that season, so I only missed 1. A few of the cards have no time attached to them, which could be legitimate.

    The largest ratio of cards obtained playing away to cards obtained playing at home was for Liverpool (6:1). Crystal Palace was next at 4.8:1. The teams with the lowest first yellows at home were: Aston Villa, Crystal Palace, Liverpool, Manchester United and Norwich City (alphabetical order). The teams with the highest number of away cards are: Chelsea, Liverpool, Southampton, Sheffield United and Wimbledon. Leeds United and Middlesborough nominally obtained the same number of cards home and away.

    Many instances were seen where the mean number of first yellows received was about the same as the variance of that count. Which is something one look for if you want to use a Poisson model for distribution, but yellow cards are not distributed uniformly over a 90 minute game, which is contrary to what is needed to use Poisson. There were some situations where the variance was less than expected, which is fishy. Could be by chance? In situations where the variance was large than the mean, the possibility of using a negative binomial model exists. Where the negative binomial can be used, the 2D parameter space (p,r) does not split into clusters of data.

    As far as Untold Arsenal goes, this is just another analysis which seems to indicate that Arsenal is not being picked out for special treatment in 1992/93. Which means we should see some kind of development as one adds in data from other years.

    Some of the data continues to look fishy, so it is possible that some teams were still getting special consideration (positive or negative).


    WRT Theo, there was some news blurb where a surgeon formerly associated with Rangers (Glasgow) thought he could magically fix Theo sooner than anyone else. With all that has happened to Rangers, I would say thanks but no thanks.

    Get well soon Theo.

    The Ox had a good 45 minutes for the U21s, according to

  • mk

    As much as we all might wish it, I think the insane commercial deals made while they were still successful will keep them near the top of the league despite the money the owners are taking out.

    Of course these deals will not be renewed at this level unless there is a big turn around in performances, so they may just remain at a ‘top 4 club’ level rather than a title challenger for some time to come.

  • the deals they had were dependent on the fact that they had a 50% chance of winning the league – based on the last 10 years for which manUtd won 5. But with Moyes, is the probability still the same ?. They may well end up winning 2 of the next 4 yrs and retain the same win percentage, afterall their deals all run till abt 2018/19. If moyes continues with his current form they may end up with a 0-10% change of winning the title which would severly damage “sponsor” income alone. They can still get the crazy PL revenue which will outstrip any single sponsor income per yr and be safe with it. In this scenario they will only be competing against other big prem clubs for top talent leaving the rest of europe behind. So money wont be an issue for them in attracting talent. it will be this statement from Moyes –

    “We need to find a solution to winning games, no matter how. It doesn’t matter what style. ”

    which top top top player would willingly go to a club where manager self proclaims he doesn’t care about style.

  • Tasos

    If the PGMOL referees stop giving Man Utd “kind” decisions then their financial problems can only escalate. As we have seen recently, this Man Utd team look mediocre at best when the officials fail to give them what they had become so accustomed too.

    Laterly Ferguson’s regime had relied so heavily upon these refereeing decisions that League Championships were formed from their basis.

    Maybe all the help that Man Utd have received over the recent seasons has enabled the club to stabilise somewhat, financially, after the enormous debt the Glaziers placed upon the club initially?

  • para

    @ Mike; Thumbs up.
    Can’t see it happening though, some oily would come along and “rescue” them from that, yea, from even the Championship.
    Just want them to NOT qualify for Europe, not even EUFA.

  • Stuart

    From an investment point of view, is Man Utd a good proposal nowadays? You’d have to invest as much as you would in say Everton and the purchase price would be higher than Evertons.

  • its never abt how much money u can spend on a team, its always about how much can you get back, with new EPL money and their existing sponsorship deals, ManUtd wont have a problem spending it on players, its whether a player would want to come there to play for an ***cough*** enigmatic coach like Moyes , that is the question.

    Please dont compare finances of MU and Everton they are on different planets. If only Bill Kenwright was non english , everton fans and media will be up in arms of how he does not spend on the team and how he has no ambition (remember hearing it anywhere)

  • Nelson Wong

    There is quick way to raise cash : issue new stocks.

    I forget what % they hold but they can issue as long as they hold majority, or remain the dominant share holder holding 40something percent. Unless their agreement to borrow money stop them from doing so.

    That might dilute their income but that solves the problem.

    Even more interesting, they can use that money to purchase their own shares to drive the price of their stock up again. And as long as the hold the controlling votes, they can have loads of ways to benefit themselves eventhough they might get a lower share of the income later on.

    We see a lot of these in Hong Kong. I am sure they do that in London and New York too.

  • Matt H

    Good post. I’ll also be very interested to see what the Tott’s accounts look like now they’ve exchanged one good player for 7 average ones, no doubt all on decent wages, and had to pay off yet another mangager? Can only assume they are counting on Ch’s Lg to cover this!

  • Stuart

    Going your logic, no one would have bought Man City or Everton.

  • Stuart

    *Chelsea even.

  • bjtgooner

    A very interesting article Tony.

    Can someone who is up to speed with share types confirm if the shares issued by Man U provide dividends and/or voting rights? I have a feeling that the MU shares did not carry full rights – but I have not followed them closely.