The Effect of Player Valuation as Intangible Assets as Per IFRS/IAS 38 and Return on Investment (ROI) of Player Transfers on Financial Liquidity: A Case Study of Manchester United PLC

Figure Ilustration AI

FORMOSA NEWS - Surabaya - Manchester United Study Finds Player Spending Fails to Fix Liquidity Crisis. A 2026 study by Indrian Arsya Nandito and Mulyanto Nugroho from 17 August 1945 University of Surabaya reveals that Manchester United PLC’s aggressive player spending and transfer profits have not improved the club’s financial liquidity. Published in the Journal of Finance and Business Digital (JFBD), the research analyzes financial data from 2015 to 2024 and concludes that structural financial issues not player trading strategies are driving the club’s liquidity challenges.

Background: Big Revenues, Fragile Cash Flow
Modern football has become a multi-billion-dollar industry fueled by broadcasting rights, sponsorships, and global fan engagement. Manchester United reported revenues of €771 million in 2024, placing it among the world’s highest-earning clubs. Yet, despite this financial strength, the club faces a paradox: high asset values but weak short-term financial health. The study highlights a sharp decline in the club’s current ratio a key liquidity indicator to just 0.36 in 2024, far below the healthy benchmark of 1.5–2.0. This mismatch reflects a broader issue in elite football: clubs may appear financially strong on paper while struggling to meet short-term obligations.

Methodology: A Decade of Financial Data
The researchers used a quantitative longitudinal case study approach, examining Manchester United’s audited financial statements submitted to the U.S. Securities and Exchange Commission (SEC) over a 10-year period (2015–2024).
Key variables analyzed include:

• Player valuation as intangible assets under IFRS/IAS 38 accounting standards.
• Return on Investment (ROI) from player transfers.
• Financial liquidity, measured using the current ratio.

The data was processed using multiple linear regression analysis with SPSS software, following standard statistical tests for reliability and validity.

Key Findings: No Significant Impact on Liquidity

The study delivers a clear and unexpected conclusion: neither player valuation nor transfer ROI significantly improves liquidity.

Main findings include:

• Player valuation has no statistically significant effect on liquidity (p = 0.334)
• Transfer ROI also shows no significant impact (p = 0.578).
• Combined, both variables fail to influence liquidity (p = 0.251).
• The model explains only 13.4% of liquidity variation, indicating other factors dominate

Despite an average player valuation of £753 million, the club’s average current ratio remained at just 0.675 well below safe levels.

Real-World Implications

The study has important implications for football clubs, regulators, and investors:

For football management:

• Clubs should prioritize debt restructuring over transfer activity.
• Wage control is critical to improving financial stability.
• Liquidity management must become a core strategic focus.

For regulators:

• Financial oversight should extend beyond profitability metrics.
• Liquidity ratios should be monitored alongside Financial Fair Play rules.

For the industry:

• The research challenges the belief that expensive players guarantee financial strength.
• It highlights the risks of over-reliance on intangible assets in financial reporting.

Author Profiles
Indrian Arsya Nandito Bachelor’s degree in Accounting, 17 August 1945 University of Surabaya
Field of expertise: Financial accounting, sports finance, and intangible asset valuation
Mulyanto Nugroho Lecturer and researcher, 17 August 1945 University of Surabaya
Field of expertise: Financial management, corporate finance, and accounting systems

Sources
Nandito, Indrian Arsya & Nugroho, Mulyanto. 2026. “The Effect of Player Valuation as Intangible Assets as Per IFRS/IAS 38 and Return on Investment (ROI) of Player Transfers on Financial Liquidity: A Case Study of Manchester United PLC.” Journal of Finance and Business Digital (JFBD), Vol. 5 No. 1, 165–176.
DOI: https://doi.org/10.55927/jfbd.v5i1.18
URL: https://journaljfbd.my.id/index.php/jfbd