ALL issues relating to the bond issue and club finances

[ciderman9000000]

Well that's the point isn't it!?!? As Alan Sugar said earlier this week, football is not like a normal business. I think the Liverpool situation has shown that no club is too big to go under if things go wrong with servicing debts.

There's nothing to suggest that anything will go wrong servicing the debt though, we service the debt quite comfortably.

Loads of things can go wrong for a company, debt management is just one of them; at United there is debt, but there exist no problems in managing it and nothing to suggest that any problems will arise.

Do you not get into a car just because some cars crash?

I know you'll say that there was no need for us to be placed in a position of debt, which is true, but we are in that position now and it's being managed very well. Stop worrying about something that in all likelihood is just not going to happen; United can service its debt with ease.

 

[GCHQ]

If I remember correctly, you were on here the other day, warning of the dangers of relying too much on Prize Money.

Now you are expressing concern about the over-reliance on Commercial Revenues.

We all know that the very first thing the Glazers did at the earliest opportunity was to increase ticket prices (therefore Matchday Revenues) and we all know how much you disagree with that.

What revenues does that leave us with? TV revenues, as far as I can think of.

But out of all the revenues, TV revenues are the one thing that are completely beyond our control and must surely therefore be the very worst revenues to rely on?

I've said it before and I'll say it again, Anders. You sure know your onions when it comes to financial analysis but thank god you don't run the business!

The stand out line from the results was the c.50% growth in revenue from commercial partners (excluding Kit and Shirt sponsorship deals). That's excluding the AIG and Nike deals which were fixed amounts agreed years in advance.

So based on the commercial revenue streams which were physically possible to improve, they achieved growth of 50% year on year. And people wonder why I post all the news about the latest commercial partners to come on board!

 

[e.cantona]

This bond issue, it's up in five years time? What would have to go wrong for United not to be able rid themselves of it or refinanceing it or...

 

[Dr. Dwayne]

Bloody hell, Dr Dwayne. Correct me if I am wrong but I have hardly ever seen you in these threads before today but you talk more sense on the issue than just about anyone else on here.

Where have you been all these months?

I didn't want to engage in speculation, the presence of published accoutns makes it easier to discuss.

But really I just popped in to infract people as I thought this thread would be madness today, turns out everyone is playing nice so I just joined in.

 

[ciderman9000000]

I didn't want to engage in speculation, the presence of published accoutns makes it easier to discuss.

But really I just popped in to infract people as I thought this thread would be madness today, turns out everyone is playing nice so I just joined in.

We've all agreed to ignore Crerand, that's why no-one's lost the plot thus far; we can talk without the stress of constantly having to bang our heads against a brick wall.

edit.
it's good to know that special measures have been taken to police the thread today though; it does feel a bit like derby day! Crerand got left on the bench, anders scored an own goal in injury time and GCHQ popped up to net the winner with seconds to go.

 

[TheMancRedDevil]

The stand out line from the results was the c.50% growth in revenue from commercial partners (excluding Kit and Shirt sponsorship deals). That's excluding the AIG and Nike deals which were fixed amounts agreed years in advance.

So based on the commercial revenue streams which were physically possible to improve, they achieved growth of 50% year on year. And people wonder why I post all the news about the latest commercial partners to come on board!

I agree absolutely GCHQ and I think this is an area that the fans need to take more heed of.

I don't know off hand how much the Commercial Revenues have increased in cash terms under the Glazers because I don't know how they stood pre-2005 but the way I see it is if they can cover the £45million interest payment then the net effect of the debts would be nil going forwards.

Of course, we then have people who insist that "these would have happened anyway" or "anyone could have done what the Glazers have done" but I think these people completely miss the point.

Yes, anyone COULD have done it but clearly the PLC didn't and the Glazers DID and this was part of their plan all along which is why jumping on the anti-Glazer bandwagon before they had even sat behind their desks back in 2005 was incredibly premature.

I suppose it still won't change everyone's opinion of them and there are still things that remain to be seen (squad investment going forwards, for example) but I hope that today's financial reports will lead to a fairer reporting of the Glazers in the press in the future which, in turn, might lead to a rethink amongst some of the fans and the nonsense such as we have had to endure over the last ten months will finally be put to bed.

Why, I even feel moved to sweep the dust off my old slogan...

Love United, Be United.

 

[TheMancRedDevil]

I didn't want to engage in speculation, the presence of published accoutns makes it easier to discuss.

But really I just popped in to infract people as I thought this thread would be madness today, turns out everyone is playing nice so I just joined in.

To be honest, it is the days when there's nothing to discuss that it all turns into a slag-fest. Sorry to disappoint. Try again next week!

 

[ciderman9000000]

To be honest, it is the days when there's nothing to discuss that it all turns into a slag-fest. Sorry to disappoint. Try again next week!

that's true

 

[GCHQ]

David Gill interview

Manchester United chief executive David Gill insists there is no pressure to sell star players such as Wayne Rooney despite the club making losses of £83.6million.

Gill said the club would still prefer to have "Cristiano Ronaldo on the pitch than £80million in the bank" as proof of their desire to keep players.

Although United's group operating profit topped £100.7million, after player-related costs, interest payments and a number of expensive one-off costs related to the bond issue, overall there was a record loss for the club.

Gill said the accounts released today were "very good" with excellent revenues, and said there should be no concern about United going down the same road as Liverpool, whose American co-owners have struggled to finance their ownership.

The United chief executive did admit the figures could be confusing to fans who saw a record turnover of £286million for the year ending June 2010 contrasting with the record losses of £83.6million.

For the previous year the club had returned a net profit of £48.2million thanks to the sale of Ronaldo, but Gill said the Glazer family who own United had not pushed for that move, nor would they for any other player. He added that United's balance sheet includes £165million remaining in the bank if Sir Alex Ferguson wants to buy new players.

In an interview with Press Association Sport, Gill said: "We are not a club that needs to sell. We have money in the bank so there is zero pressure on that, no pressure at all to sell any star player whether it is Wayne Rooney or X,Y or Z. I can categorically say that.

"There was no desire at all from anyone at the club to sell Cristiano - he wanted to go and as a result we managed to extract a world record fee.

"These philosophy is to retain and attract the best players. We have £165million in the bank but in some ways we would prefer to have £80million in the bank and Ronaldo on the pitch."

Gill said part of the losses related to one-off payments after bank loans were turned into a bond, totalling £47million. He added that if 'goodwill' losses - an accounting practice relating to the original takeover - of £35.2million, and foreign exchange losses of £19million (which should be recovered next year) and depreciation are ignored, United would have an actual profit of about £25million.

Gill added: "There are very good results for the club with records here, there and everywhere but they are complicated with non-cash items and exceptional one-off hits."

Fans' group have raised concerns that there could be parallels with the Liverpool crisis, where the holding company may be forced into administration next week over unpaid debts following a leveraged takeover, and the Glazer ownership of United.

Gill however insisted that was not the case.

He added: "I can't speak for any other club but the United fans should not be concerned, we have a long-term financing structure in place, excellent revenues that are growing, we are controlling our costs - total wages are 46% of turnover - and we can afford the interest on our long-term finance.

"In our opinion if something changed in the ownership this club will survive and continue - it is covering the financing cost more than adequately.

"We still have cash to invest in players and to give good contracts to players and we are comfortable with the business model."

The figures show that United's wage bill rose by 7% to £131.7million, while United's overall debt rose to £521.7million.

It may also appease some critics that according to the figures, the Glazers have not taken any money out of the club to pay any of their £200million-worth of PIK notes that are now attracting interest at 16.25%.

Gill added: "They have retained that money in the bank and it's there for Sir Alex if he needs it for players, and for investing in the training ground and the stadium."

United are confident that they will meet UEFA's financial fair play rules despite the figures because not all the paper losses - such as depreciation - are included by UEFA when they calculate whether clubs are only spending what they earn.

Manchester United under no pressure to sell players despite losses, insists David Gill - News - MirrorFootball.co.uk

 

[datura]

The triumphalism in here is getting a little nauseating.

In reality, nothing has changed. The reasons people had for their opposition to the ownership are still relevant.

Just because payments have yet to go out to pay off the PIKs doesn't mean they won't in the near future.

And we are all united behind the team, that has never been in question (despite the best attempts of some to try and spin it that way).

 

[ciderman9000000]

And we are all united behind the team, that has never been in question (despite the best attempts of some to try and spin it that way).

Yeah, fredthered predominantly.

 

[TheMancRedDevil]

This bond issue, it's up in five years time? What would have to go wrong for United not to be able rid themselves of it or refinanceing it or...

I don't mean to sound flippant but you might as well ask "when will the football bubble burst?"

We really don't know. Some people will undoubtedly try to scaremonger that a spell out of the CL (more than a couple of seasons, perhaps) might be the thing that causes us a problem and some might say that something that reduces Sky's ability to pay so much for TV rights might cause a problem.

What won't change is the fact that our stadium still holds 76,000 people which is more than any other in the country by a distance and that we have a world-wide fanbase with an internationally recognised name that, in itself, is worth millions.

It is clearly not beyond the realms of possibility that there might be a situation that causes a problem when it comes to refinancing in 2017 but you have to identify what that situation is and ask yourself, "Is that likely to happen?"

Financial reports such as those seen today would suggest that Manchester United remain a powerhouse not just in English football but World football and this can only make the likelihood of it continuing greater than the likelihood of a sudden collapse in the next few years.

I don't think we need to start looking for high things to jump off just yet.

 

[GCHQ]

To be honest, it is the days when there's nothing to discuss that it all turns into a slag-fest. Sorry to disappoint. Try again next week!

 

[Dr. Dwayne]

The triumphalism in here is getting a little nauseating.

I think a few of us, myself and cider I know, have clearly said the debt isn't desirable but it is what it is, there's no changing that. I've not seen any "in your face" type comments, maybe I missed them?

In reality, nothing has changed. The reasons people had for their opposition to the ownership are still relevant.

Yes, but the doom mongering that many engaged in is pretty much outed as wholly unfounded, that is a change. By all means be against the methods with which the Glazers bought the club. It's very risky.

Just because payments have yet to go out to pay off the PIKs doesn't mean they won't in the near future.

I don't know about anyone else but I fully expect that to happen, they own the club, it's a source of revenue and they're ultimately responsible for paying the PIKs, they're not alchemists so the funds have to come from somewhere. Do I like it? No, but to make their position untenable would be detrimental to the club so I have trouble with anything action that would force them out.

And we are all united behind the team, that has never been in question (despite the best attempts of some to try and spin it that way).

Amen to that!

 

[Crumpsall Red]

That's right. They took nothing.

After the G&G campaign they wouldn't dare take anything, the press would have a field day. There are more people scrutinising these results as a direct result of that campaign.

Time to step the campaign up to it's next level I say.

 

[Canuckred64]

You can explain the figures to show that the debt is serviceable all you want, but what pisses off United fans is that through the leveraged buyout the Glazers are getting the club for nothing and doing it on the backs of the supporters. The figures also show that if it wasn't for paying the interest on the debt or other costs associated with the Glazers the club would be in great shape and would have likely already have brought in replacements for United players nearing the end of their careers.

 

[datura]

I think a few of us, myself and cider I know, have clearly said the debt isn't desirable but it is what it is, there's no changing that. I've not seen any "in your face" type comments, maybe I missed them?

I'm not going to specifically pick out posts but it's there.

Yes, but the doom mongering that many engaged in is pretty much outed as whilly unfounded, that is a change. By all means be against the means with which the Glazers bought the club. It's very risky.

I haven't really engaged with that side, the nature of football makes forecasting incredibly difficult.

I don't know about anyone else but I fully expect that to happen, they own the club, it's a source of revenue and they're ultimately responsible for paying the PIKs, they're not alchemists so the funds have to come from somewhere. Do I like it? No, but to make their position untenable would be detrimental to the club so I have trouble with anything action that would force them out.

The issue would be that with the debt repayments of the club and then the dividend if taken then c£65m will be taken out of the club to pay for debt pa (and the additional £70m available).

I'm not entirely sure that the figure is correct, but it was mentioned that the dividends under the Plc were c£15m pa.

I don't think anyone could have too many complaints if they took out a similar amount, but when you add on the bond interest as well the dissension would be understandable, especially given the ticket price increases etc.

They could really do with engaging more with the fanbase though to try and improve relations. I find it rather odd that they have continued to be so distant.

Amen to that!

Always.

 

[TheMancRedDevil]

The triumphalism in here is getting a little nauseating.

I am sure that the likes of GCHQ, ciderman, Rood and a few others will understand what I mean when I try to explain how hard it has been over the last 8-9 months or so to speak out against the crowd. To have your own support of Manchester United called into question. To be accused of being on the Glazer-payroll. To be called all the names under the sun. To be laughed at and ridiculed when you try to put your point across.

Today a lot of people feel vindicated and a lot of people have to seriously re-evaluate their own positions and their predictions of what lies ahead for us under Glazer-ownership.

We haven't had many days in the sun over the last ten months datura. Don't take this one away from us.

 

[ciderman9000000]

You can explain the figures to show that the debt is serviceable all you want, but what pisses off United fans is that through the leveraged buyout the Glazers are getting the club for nothing and doing it on the backs of the supporters. The figures also show that if it wasn't for paying the interest on the debt or other costs associated with the Glazers the club would be in great shape and would have likely already have brought in replacements for United players nearing the end of their careers.

The supporters were given the chance pre-Glazer to buy up the shares and thus stop any takeover from happening. They neglected to in their droves. It's too late now to be moaning about the takeover, far too late; we've only got ourselves to blame i'm afraid.

 

[Dr. Dwayne]

You can explain the figures to show that the debt is serviceable all you want, but what pisses off United fans is that through the leveraged buyout the Glazers are getting the club for nothing and doing it on the backs of the supporters. The figures also show that if it wasn't for paying the interest on the debt or other costs associated with the Glazers the club would be in great shape and would have likely already have brought in replacements for United players nearing the end of their careers.

Yeah, they clearly bought the club as investors so I think that leveraged buyout or not, they'd be looking to recoup their input. Even if they'd spent their own money they'd still be viewed as cnuts because they would be looking to get their money back, in the same manner they're paying for things now.

I think the club is in great shape, just burdened with debt...it's fairly common these days for any large operation and, indeed, individuals and families, it is far from desirable of course but if you can afford to do it.

Due to past experiences, I don't see the club replacing Giggs and Scholes with anyone until they are retired. But young players with a lot of potential have been brought in at a much lower risk than say a Veron type marquee signing. It's more in tune with the supposed United ethos but folks will still use it as a stick to beat the Glazer regime with regardless.

 

[fishfingers15]

1) We are all happy that no money has been taken to pay the PIK's, as of yet.
2) Debts are manageable till 2017, or till the bond issue comes to the forefront, yayyyyyyy
3) Our working profit (EBITDA) has increased by 8% in spite of a poorer season (compared to the previous season
4) There's more money in the bank than last season
5) One time charges and no-cash related expenses skewed the numbers. Yayyyyyyy

I'm sure almost all of us agree that these are temporary relief points and things can go seriously wrong, on at least point 1 and 2.

We continue to live in hope. Still, Love United, Hate Glazers.

 

[Canuckred64]

The supporters were given the chance pre-Glazer to buy up the shares and thus stop any takeover from happening. They neglected to in their droves. It's too late now to be moaning about the takeover, far too late; we've only got ourselves to blame i'm afraid.

I agree that it is too late to be moaning about the takeover, the Glazers and the debt are here to stay.

Not really sure that fan ownership was ever feasible, it's an awful lot of money and a lot of organizing to come up with in the short time Malcolm Glazer's take over took.

 

[Dr. Dwayne]

They could really do with engaging more with the fanbase though to try and improve relations. I find it rather odd that they have continued to be so distant.

For sure, maybe that will change now that these numbers have been released but I doubt it, we can all guess at the kind of vitriol they'd be up against.

 

[Tribec]

I just read that article from the BBC, and what stood out for me was the following,

Despite all those caveats, it remains the case that none of these charges would exist if it wasn't for the fact that United was bought by the Glazers with debt, some of it on extremely punitive terms.

Since the Glazers took over, they and the club have incurred more than £450m in interest charges and debt-related payments. To be clear, that doesn't include the actual sums borrowed, which stand today at £741m - including £220m of PIKs and the £521m club debts.

But it does include all fees to lawyers and bankers, penalties related to refinancing, loans to the Glazers, the PIKs interest and annual interest charges. To put that into context, those debt payments are £150m more than the price agreed by John Henry to buy arch-rivals Liverpool

The other issues that play a big part was mention of the failure to break the collective bargining agreement between the clubs with regards tv deals. That was always something they wanted, as they knew they'd make a killing on that and probably wipe what ever debts we've got quite quickly with those rights. Now what bothers me is the case at the European courts right now, with the landlady from Portsmouth fighting for the right to buy satalite tv from around Europe to circumnavigate the high charges that Sky inflict on pubs. If she wins that could see a very large drop in the next tv deal, which will have a knock on effect for United.

Whilst I can't see us reaching the situation Liverpool are in, we are in danger though in that if the dominoes topple we are likely to be one of the first to fall.

 

[Crumpsall Red]

The triumphalism in here is getting a little nauseating.

There are no winners, only losers ........... football mostly

 

[Dr. Dwayne]

I just read that article from the BBC, and what stood out for me was the following,



The other issues that play a big part was mention of the failure to break the collective bargining agreement between the clubs with regards tv deals. That was always something they wanted, as they knew they'd make a killing on that and probably wipe what ever debts we've got quite quickly with those rights. Now what bothers me is the case at the European courts right now, with the landlady from Portsmouth fighting for the right to buy satalite tv from around Europe to circumnavigate the high charges that Sky inflict on pubs. If she wins that could see a very large drop in the next tv deal, which will have a knock on effect for United.

Whilst I can't see us reaching the situation Liverpool are in, we are in danger though in that if the dominoes topple we are likely to be one of the first to fall.

That's a very legitimate concern and an interesting case to follow. Has anyone started a thread about it in the football forum?

 

[TheMancRedDevil]

I agree that it is too late to be moaning about the takeover, the Glazers and the debt are here to stay.

Not really sure that fan ownership was ever feasible, it's an awful lot of money and a lot of organizing to come up with in the short time Malcolm Glazer's take over took.

We could have bought the club for £20million back in 1990, I think.

Even immediately post floatation I think it was only worth £40million.

Even Glazer started buying the shares two years before he finally took over, it didn't happen overnight.

We had plenty of time but we did nothing about it until it was far too late.

 

[TheMancRedDevil]

That's a very legitimate concern and an interesting case to follow. Has anyone started a thread about it in the football forum?

Someone started a thread about the landlady taking it to court, if that's what you mean.

Think it's a non-starter, myself.

 

[Crumpsall Red]

I notice David Gill says today on the beeb website that he can categorically state that there is no pressure to sell players.

Didn't he categorically state that debt was the road to ruin?

Truck on David

 

[Devil_forever]

The stand out line from the results was the c.50% growth in revenue from commercial partners (excluding Kit and Shirt sponsorship deals). That's excluding the AIG and Nike deals which were fixed amounts agreed years in advance.

So based on the commercial revenue streams which were physically possible to improve, they achieved growth of 50% year on year. And people wonder why I post all the news about the latest commercial partners to come on board!

Those sponsorship deals will hit saturation point soon though won't they? How many of our recent new deals will be shown in next year's accounts?

Also does anyone know when we'll get to see the benefit of the increased overseas deal from the premier league?

 

[Canuckred64]

We could have bought the club for £20million back in 1990, I think.

Even immediately post floatation I think it was only worth £40million.

Even Glazer started buying the shares two years before he finally took over, it didn't happen overnight.

We had plenty of time but we did nothing about it until it was far too late.

You right if you go back to 1990. But not many people were overly concerned about ownership back then, perhaps we should have been. But you know what they say about about hindsight. It was only when Glazer made his move to take control of the club in 2005 that it became a concern to most people and by then it was already too late.

 

[TheMancRedDevil]

I notice David Gill says today on the beeb website that he can categorically state that there is no pressure to sell players.

Didn't he categorically state that debt was the road to ruin?

Truck on David

Would you like that every word you ever posted on here was held up to such scrutiny? have you never said anything which, with the benefit of hindsight, you thought, "I should have kept my mouth shut there?"

Give him a break, man. It's ancient history now. Maybe the Glazers have taught him a trick or two about how to run a business.

 

[TheMancRedDevil]

You right if you go back to 1990. But not many people were overly concerned about ownership back then, perhaps we should have been. But you know what they say about about hindsight. It was only when Glazer made his move to take control of the club in 2005 that it became a concern to most people and by then it was already too late.

I think there are three types of people in life. Those who make things happen, those who watch what happens and those who wonder what the feck just happened.

 

[Dr. Dwayne]

Also does anyone know when we'll get to see the benefit of the increased overseas deal from the premier league?

I don't know but it's hitting my wallet at a pretty good rate now. I'm going to have to add another channel come the end of this month when the free preview ends.

 

[Canuckred64]

I don't know but it's hitting my wallet at a pretty good rate now. I'm going to have to add another channel come the end of this month when the free preview ends.

Why bother, I don't believe there will be any more United games on it this year.

 

[GCHQ]

Those sponsorship deals will hit saturation point soon though won't they? How many of our recent new deals will be shown in next year's accounts?

Also does anyone know when we'll get to see the benefit of the increased overseas deal from the premier league?

No. Nothing points towards the sponsorship/commercial revenue hitting saturation. The opportunities for growth are virtually limitless in this era of globalisation given our remarkable levels of support in the emerging and developing countries around the world.

In the six month period between mid-February and mid-August there was a net increase of seven commercial partners/sponsors. It's also possible that ''DHL'' have recently signed up as a commercial partner. There will be another big increase in commercial revenue in the current financial year. No doubt about that.

We'll benefit from the increased overseas media rights deal starting from this season although the increase isn't thought to be quite as significant as previously expected. £6m-£7m growth per year (for each PL club) I believe rather than the £10m that was widely reported six months or so ago.

 

[ciderman9000000]

Where were the RedKnights in 2004 then? Remember, that mysterious group of lifelong United fans who're not only collectively far wealthier than the Glazer family but are also devoted to altruistic business practises and free season tickets for everyone; where the feck were they when they could have actually made a difference?

The club was ripe for a takeover, nobody went for it; who can blame the Glazers for taking what nobody else, including the fans, had the forethought to take for themselves.

They've subsequently run the club quite well, far better than we were told they would. We were told that they were monsters, it turns out they're just men. Football club owners; nothing special, nothing evil, just businessmen running a profitable and successful business.

LUHG my arse.

 

[Rood]

so what did I miss?

 

[Transfer United Till I Die]

so what did I miss?

Crerand thinks we are ruined, the papers think we are going bust, everyone wants to know why the £70m is still there and the mail thinks bebe is a homeless, shite, immigrant cnut.

 

[ciderman9000000]

and anders says we're the most well managed club in England.