Reply With QuoteThis could seriously be a thread in itself and is half-tempting if it weren't for the fact it will descend into rigid stances of "FSG good" v "FSG bad" and "y we no replace Wijnaldum?" so will just reply as a post. I'll provide a couple of caveats before I try to (relatively briefly) explain it.Originally Posted by Kev0909
- Definitely not a finance expert.
- Most folks know I like (most of the) FSG way of doing things, so I may show bias, though will try to be objective.
- Don't follow Man United closely as I'm not a fan.
- Been exhausted/overwhelmed/irritable of late so might not commit to replying to multiple nuanced questions.
Anyway! To the embolded points of "how" - even Klopp has said "I don't know how they do it" when speaking about them in a press conference where he mentioned Man City, Chelsea and PSG in terms of big spending. But the following should give a little insight.
Matchday income is essentially number of matches played multiplied by average attendance multiplied by the income per fan per match. Man United used to go far in many tournaments for years and enjoyed 13 League titles in an 18-year spell, with an Old Trafford capacity of 74, 879 - Anfield on the other hand has 54,074 seats which will rise to 61,000 soon. We used to have a capacity of 44,742 for a long time, which Old Trafford absolutely dwarfed by basically having 30,000 more seats over an extended period. Man United were consistently staying in the Champion's League spots and going far, where Liverpool weren't always. The extra money meant a deeper squad so the FA Cup and League Cup topped up income as well.
When it comes to commercial income Man United got an early start in the Satellite broadcasting eraand stayed ahead - massively fond of selling various rights to commercial partners abroad as part of their model during a period of ridiculous success. Some clubs are catching up there, particularly as the current version of Man United doesn't hoover up trophies. Kit deal with Adidas was big, sponsorship with Chevrolet was big.
In terms of revenue, Man United were a Colossus. Well, they still are - it's not so much that they have stopped being big, but they have slowed down their growth - and other clubs are reeling them in, ourselves included. But you don't have to go back very far to see a huge disparity - in 2017 for example Man United outdid Liverpool in the revenue area by £217,000,000 which is just massive - the following year we gained huge ground on them, but they still made £135,000,000 more than us - that's a £357,000,000 disparity in just those two seasons. The equivalent of seven transfer fees of £50m.
As to the italic/underlined point of us spending more and what we could do with it, I'd say a couple of things. The first of which is that simply spending money guarantees nothing - if we look at the spending of Man City for example, coupled with having the "world's best" (subjective and not my view!) Manager, plus the insane wages, plus the insane squad depth, then I actually think they have gotten relatively poor value-for-money - two of their League titles were only one by a solitary point against a rival they have massively outspent and theoretically out-gunned and they have reached one Champion's League Final in recent seasons compared to the three of Liverpool. Critics of that stance will say "ah but they won the League 4 times" and I'll hold my hands up and say I can't dispute that, but they should really be finishing 10 points or more clear every season rather than still needing "luck" with refereeing decisions to get one or two of their titles over the line if we truly believe that money is the key factor. Man United have shown particularly poor use of finances if we use money spent as the yard-stick. We could have spent £70m on a midfielder and have them flop - though we can of course speculate we'd have nailed it and would win the League with 105 points every year - who knows.
Another thing to note on Man United and Liverpool is where some of the money has gone. In recent seasons Man United have let Old Trafford become something of a ruin, versus Liverpool's development of a new stand that (including the land acquisition) cost us £114,000,000. We also committed £50,000,000 to the new training centre and the upcoming development to take us to a larger capacity is another £80,000,000 - so within the last 8 or so years we have committed £244,000,000 to our future that Man United haven't.
As of November 2021 we had also spent a massive £119,000,000 on agent fees - which is one of the "hidden costs" of keeping a side full of top talent together, versus the days of seeing Torres, Mascherano and Alonso disappear within a short period.
Man United also borrow money in a different way to Liverpool - the borrowed £140,000,000 in 2020 to help Solskjaer buy more players and are alleged to be borrowing £200,000,000 to help revamp Old Trafford. Liverpool on the other hand are a bit more geared towards spending what we earn. Man United keep the debt collectors at bay due to an agreed clause about profit not going below £65,000,000 each season (you can find articles on this if you Google) which is fine for now, but could be storing up massive trouble further down the line.
The models of the clubs are also different when it comes to recruitment. Liverpool have a much more Baseball-esque "trade" system where one leaves and one comes in and we only buy what Klopp/Lijnders/recruitment staff feel can really improve the starting XI whilst supplementing the rest from within and opportunistic transfers (which keeps us very sustainable) whereas Man United have a much more speculate to accumulate approach. Many of their sponsorship deals have conditions such as income dropping should they go X amount of seasons without Champion's League football, so Man United have tried at times to "spend their way back in" (with very mixed results) whereas we aren't set up like that.
Hopefully some of the above has been helpful, although I am sure it will be flawed. The size of Old Trafford means that had they capitalised on what Fergie built (and if Man City and Chelsea weren't around) they should really be the "Bayern Munich" of our League - but each season without Champion's League football is seriously dampening their impact and indeed the financial disparity. In 2020 our revenue was around £533,000,000 to Man United's £627,000,000 and if we stay in the Champion's League (with deep runs) whilst selling with a 61,000-seater stadium for a couple of seasons we are likely to overtake them. They'll still have an edge in capacity and the sheer number of commercial partners, but we're working on it.
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