I'm in discussion with someone on the your blog atm anders who has either just told me something I never knew or he's talking out of his arse. It's hard to tell at your gaff. There are people on there who make ME look sensible.
ALL issues relating to the bond issue and club finances
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I don't agree with you on this one. Different opinions
Without going in to specific details I'm think 8x EBITDA (give and take) is more close to the true. (See post 4900)
I think it's not that easy to valuate United, I don't find the comparison with Arsenal very valuable. Different clubs in different city's.
We have to wait for the real answer but I think it 's going to be a suprise for all of us, when that (holy
) moment arrive.Is it related to the PIK documents?
He aint going to tell you unless he is sure of what he says, killing you aint it?
Animal, vegetable or mineral you ask?
Animal (native of Florida).
Hope that helps.
Seriously, stop guessing.
Animal, vegetable or mineral you ask?
Animal (native of Florida).
Hope that helps.
Seriously, stop guessing.
Some of us are content to wait until you are happy with info
I'll stick this in here:-
thoughts anyone?
thoughts anyone?
Animal, vegetable or mineral you ask?
Animal (native of Florida).
Hope that helps.
Seriously, stop guessing.
Well I hope for your sake that there's something to it because at the moment your credibility rating is going through the floor.
A rabbit is required pronto Anders.
He's correct as it's inconceivable that the PIK covenants would allow for significant cash leakage from RFJV Ltd until the PIKs had been repaid in full.
That's how we put Fred's latest conspiracy theory to bed a long time ago.
Red Football Joint Venture is United's parent company, not 'part of' Manchester United, is it not?
I don't agree with you on this one. Different opinions
Without going in to specific details I'm think 8x EBITDA (give and take) is more close to the true. (See post 4900)
I think it's not that easy to valuate United, I don't find the comparison with Arsenal very valuable. Different clubs in different city's.
We have to wait for the real answer but I think it 's going to be a suprise for all of us, when that (holy
It really doesn't make a great deal of difference that Arsenal's in London and we're based in Manchester. It helps on the matchday revenue side of things but the really serious future growth is going to come from media and commercial revenue streams. And on that front there isn't another club in the world with greater potential for growth than Manchester United. Which in my humble opinion makes your 8x EBITDA conclusion look very silly.
That's true. Have to admit I was purely focussing on his comments about the dividends to RFJV.
Right. That makes sense but it does mean that I have been talking bollocks when I said that they could use their dividends for anything they wanted. Not necessarily to pay off their PIKs. As no one ever pulled me on that, I assumed it must be correct. Apparently not.
The last part he says doesn't make a great deal of sense to me because I am a 25% shareholder of a Ltd company and I never put a penny into it but I get a monthly dividend.
The 12.5X EBITDA does concern me. The average for a football club is around 8. Can it be totally justified? And is it me or has Joel Glazer had a hair transplant?
No doubt people will speculate that he has been taking hairs from Rooney's head and putting them in his own and this has led to Rooney's samson-like loss of form.
where's this average of 8x come from? That's what was offered for Liverpool but is it actually an average of most top flight clubs sold recently?
also my question still stands, there was a method that the Glazers could take 25mill a year from the club (be it for themselves or to the parent company) I think the generally held assumption was that it was going to be used to pay down the PIKS. They didn't take it on the last accounts, does that mean they've missed out on it or could they now transfer 50mill across this year?
also my question still stands, there was a method that the Glazers could take 25mill a year from the club (be it for themselves or to the parent company) I think the generally held assumption was that it was going to be used to pay down the PIKS. They didn't take it on the last accounts, does that mean they've missed out on it or could they now transfer 50mill across this year?
Where do you get that from?
All recent major European football transactions point to a 12.5x EBITDA valuation being perfectly justified.
I hope people aren't basing the 8.5X EBITDA valuations on the back of the proposed sale of Liverpool for £300m...
I don't see what difference the valuation makes really. As with the value of a player, the value of a successful bid for a club by potential buyers will be dictated by the value placed on it by the current owners in relation to their desire to sell. That said, Forbes valued United back in April at £1.2bn, approx. 12X EBITDA, which in itself would suggest an 8X valuation to be way under the mark. What difference does it make though? The Glazers have expressed that they have no intention of selling and even turned down a bid at 15X EBITDA, let alone sell for 8X.
The brand is connected with our results. The result business is not easy and that will reflect the valuation.
To think that United is worth 4 to 5 times more then Liverpool is a bold suggestion. I think the new UEFA rules will adjust the turnovers and in the long run also the value of United (and other clubs)
Is this something you have read or just something you believe will happen?
I can't see how they could do that and I would love to see what formula they would use for calculation, if they did.
If it was a multiple of EBITDA then that would surely only be a good thing for us.
EDIT: I still don't think that UEFA's calculated value would represent a promise by the club to sell at that price though!
It's my own thought's.
Doesn't sound feasible to me and it doesn't seem to be what the FFP Regs are all about anyway.
The rules are not about how much a club is worth but whether or not they are operating within their means.
How much of the brand power calculation is results specific though? Out of all sports clubs globally, only the New York Yankies beat Manchester United in terms of brand power; Real Madrid, The Dallas Cowboys and Barcelona complete the top five. I'm not sure how much short-term on-field results will effect that list, but certainly poor performances long-term would have a negative impact; all the more reason for the Glazers to protect the brand via squad investment though, right?
Must admit. This only really became apparent to me today when I was trying to work it out.
That goodwill amortisation thing (£35million-ish?) is just something there from the takeover and runs for 15 years (I think) but £35mill is a fair chunk to have to explain away every season.
Animal, vegetable or mineral you ask?
Animal (native of Florida).
Hope that helps.
Seriously, stop guessing.
Come on CL, do you know what this is about, or are you just kissing the donkey?
At least, is it good or bad news?
Sorry I know nothing but I do respect the fact that Anders keeps quiet until he is sure.
This is what CL knows...
Nice to see a bit of humour this thread had become a bit heavy tbh, good work TMRD
Where would this thread be without your own unwitting nuggets of side-splitting humour?
Sorry for my lack of knowledge but can anybody explain to me the point of the 600m bond. Will we be in a similar position to Liverpool when the debt is due and what strategies the Glazers have to rid us of the debt. Also, Ciderman was saying a couple of pages back that none of the money from the club is going to debt, but isn't our income being spent on the interest charges?
Just found this BBC article from back in May that seems to quite accurately predict the Glazers not taking anything out of United to pay off the PIK's. The reporter, David Bond, suggests that they're not particularly worried about the PIK notes and that sources close to the Glazers indicate that they're more inclined towards spending money on squad development whilst tapping lucrative commercial income streams than on extracting cash to pay off debt.
David Bond : BBC : 25th May 2010 said:
The £500m bond issue was designed to raise the cash needed to pay-off the previously existing senior bank debt.
There is no reason to believe that we'll ever be placed in a position similar to that of Liverpool because, unlike Liverpool, we have no problem meeting our repayment obligations and there is no reason to believe that any problems on that front shall ever arise.
When the debt is due to mature in 2017 further re-financing will be necessary. Again, no problems are expected in this respect, it's a common procedure.
The Glazers appear to have no strategy with which to rid us of debt. Instead they seem to be increasing revenue with the intention of achieving such profits as to render our debt repayments as largely insignificant.
Lastly, i never said that none of our money was going towards servicing debt, only that none of our money has gone towards servicing the PIK's; approx. £45m per annum will leave the club until the bonds mature in 2017.
Sorry mate I misunderstood as my knowledge of all this stuff is limited. So I guess its not all doom and gloom as everybody makes it then?
From what I understand is that we made a loss this year because of a big one off payment for the bond. Does that mean in the years ahead, the only money that will be coming out of the club is that 45 million pound per annum, and we will be making profit yearly because of our large revenue?
Dunno, it would certainly be better off without your lickspittle up-Glazer lovin' shite.
Where would this thread be without your own unwitting nuggets of side-splitting humour?
In a nutshell, the Glazers have taken out all kinds of loans over the years but have now refinanced so that there are basically two loans left.
The one that is connected to Manchester United is the Bond Issue. It is worth nearer £500m than £600m.
This loan does indeed require £45million from United's money to service each year.
It expires in 2017 at which point it is expected that they will issue another bond.
One side of the argument is annoyed that we are paying all this money in interest on the Bond, the other side is not so concerned because the increased income the Glazers have brought to the club more than covers it.
The other side is pissed off because part of this increased income is ticket price increases.
Some others obviously dont really care about this because they don't buy tickets anyway.
Anyway, there are these other loans called the PIKs. These are really nasty loans attracting an interest rate that would make your bank manager blush - 16.25%.
These are not directly Manchester United's loans but they are the Glazers personal loans incurred when they purchased United (sort of).
We are assured that these loans will be dealt with by the Glazers but a lot of people don't believe this and believe that the Glazers will use whatever money they take out of United to pay for them.
It would seem that if they don't pay these loans off by 2017 then they will lose control of the club and so they have to pay them off... somehow.
As things stand, the Glazers are entitled to take £25million/year out of the club and another £70million one-off carve out payment.
They could have taken this but so far, they haven't taken a penny which has confused a lot of people because most people thought it was a dead cert that they would take it and pay off some of those PIKs.
Because these loans are personal loans, nobody really knows much about them.
However, to cloud the issue a bit, it turns out that the Glazers themselves actually bought out at least 20% of the PIKs themselves a couple of years ago (yes, this does appear that they owe themselves money).
It is all a bit confusing and a lot of people are trying to second-guess what the Glazers are going to do.
Confused? You will be.
In a nutshell:-
£500million Bond Issue debt - this has to be serviced by United at £45million/year.
£220million PIK debts - these are for the Glazers to sort out one way or another.
And there you go again peter. Account hacked again is it? I am assured that you are not a piece of shit but someone who is a piece of shit is hacking your account it seems.
Yeah, in a nutshell, that's about the long and short of it.
With £164m sat in our bank account we've got no issues when it comes to funding transfers, and despite reporting a financial loss for the previous twelve months a large portion of our documented expenses were either non-cash deductions that didn't actually cost us a penny or one-off actual payments which will not be repeated on next year's accounts.
This year's Profit and Loss statement was on a whole very positive, and barring natural disaster next year's should really show the money coming in.
The debt's a concern, but it's being well managed. We're doing ok.
Thanks mate I understand a lot more now.
By reading that it would seem to me that the 500million bond issue debt is somewhat under control considering the amount of money we make per annum. So to maintain this bond issue, we pay 45 million per annum which leads me to the second question. Is that 45 million per annum paid on interest of the bond, or to reduce it yearly?
If the Glazers are entitled to 25 million per year, and a massive 70 million one off payment then I'm guess they will use that 70 million at one stage or another. What kind of effect would that have on our 500million bond issue?
So I'm guessing that the rumor that the 80m from Ronaldo transfers were used for the debt are incorrect and we have the money to invest in the squad if needed. The only way to get rid of the debt would be if a new owner came in and was willing to pay it off?
It is purely interest. There are no capital repayments. As already said by cider, it is expected that another bond will be issued in 2017.
None.
Well. This is a thorny issue at the moment. We have bought the likes of Valencia, Smalling, Bebe and Hernandez but have nowhere near spent £80million.
But, with the likes of Giggs, Scholes and VDS needing to be replaced possibly at the end of this season, it is expected that a fair amount of money will be needed.
The money is there to replace these people but it does seem that we will not be able to buy these players AND let the Glazers have their £70m as well. The money simply isn't there.
However, the Glazers have set up a £75m credit facility for transfers so the money is there but this is obviously a further debt which no one would be particularly happy to see used.
Forget about them making any inroads into the £500m. It isn't going to happen. £500m is going to stay there for the foreseeable future. They are clearly hoping that inflation will erode the debt and possibly at some distant point in the future, it can be cleared.
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