Ronaldo’s sale means a £10m kitty for Sir Alex – so sign Antonio Valencia or hold on to Carlos Tevez?

On April 9^th I posted my prediction that Man U would be forced to sell Ronaldo because of their spiralling debt burden. Standing at £649.5m, and with crippling interest rates, offloading their top asset was a simple solution. And so it turned out – for a staggering £80m – thanks to the deep pockets of Florentino Perez, the charismatic president of Real Madrid.

One of the key questions following the announcement of the move was whether or not any of the proceeds of Ronaldo’s sale would be handed to Alex Ferguson to find a suitable replacement. I would imagine the first time Sir Alex asked, possibly back in April when the rumours started, the answer would be a straight forward no. However, since then a big economic factor has come into play which could make the club, Ferguson and the fans all potential winners.

Since April the Dollar-Pound exchange rate has shifted by approximately 13% from an April low of $1.44 to a June high today of $1.65 for a pound. The impact of this on Manchester United is significant, as the debt they need to service is in dollars. In fact, working on the premise of an £80m fee, the amount the Man U accountants would have expected back in April would have been $115m but the total they’ll actually receive is $132m. What I would expect is that the difference of $17m – or roughly £10m – is the amount the management will give to Sir Alex to bolster his squad.

So what could £10m buy? Well, Antonio Valencia of Wigan for one (even if the Latics are asking more). Or, perhaps more intriguingly, the money could be spent holding on to Carlos Tevez who’s eye watering  £130,000 per week wages might still save the Red Devils money in the long run.

Selling Ronaldo is the obvious solution for Man Utd

It’s the day Man United fans hoped they’d never see, the day they’ve been turned into a selling club.

With the publication today of Red Football Joint Venture’s (the parent company of Man United) finances, the businesses spiralling debts have been exposed. Reaching an eye watering £649.4m, an increase in the last year of £45m, the problem for Man U is that their debt continues to compound.

Even the Bank of England’s decision today to keep interest rates at 0.5% isn’t going to help the club. Approximately one quarter of their debt was borrowed from hedge funds when the Glazers bought the club in 2005 at a staggering 14.25% – and in the current economic climate the club will struggle to renegotiate these rates.

There is a positive story though, as the group recorded it’s highest ever turnover at £256.2m – an English club record. But this was the result of an exceptional season winning both the Premier League and the Champions League – a feat that looks all the more difficult after Porto’s last gasp equaliser on Tuesday night.

The club continues to focus on its revenue streams to offset their exceptional interest payments and rumours abound that the Prudential are being lined up as shirt sponsor replacing the troubled US insurance giant AIG. But even if the Prud do sign up for the £50m+ that AIG paid, the club is still going to need to find more revenue and that will come from selling some of their prized assets.

I predict that regardless of Alex Ferguson’s desire to keep Christiano Ronaldo the player will be sold to Real Madrid this summer. The £75m reportedly on offer will go some way to covering the interest payments. But don’t be surprised if the firesale doesn’t stop there. Carlos Tevez is another obvious candidate where significant million pound savings can be found. And they’ll be others too – Federico Mancheda anyone?!