En route to a football workshop in Amsterdam last Thursday, I was diverted into the Sky News studios at Isleworth to give my views on how Manchester United might spend the money they have obtained from the £80m deal to sell Ronaldo to Real Madrid. Whilst United has very large debts, it is able to service them from its still growing revenue stream. That stream depends on continued success on the pitch so a good proportion of the money will be spent on players, in particular on up-and-coming players with potential whose value can be developed.
En route to a football workshop in Amsterdam last Thursday, I was diverted into the Sky News studios at Isleworth to give my views on how Manchester United might spend the money they have obtained from the £80m deal to sell Ronaldo to Real Madrid. Whilst United has very large debts, it is able to service them from its still growing revenue stream. That stream depends on continued success on the pitch so a good proportion of the money will be spent on players, in particular on up-and-coming players with potential whose value can be developed. United have subsequently made it clear that some of the money would go towards interest payments which amount to £69m a year to service a £699m debt mountain. However, in part this a question of managing expectations. United don’t want potential sellers of players to get the idea that they will be willing to meet ridiculous valuations.
Uefa president Michel Platini predictably weighed in to condemn the deal. ‘It is very puzzling at a time when football faces some of its worst ever financial challenges,’ he said in a statement to wire services. ‘These challenges are a serious challenge to the idea of fair play and the concept of fnancial balance in our competitions.’ Normally reliable sources have told us that a luxury tax is flavour of the month with Platini. Clubs would be able to buy whoever they wanted, but would pay a tax on purchases that took them above a certain percentage of their turnover with the money distributed to all clubs. UK sports minister Gerry Sutcliffe also weighed in saying that the government was ‘concerned about the sustainability of the game.’ By moving from England, Ronaldo will escape the British Government’s new top 50 per cent tax rate and will be entering a tax regime where the so-called Beckham Law enables foreign earners working in Spain to pay only 25 per cent in tax. It is thought that his salary may go up from £125,000 a week at United to £180,000 at Real Madrid.