The issue is I don’t see how every club can be profitable and sustain any form of challenge to improve on Europa League qualification at best. The big clubs will only get further and further ahead if teams can only disproportionately try to keep up.
There’s got to be some way, some middle ground somewhere… I just can’t think of it!
I think under the new squad cost rules, at best the disproportion narrows slightly from where it is currently. At best, it gets no worse.
For example, our turnover is currently about £180m, which is about average for a club of our size in the PL.
If we can eventually spend 70% of that on wages and player amortisation, that's a £126m budget for player costs.
Around £55m goes on wages for us currently, with amortisation costs around £80m. But those are still inflated from taking into account higher wage players no longer with us, players on loan that won't play for us again, and a splurge in spending in January 2023. The wage bill and amortisation will come down.
Based on the 70% (comes in from 25/26) we can't increase our player costs at all, or spend any money.
Based on the 80% for next season, it's tight until we decrease the wage bill with sales of dead wood, and reduce amortisation costs with new contracts.
If we manage to say decrease our wage bill to around £45m, and reduce amortisation to around £60m, that gives us £21m of squad cost left to player with.
A £20m player, on £50k a week uses up £6.6m of squad cost. So 3 players of that value to use up that £21m. That's sustainable for us and where a club like us should be fishing.
United's turnover is £648m. 70% of that would give them a budget of £453m for player costs - 360% of our budget.
But they are fishing (or should be fishing) in different pools. Large transfer fees, with large wages. For them, their current wages are around £245m, and their amortisation costs are around £125m, so £370m of their £453m budget is already used.
That gives them £83m to use.
An £80m player, on £200k per week uses up £24.4m of their squad cost. So 3 of them is what's sustainable.
In theory, 3 £80m players on £200k per week should bring more output than 3 £20m players on £50k per week. But Jadon Sancho, Antony and Harry Maguire vs Pedro Neto, Hwang Hee-Chan and Max Kilman suggests that's not always the case.
Get you recruitment right at the lower level, at the same time a larger club gets their recruitment wrong and you can still compete.
What the squad cost rules stop is a club like Man United just increasing the size of their squad to compensate for poor player performance. They can't just buy their way out of trouble, without first shifting the poor performing players. They are currently holding onto a legacy of poor choices. We are too to a degree, with highly paid loan players holding us back a bit in terms of spending power.
After that 70% squad cost, what's left over means United will be a lot more profitable, with £195m left over to spend outside of player costs on things like general costs of running the club, ground development, or shareholder dividends. There's probably not a lot left over for clubs of our size after all these things, but we probably won't be losing money.
So there's a huge incentive off the pitch to improve a club's infrastructure too, as increasing turnover outside of TV money will increase a club's spending power.
It takes us from a model of nearly every club making a loss and pouring every penny of resource into the playing side, to a model where most clubs at least break even, and considered long-term planning on infrastructure will be rewarded. Get it right off the field, develop stadiums or build new ones, recruit the right players, at the right price, and you will move forward and progress.
For a club like us, it stops us treading water until a bad season where we are relegated.
If that happened to us in the next 3 or 4 season, our income is slashed, our best players are sold and the ground is no better and maybe 10 years older than when we were promoted, so have we actually moved forward as a club since 2018?
I'm not saying we have done anything wrong by concentrating on the playing side, every club has to at the moment. We've seen in the past where money has been diverted away from the playing side, we have struggled to keep up. At the moment, the only way to survive is to pur everything into the playing side. But that's not sustainable and it doesn't help any clubs develop off the field.