Manchester United are down to their last £65m after wiping £86.7m off their cash holdings this summer. The money was spent on bringing in David de Gea, Ashley Young and Phil Jones to the club during the transfer window while also reducing bond debts.
The quarterly accounts for United's parent company to September this year show a strong performance in their commercial turnover. This has been driven by the pro rata returns on their ground-breaking £10m-a-year training-kit sponsorship deal with DHL.
However, the cash expenses most catch the eye. The departures of Gabriel Obertan, John O'Shea and Wes Brown could not offset the outlay in player trading by much, and the total net spend over the last transfer window was £47.1m. An additional £8m went on buying up areas of land around Old Trafford and about £5m more on refurbishing the stadium, with improvements to some executive boxes.
The other significant cash movement was the repurchase of a little under £26m in bonds. This is a sensible move, considering that cash earns next to nothing in interest whereas United are paying out 8.75% and 8.375% on their two bond coupons. Even accounting for this one‑off bond buyback, which helped to reduce the gross debt by £83.5m, United paid about £10m in interest over the three months. That is hardly crippling to United, but it does affect the UK taxpayer.
As David Gill, the club's chief executive, told the parliamentary select committee inquiry into football governance in March: "It is true to say that interest expense for any UK corporate is a tax-deductible item and [United's owners, the Glazers] have used that."
The financial analyst Andy Green points out on his Andersred blog that despite paying £3.2m in tax over the most recently published quarter, United have saved about £100m in payments that might otherwise have been due to the exchequer since the Glazers' 2005 takeover of the club. Green has reached this figure by adding all the tax charges that would otherwise have been due from Red Football Group companies' operations were there not to have been deductible interest payments: £102.072m.
Green adds that until the July-September accounts came out on Tuesday, United's tax paid under the Glazers had been less than £300,000. A spokesman for the club refused to comment, but Gill did tell the select committee: "We still have significant amounts of tax. Our tax payments to the exchequer last year totalled about £75m; over the last five years it has been £370m."
