Wednesday, 9 March 2011

Update on David Gill's misleading comments to Parliament

Paul Kelso, the Telegraph's steely Chief Sports Reporter has challenged United on David Gill's misleading comments to the Select Committee. The response he got was:

"they say David Gill referred to net spend excluding the Ronaldo cash (in bank). Glazers: £27.2m a year vs. £16.3m 99-05"

Two things strike me about that statement.

Firstly, since when does "net spend on players" mean "net spend on players except the sale of Cristiano Ronaldo"? Why exclude such a huge item from the calculation?  Why not start excluding major sales from the plc era (Beckham's for example)? The answer of course is that excluding the Ronaldo money makes the numbers look better. But spin and truth are not synonymous....

Which brings me on to my second thought. The weird "ex-Cristiano" calculation may be what David Gill meant to say, but it is absolutely not what he actually said, as anyone can see from the video. How ironic to mislead during a rant about how well the club communicates....

LUHG

19 comments:

Anonymous said...

The so called "Net spend" is irrelevant. You dont need to spend for the sake of spending just so to increase the 'net spend'. We have bought a few bargains who today are World class players like Vidic, Evra, Hernandez, etc. What is important is we buy players who 1. Fit our sytem of play 2. Improve team performance. As long as the team wins trophies we have have a Net Spend of zero anyime

andersred said...

I'm not fussed about net spend OR gross spend per se, like you say it's results that count. Gill thinks it is important to stress that net spend hasn't been impacted debt levels and in making that point was extremely disingenuous. That's the point.

PS. Have you seen our midfield recently? We've gone sharply backwards since Moscow 2008. We need some net spend....

anders

Diem said...

it's a shame that Carrick just seems to be going backwards. If he'd turned out to be top tier I know I'd be much less concerned about midfield.

David said...

whichever way you look at it the Glazers/Gill are taking us for absolute fools, what is scandalous is this statement was made in front of a select committee so he is taking them for idiots as well. This is a simple reflection of the way the Glazers have frightening control over this club and their employees are encouraged/forced to be 'economical'with the truth

strapworld said...

He who pays the pipers calls the tune.

Gill has proved he has been bought lock stock and barrel by the Glazers. If the club gets new buyers he has to be the first in the queue for the P45.

Excellent article.

Darren said...

Laughable that the glazerites always want to remove the Ronaldo fee when talking about spending. I'm pretty sure we did sell the lad. Yep, I would definitely notice if he was still playing for us.

Anyway, when comparing spending I think it's important to also consider how much we were spending on stadium expansion, and the building of Carrington of course, pre-Glazer. It must have been an average of at least £15m per season in the 10 years pre-Glazer surely?

Some boxes have been tarted up since the takeover.

The best measure to compare PLC v Glazer would be to calculate what % of profits was reinvested in the club (transfers & stadium/infrastructure) before and after. I imagine that would be quite telling.

Anonymous said...

Darren,
I am pretty sure that the plc spent in excess of £150m (in old money) on infrastructure since 1992. I think there is a link somewhere on the blog to a presentation detailing the spend..
Perhaps Anders can provide a link.

Eugene said...

Anders, do you know whether any supporters groups will be presenting to the committee? I get the impression that Gill, Coates, Quinn etc showed up and had a swing at the FA (easy target) but then unanimously said everything was great at their respective clubs and that there were no issues with the Premier League. Talk about a whitewash. It would be great if MUST or IMUSA had an opportunity to rebut Gill's nonsense but it doesn't look like they've been asked to present.

Damian said...

It is of course reasonable to suggest that the aim of a football club should be success rather than outspending their rivals, but it is also true that success and failure rarely flow directly or immediately from either investment or a lack there of. It should not be surprising if a failure to invest does not immediately lead to failure on the pitch, particularly as it's possible to maintain the core of a competitive squad for at least five years, if not longer. And, of course, success, failure, and investment, etc, are all fairly relative terms, anyway.

Also, let's say, for example, that United were to make £10bn in profit every season (a clearly absurd amount) and that all other clubs were making the same as they currently do now, would anyone really be happy if we spent the absolute minimal amount to maintain the same level of success as we currently achieve and the rest of that profit was used for non-football related matters? I would suggest not, which tells me that we can't simply use any level of success as the sole indicator of whether spending is sufficient.

Even if a club won the quadruple every season, for example, it would still be reasonable, imo, to expect transfer spending to be partially relative to income. That is particularly true in the modern age where the price of football has risen dramatically, which has forced many football fans to choose between their love of the club and other, some might suggest, more important things. As I've argued elsewhere, football clubs can't have it both ways. They can't -- or at least they shouldn't be allowed to -- move to an economic model that is indistinguishable from that of any other area of the market, while at the same time, expecting the kind of loyalty from their customers that no other area of the market currently enjoys. That, imo, is a recipe for exploitation, as is the fact that few if any football fans would be willing to change team based on price or quality, as we all do in pretty much every other area of the market without even a moments thought.

Those who defend the Glazers rightly point to the lack of evidence that Sir Alex has been restricted in his spending, but what they cannot deny is that at least half of the clubs profits each season are unavailable to the manager even if he wanted to use them, and that his approach to the transfer market -- both evident in his recent activity and his own words -- has subtely changed in recent seasons.

Rather than deliberately restricted, it's entirely possible that his knowledge of the clubs financial situation has persuaded him that he needs to be a lot more careful with the money that he does spend. I suppose that is not necessarily a bad thing, but as the transfer market is a notoriously risky place to spend money, it may have persuaded him that it isn't worth taking the risk of spending large sums on one player, for example. Arsene Wenger appears to agree, and we can all see the effect that kind of prudent approach can have over time.

Another point that is often overlooked by those who defend the Glazers is that our current levels of success have required what is commonly considered to be the greatest manager of all time to achieve -- someone with 20 years worth of experience and success, and an intimate knowledge of the club and its traditions.

Finally, any comparison of spending should also include both the inflation of transfer fees, as well as the clubs ability to actually pay for transfers (i.e. the almost doubling of turnover). If the average price of a transfer has increased, it should not be unreasonable to expect that to be reflected in transfer spending. Otherwise, it is possible to argue that the decline in spending is actually much greater than the figures imply. And the same can be said with regard to turnover. As far as I am aware, the club has doubled its turnover since the arrival of the Glazers. Given that the clubs own accounts show that transfer spending has actually decreased in that time, that is very damning evidence indeed.

Anonymous said...

http://www.forbes.com/profile/malcolm-glazer

http://www.forbes.com/wealth/billionaires/list?state=Florida&industry=-1&country=225

Explain this to me Andy

andersred said...

Hi Anonymous at 11:24

I wrote about Forbes estimate of the Glazers' wealth here:

http://andersred.blogspot.com/2010/09/glazers-and-rich-list-why-forbes-cant.html

Not much has changed....

anders

Anonymous said...

Cheers andy but why does it seem they are growing richer if there business interests are all in property as you have dealt with before,Explain that

Anonymous said...

Any Further update on the postion of First Allied Corporation??

andersred said...

I don't trust the Forbes numbers as I've explained before. The Glazers' net worth hasn't moved since September 2010 (it was $2.6bn then as well).

First Allied is still trading badly and 2012 will be a crunch year as lots of mortgage deals roll off.

The Glazers' finances are opaque, but the one thing that is crystal clear is that nobody, Forbes or otherwise, can point to where they could have got $400m from in cash to repay the PIKs. Unless it was more debt.

anders

Anonymous said...

Anders, have you previously compared the overall net investment in MUFC (squad, ground, youth/other facilities etc) before and after the takeover, in relation to either turnover or gross profit.

I suspect the results would be pretty damning.

Anonymous said...

perhaps Andy you could take us inside the Glazer Family Property Interests again.It has been some time sine you last mentioned this part of the Glazer Empire

Anonymous said...

Anders - May be we should buy another Veron. That would put us ahead in both net spend and midfield at the same time. :)

andersred said...

For those asking about net and gross spending as a proportion of the club's profits, see this new post:

http://t.co/yjyX0wT

anders

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