MANCHESTER, England — The wall of fame of Manchester United managers still informs Old Trafford visitors that a "new chapter has begun" under David Moyes. In reality, it was a short, painful chapter in United history that will cost around $90 million, the club disclosed on Wednesday.
Although the museum display hasn't been updated, it's been more than four months since Moyes was fired before completing a season as Alex Ferguson's successor. The task of restoring the former glories is with Louis van Gaal, and the club told investors on Wednesday that the former Netherlands manager needs to deliver a top-three finish in the English Premier League.
United executive vice chairman Ed Woodward is certain Van Gaal, who won titles with Ajax, Barcelona and Bayern Munich, has begun to reinvigorate the club.
"The 2013-14 season was a very challenging and disappointing one," Woodward said. "But under Louis there is a real feeling at the training ground that we are at the start of something special. We are very excited about the future."
After 26 years under Ferguson, there have been two new chapters in a year. Still searching for his first win after four matches in charge, this manager has to get it right. In its annual financial results, United said it cost 5.2 million pounds ($8.4 million) in compensation to fire Moyes and some of his coaching staff after just 10 months in charge.
United, which is owned by the Glazer family and listed on the New York Stock Exchange, remains a commercial juggernaut, with 2013-14 revenue up 19 percent to a club record 433.2 million pounds ($699 million). But the failure to qualify for Europe under Moyes by finishing seventh has led United to forecast revenue in 2014-15 to drop by 10 percent — around $80 million — to as low as 385 million pounds ($619 million).
"Our budgets assume a third-placed finish," Woodward said.
Underlying profit is also forecast to drop from 130.1 million pounds ($210 million) to between 90 to 95 million pounds ($145 to $153 million), although the debt which angered fans after the 2005 Glazers' takeover has fallen to 341.8 million pounds ($551 million).
But the 20-time English champions have been spending heavily in a bid to arrest the decline, reinvesting the sponsorship revenue, which soared by 50 percent to 135.8 million pounds ($219 million) in the year to June 30. The accounts show 78.9 million pounds ($127 million) spent on players, including the signing of Juan Mata in January for 37.1 million pounds (then $61 million). The wage bill rose by almost 20 percent to 214.8 million pounds ($345 million).
Since the end of the financial year, United has spent more than $200 million, including a British record fee of 59.7 million pounds ($99 million) to sign Argentina midfielder Angel Di Maria from Real Madrid in an attempt to improve United's position.
Despite the investment in foreign talent and sale of academy graduates — including striker Danny Welbeck to Arsenal — assistant manager Ryan Giggs said the club remains committed to youth development. At least one homegrown player has featured in every United matchday squad since 1937 — a statistic that covered Giggs before he retired from playing this year.
"The club will never change. The history of the club is to play exciting football, always give youngsters a chance," Giggs said at the SoccerEx conference in Manchester. "Danny has left, which is obviously disappointing because you never want to see a homegrown player leave ... but we have got to make sure young players come through because United fans demand it."
But there will soon be further sponsorship cash to spend on transfers. Next year's accounts will reflect the start of the seven-year $559 million shirt sponsorship with Chevrolet, but an Adidas kit deal, worth potentially 75 million pounds ($121 million) a year, doesn't start until 2015-16.
"Commercially, we continue to go from strength to strength," Woodward said.
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