The Dutchman could be relieved of his duties as the Red Devils continue to flounder on the pitch but the club must consider the financial implications of such a decision.The end may well be nigh for Louis van Gaal, with Saturday’s atrocious 1-0 home loss to Southampton having left the Manchester United manager perilously close to the end of his spell at Old Trafford.
Van Gaal’s side have recorded only two league victories in two months, while the standard of their attacking play has angered supporters so much that the defeat at the weekend was met with the kind of derision not seen at the Theatre of Dreams in decades.
“Of course I’m disappointed, but I have to think already how can we change this,” said Van Gaal after the the club’s latest Premier League defeat.
“It is not an easy job at the moment, because although we have won three games and drawn one in 2016 before this one, we could not show that confidence in this game.”
The weight of popular opinion now suggests that confidence in the Dutchman is waning rapidly as a result of United’s ineptitude on the pitch, but the possible off-field impact of Van Gaal being shown the door could be costly enough that executive vice-chairman Ed Woodward and the club will be left thinking twice about their next step.
Even if there was a strong collective conviction within the boardroom that Van Gaal should be released from his current torture, which is far from the case at the moment, the figures involved would force even the most steadfast businessman to think twice.
As reports circulate that Woodward has turned down an offer from Van Gaal to resign, question marks still remain as to the true cost of cutting ties with the Dutchman. Regardless of whether he is sacked or he walks away, substantial associative costs will have to be considered as United look towards their next step.
Van Gaal’s contract alone carries a hefty pay-off value, with the 64-year-old due to collect another £10 million over the course of the remaining 17 months of his £7m-a-year deal. As is the case with most football contracts, an early termination by the club would not release them from the financial commitment and it therefore remains a consideration in the decision-making process. Add in the severance packages which would be due to Van Gaal’s five-man army of Dutch backroom staff, and a dismissal starts to become a hugely costly exercise.
Furthermore, United’s current struggle to qualify for next season’s Champions League will have a big say on the balance sheet. Not only could the club expect a return of over £30m from Uefa were they to reach the prestigious competition for 2016-17, but their recent commercial deal with Adidas included significant stipulations relating to European involvement.
The kit supply contract, with its much-reported £75m maximum annual return, includes an agreed £23m cut in finance should United miss out on the Champions League. Such a substantial drop in revenue, along with the loss of the Uefa solidarity payments, leaves United having a lot of second-guessing to do when considering Van Gaal’s future.
And that is without even taking into account the hit of losing matchday revenue from the famed Old Trafford European nights. The club would save money on bonus payments within the Dutchman’s contract if they were to finish outside of the top four, but the scale of the failure would far outweigh the minimal financial boost.
If the club see a parting of the ways as a chance to rescue their season, boosting hopes of making the top four in the process, then the financial incentives are clear. A £10m loss on Van Gaal’s contract would pale into insignificance if his successor presided over a rally which then secured the £50m-plus Champions League windfall.
Yet some clubs often make a managerial change in the knowledge that they are writing off the remainder of the season, and if United were to consider such a move to give Van Gaal’s replacement a period of acclimatisation before the 2016-17 campaign begins then they may have to bear in mind the potential financial losses of upsetting the apple cart at this point.
Theoretically, United can afford to lose out on the £50m or more they stand to gain from reaching the Champions League given their status as the world’s third-greatest revenue-creating football club, but such a cut would shave more than 10 per cent off their yearly gains at a time when there is still a substantial debt to be paid off. Suddenly the cost of firing Van Gaal and his staff and even hiring someone as costly as Jose Mourinho, who earned £12m a season at Chelsea, might be seen as an expensive gamble worth taking.
Goal.com
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